Supplemental Information
Financial Results
For FY 2023 4Q
2023/2/9

SHIKOKU KASEI HOLDINGS CORPORATION（Tokyo Stock Exchange Prime Market 4099）

11. Consolidated Financial Results

2

Financial highlights

Increased sales but decreased profits year on year (January – December)Million yen

Previous year※
CY2022January to
December
Net sales

61,475

FY2023

63,117

Change／Rate+1,642+2.7％

Remarks

・Chemicals operations increased due to the recovery in thesecond half and the depreciation in the yen
・Housing Materials operations decreased due to deteriorating
market conditions in the housing area

Operating profit

8,703

8,019

▲684
▲7.9％

Ordinary profit

9,840

9,280

▲560

・Profit decreased due to higher raw material costs, labor, anddepreciation cost・Foreign exchange gains 549 (YoY ▲34)▲5.7％
Profit attributable toowners of parent

Exchange rate

7,081
1USD = 130 JPY
１EUR = 135 JPY
１RMB = 19.4JPY

7,853
1USD = 140 JPY
１EUR = 148JPY
１RMB = 19.8JPY+772

・Gain on sale of investment securities 2,071 (YoY +1,203)+10.9％

・Impairment losses ▲41 (YoY +795)

Net sales+18
billion yen
OperatingProfit+7
billion yen

・Foreign exchange impact on PL included in change from theprevious year (total of Chemicals and Housing Materials)
Only the impact of exchange rate fluctuations on foreign currency transactions isshowed. Many yen-denominated transactions are also substantially affected bychanges in foreign exchange rates, but they are not included.

* Since the Company has changed the fiscal year-end from March 31 to December 31 in the previous year, for comparison with theprevious year, the twelve-month period from January to December 2022 is compared with the “same period previous year,” as a reference.

3

Trends in Net sales and Operating profit (ＹＴＤ)
Net sales increased in both Chemicals (+14.6) and Housing Materials (+1.7), resulting in a companywide increase in sales (+16.4 in total)
Operating profit decreased companywide (-6.8 in total) due to lower profit margins and lower profits in both Chemicals (-4.8) and Housing
Materials (-1.7)
YoY
+16.4

Net sales

614.8

631.2

+2.7%

20.0

160.0

510.0

520.5

528.0
494.3

185.4

187.1

197.7

207.2

16.4
15.2

Housing
Materials

YoY+1.7

192.2

18.0

17.1
140.0Ratio %521.0

100 Million yen

Operating profit

181.8

14.8

12.7
100.0

192.5

87.2

86.7
79.1
27.2

60.0

418.8
305.7

77.0

293.0

31.3

433.3 Chemicals
YoY+14.6

333.7

20.0

0.0
1-12

1-12

1-12

1-12

1-12

1-12

2017

2018

2019

2020

2021

2022

FY2023

71.7

22.2

87.0
16.8

▲7.9%

80.2
15.1

44.8

40.9

Housing
8.0
Materials

6.0

63.0
51.2

10.0

YoY▲1.7

29.6

40.0

58.3

1-12

14.0

YoY
12.0
▲6.8

28.0

315.3

14.2

120.0

80.0

310.8

16.0

14.5

68.7

Chemicals

63.8

4.0

YoY▲4.8

2.0

1-12

1-12

1-12

1-12

1-12

1-12

1-12

2017

2018

2019

2020

2021

2022

FY2023* Results for the previous years were recalculated for the same period of the current year (January to December).

* From FY2023, accompanying changes to the management framework, corporate expenses, which were previously not allocated toeach segment, are now allocated to each segment based on reasonable criteria. In addition, results for the previous years are also
compared by using the revised measurement method.

0.0

4

YoY Changes in Operating profit
The decline in profitability due to higher cost (raw materials and depreciation costs) and lower unit sales
price was partially offset by positive impact of increased sales, weaker yen, and normalization of export
logistics costs.
Million yen

Increase in gross

Increase in profit
accompanying increasein net sales(Chemicals operations)

・Increase in depreciation cost of new Neo-Chlor
plant
Increase in cost of production of approximately▲490 million (decrease in profit)
・Increase in raw material prices (purchasebasis)
Increase in cost of production of approximately

profit margin
Increase in profit
accompanying increase (Housing Materials
Increase inoperations)in net sales
logistics costs(Housing Materials(Housing
operations)

Decrease ingross profit
margin(Chemicals Decrease inoperations) logistics costs(Chemicals
operations)

Materials
operations)(▲684)

・Price revision carriedout since January(approximately 10%)・Impact of FX fluctuations
Decrease in profit of approximately▲200 million yen(related to purchase of aluminum
raw materials)▲810 million (decrease in profit)

2022/1-12
Operating profit

Increase in
R&D expenses(companywide)・Impact of FX fluctuations: Increase in profit of approximately 900 million yen→ Net positive effect of increase in sales in foreign currency and negative effectof increase in purchase and transportation costs in foreign currency

Increase in other
SG&A expenses(companywide)・Cost of company split
・Support for Marugame Half Marathon
・Increase in provision for bonuses
accompanying change in fiscal year end

FY2023Operating profit

5Trends in Net sales and Operating profit (ＱＴＤ)
・Total sales increased by 1.06 billion yen YoY. Chemicals operations achieved significant growth of 1.18 billion due
a reactive increase from sluggish performance in the previous year and bottoming out of the market conditions.
Housing Materials operations decreased slightly by 130 million yen due to volume declines affected by deteriorating
market condition, offset by price revisions.
・Sales increased by 420 million yen QoQ. Chemicals operations decreased by 40 million yen due to a seasonal
decline in organic products.
Housing Materials operations increased by 450 million yen due to a seasonal rise in demand for housing, despite
lower level of cargo movement.
QoQ
+4.2

100 Million yen

YoY
+10.6
+6.9%

158.0
149.1

155.0 152.7

161.9

159.1

163.3

128.7

41.7

124.0

Ratio %

42.2

43.5

47.9

11.6
11.2

53.5

26.0
23.6
20.3

10.4

113.3

78.7

14.7

13.7

41.2

90.9

16.4

13.8

25.1

83.9

16.7

16.9

Housing
Materials

YoY▲1.3
QoQ+4.5

49.2

45.7
40.8

16.3

15.0

42.6

51.9

18.5

146.9

139.6

135.7

54.0

Operating profit+2.6%

Net sales

・Total operating profit decreased by 200 million yen YoY. Chemicals operations slightly increased by 80 million yen
as positive factors such as increased sales and lower logistics costs were offset by a decline in unit sales price andhigher raw material costs. Housing Materials operations slightly decreased by 80 million yen due to increased cost.
・Operating profit decreased by 450 million yen QoQ. Chemicals operations decreased by 300 million yen due to adecrease in organic products sales and lower profit margins. Housing Materials operations recovered, up 90 million
yen, due to a rise in the ratio of landscape exteriors affected by a recovery of demand for properties (seasonalrise).

110.0

95.0

117.5
100.5

17.7

Chemicals

112.7

112.3

3.1

22.4

QoQ
▲4.5

YoY
▲2.0

▲19.3%

▲9.6%

23.4

20.9

4.7
7.0

4.1

17.8

3.5

7.8

18.9
4.4

5.3

1.5

2.9

YoY+11.8
QoQ▲0.4

24.1

8.5

13.8

Housing
Materials

YoY▲0.8
QoQ+0.9

90.8

80.2

22.6
18.9

18.5
14.4

14.4

4Q 1-3
FY2020

1Q 4-6

15.8

14.9

16.0

15.1

1Q 4-6

2Q 7-9 3Q 10-12 1Q 1-3
FY2022

15.4

13.6

Chemicals

15.9

YoY+0.8
QoQ▲3.0-0.6
4Q 1-3
FY2020

1Q 4-6

2Q 7-93Q 10-12 4Q 1-3

FY2021

1Q 4-6

2Q 7-9FY2022

3Q 10-12 1Q 1-3

2Q 4-6

3Q 7-9FY2023

4Q 10-12

2Q 7-9 3Q 10-12 4Q 1-3
FY2021

2Q 4-6
3Q 7-9FY2023

4Q 10-12

6

Operating results by segment: Chemicals (ＱＴＤ)
・Inorganic chemical products bottomed out and showed recovery signs, with increases of 690 million yen YoY and 470 million yen QoQ.
Orders for insoluble sulfur increased as the weaker yen restored price competitiveness in the Chinese market. Sales to North America
expanded.
・Organic chemical products (Neo-Chlor) were weak, with decreases of 170 million yen YoY and 1,110 million yen QoQ.
In the North American market, special demand due to our competitor’s supply ended and demand was fulfilled, resulting in prolonged
inventory adjustments and restrained purchasing.
・Fine chemicals showed a clear recovery trend, with increases of 650 million yen YoY and 600 million yen QoQ.
While the cargo movement of imidazoles (electronics) recovered, the market conditions of electronic chemicals (Glicoat-SMA) remained
unchanged.
In the new field, resin modifiers showed an upward trend due to the end of inventory adjustments and demand for semiconductor processmaterials are expanding for prototype production.
・The impact of foreign exchange was about +200 million yen (JPY/USD: 143→148) YoY and +200 million yen (JPY/USD: 144→148) QoQ.

QoQ
▲0.4

Net sales

・Operating profit increased by 80 million yen YoY. The weaker yen contributed to an increase in profit of about 100
million yen.
Sales of insoluble sulfur and fine chemicals increased, but unit sales price of export of insoluble sulfur and Neo-Chlor
lowered due to supply and demand conditions, resulting in worsening of profitability (rate of return).
The cost of various raw materials mainly in organic products continues to rise, and we are working on revising prices
for domestic products.
Depreciation expenses of the new Neo-Chlor plant increased slightly in 4Q (depreciation will gradually decline basedon the declining-balance method in the next year).
・Operating profit decreased by 300 million yen QoQ due to a drop in sales of organic chemicals (Neo-Chlor) affectedby both seasonal and market factors.

Operating profit
19.7

▲0.4%

YoY
+11.8

18.2

+11.7%

113.3

90.9
83.9
78.7

95.0

117.5
110.0

25.2

90.8

80.2

24.4

14.2

31.9

15.1
14.2

YoY+6.5
QoQ+6.0

21.1

23.0

29.2

41.1

54.7

43.5

36.6

22.6

28.3

29.5

36.1

34.8

29.9

33.1

34.7

１USD
143JPY

4Q 1-3
FY2020

1Q 4-6

2Q 7-9

18.9

18.5

33.7

3Q 10-12 4Q 1-3

FY2021

1Q 4-6

2Q 7-9FY2022

3Q 10-12 1Q 1-3▲16.1%

YoY▲1.7
QoQ▲11.1

27.7

29.5

11.5

Organic
chemicals

14.4

29.3

QoQ
▲3.0

+5.0%

Ratio %
61.4

45.2

16.8

112.3 Fine

YoY
+0.8

48.4

25.2

17.0

25.4

54.8

32.2

112.7

25.9

28.0
22.4

17.2

chemicals

26.9

100 Million yen

15.7

21.3

100.5

22.4

20.5

20.3

2Q 4-6

32.1

36.9

１USD
144JPY

１USD
148JPY

3Q 7-94Q 10-12

FY2023

14.4

15.8

14.9

16.0

15.1

15.4

15.9
13.6

Inorganic
chemicals

YoY+6.9
QoQ+4.7

１USD
143JPY

4Q 1-3
FY2020

1Q 4-6

2Q 7-9 3Q 10-12 4Q 1-3
FY2021

1Q 4-6

2Q 7-9 3Q 10-12 1Q 1-3
FY2022

１USD
144JPY

2Q 4-6
3Q 7-9FY2023

１USD
148JPY

4Q 10-12

7

Operating results by segment: Housing Materials (ＱＴＤ)
・Housing Materials operations as a whole decreased by 130 million yen or 2.6% YoY. Sales of interior, exterior finishedand paving materials, and housing exteriors were weak due to sluggish new housing starts (detached house).
・Sales of interior, exterior finished and paving materials remained weak, with a decrease of 30 million yen YoY and anincrease of 10 million yen QoQ.
・Sales of exterior products decreased by 90 million yen YoY as the effect of price revisions (10%) offset by a decreasein volume.
While the housing business was weak, the landscape business increased from the previous year due to recovery of
demand.
・Sales increased by 450 million yen QoQ, including a seasonable rise of a natural increase in demand for landscapeexteriors, which, as usual, bottoms out in the April-June period.

Operating profit

Net sales
YoY
▲1.3

QoQ
+4.5

▲2.6%

54.0

53.5

51.9

41.7

Ratio %

42.6

42.2

14.6

13.5
10.0

47.9

45.7
41.2

19.3

100 Million yen+10.3%

49.2

40.8

・Housing Materials operations as a whole decreased by 80 million yen YoY.
・Profitability of exterior products recovered after two price revisions, but it was not enough to offset the decline involume, mainly in landscape exteriors. Costs increased mainly due to an increase in personnel expenses, rise in sales
expenses in line with full-scale sales activities, and a decline of profitability in production sites due to weak sales.
・Raw material prices including aluminum ingot remained stable at high prices, resulting in limiting improvement of
profitability by price revisions.
・Operating profit increased by 90 million yen QoQ as the ratio of high profitable landscape exteriors grew due to aseasonal rise.

10.3

10.7

43.5

9.2

8.1

7.3
7.1
3.5
-1.5

50.4

48.2
42.2
37.3

45.6
38.3

38.0

50.3

39.5

YoY
▲0.8

Exterior
Products

39.1

40.3

44.7

YoY▲0.9
QoQ+4.3+26.2%

10.4
7.8

7.0

3.7

3.5

3.2

4Q 1-3

1Q 4-6

2Q 7-9FY2020QoQ+0.9▲16.0%

3.5

3.7

3Q 10-12 4Q 1-3

FY2021

3.4

3.1

1Q 4-6

2Q 7-9FY2022

3.6

3.2

3Q 10-12 1Q 1-3

3.1

3.1

3.3

2Q 4-6

3Q 7-94Q 10-12

FY2023

2.9

Interior, exterior
finishes

YoY▲0.3
QoQ+0.1

4.1

5.3

4.7
1.5

4Q 1-3
FY2020

1Q 4-6

2Q 7-9 3Q 10-12 4Q 1-3
FY2021

4.4

3.1
1Q 4-6-0.6
2Q 7-9 3Q 10-12 1Q 1-3
FY20223.5

2Q 4-6
3Q 7-9FY2023

4Q 10-128

2. Financial Forecast

for the Fiscal Year Ending 2024

9

Forecast of Consolidated Financial Results
100 Million yen

Million yen

Net sales

ChangeFY2023

ＦＹ2024／

Housing
Materials

RemarkRate

Net sales

Operating profit

Ordinary profit

64,000+883（Chemicals）43,332（Chemicals）43,500+1.4％（Housing Materials）（Housing Materials）

18,712

19,500

8,019

7,800

▲219

（Chemicals）6,381（Chemicals）6,300▲2.7％（Housing Materials）（Housing Materials）

1,508

1,300

9,280

8,200

63,117▲1,080▲11.6％

Profit attributable toowners of parent

Exchange rate

7,853

5,500

▲2,353▲30.0％

1USD = 140 JPY

1USD = 140 JPY

１EUR = 148 JPY
１RMB = 19.8 JPY

１EUR = 150 JPY
１RMB = 19.0 JPY

・Sales of Chemicals operations are expected toincrease due to sales expansion of insoluble
sulfur and recovery of the fine chemicals
market.
・Sales of Housing Materials operations are
expected to increase due to recovery of the
housing market.

Chemicals・Operating profit of Chemicals operations is
expected to be stable due to lower unit sales
price and an increase in fixed costs (repair
costs of plants).
・Operating profit of Housing Materials
operations is expected to decrease due to anincrease in fixed costs associated withvarious sales promotion initiatives.
・Ordinary profit is expected to decrease further
due to the non-recurrence of foreignexchange gain recorded in FY2023(Foreign exchange gain in FY2023: 549 million
yen)
・Profit is expected to decrease considerably
due to the non-recurrence of gain on sale ofinvestment securities recorded in FY2023(Gain on sale of investment securities
recorded in FY2023: 2,088 million yen)

Operating profit

Housing
Materials

Chemicals・One yen change against US dollar has apositive impact of approximately 180 million
yen in sales and 70 million yen in operating
profit.

10

Capital investment and Depreciation[Major capital investment in FY2023]

100 Million yen

・2,230 million yen for the construction of new plant for insoluble sulfur
・800 million yen for the construction to accommodate increased production of Neo-Chlor (scheduled tostart operation in the autumn of 2024)
・180 million yen to add a solar power generation facility to the Marugame plant[Major capital investment in FY2024]
・2,550 million yen for the construction of new plant for insoluble sulfur (scheduled to start construction in
the winter of 2024 and start full-scale operation in 2026)
・380 million yen for the construction to accommodate increased production of Neo-Chlor
・540 million yen for production and surface treatment facilities for Neo-Chlor tablet

11

Dividend and Share buyback Trends[Shareholder Return Policy]
・The Company aims to achieve “a dividend payout ratio of 30% and a
total payout ratio of 50% based on consolidated financial results” underthe “Challenge 1000” long-term vision for 2030.

Total return ratio

100 Million yen[FY2023 Shareholder Return Policy]

Total return

・Annual dividends were 28 yen per share (interim dividend of 14 yen andyear-end dividend of 14 yen)・Repurchased the Company shares of 3,220 million yen in total in Juneand November 2023 through TosTNet-3. Total shareholder returns
including dividends of 1,420 million yen are 4,640 million yen, with a
total payout ratio of 59.1%.

Share buyback[FY2024 Shareholder Return Policy (plan)]

Total dividends

・Plans to maintain dividends of 28 yen per share (interim dividend of 14
yen and year-end dividend of 14 yen).
・In addition, premised upon the shareholder return policy, the Company
will repurchase its shares in a flexible manner and promote thereduction of excess capital and cross-shareholdings to improve thevalue of shares.

123. Action to Implement Managementthat is Conscious of Cost of Capitaland Stock Price13

Analysis of current situation and policies for the present
Since the ROIC of the business is high enough at present, we can achieve an
ROE level that exceeds the cost of shareholders' equity by reducing excess
capital.
To accelerate in the current direction, we plan to consider and carry out various
capital policies.

[Future earnings to be acquired (FCF)](Shareholder return)
Carry out promptly, targeting 50%
of profit(Internal reserve)
Prioritize investments in growthand human capital as risk capital

Consolidated Balance Sheets (as of 12/31/2023)[Financial assets]
Cash and deposits
Securities (short-term bonds)
Investment securities (longterm bonds)
Investment securities (crossshareholdings)

¥69.8

bn
(+¥8.6 bn from the
beginning of the year)
Approx.

[Business assets]
Trade receivables
Inventories
Property, plant, andequipment/ Intangible
assets[Excess capital](Risk buffer retention policy)
Retain 1/3 of annual net sales(Allocable funds)
Consider shareholder returns, withthe amount excluding risk buffers as
the capital that can be reduced if
there is no urgent demand for funds.
In particular, the reduction of crossshareholdings is prioritized whileworkingoncreating
business
synergies with companies of crossshareholdings.

[Investment capital](Profit indicators to be compared)
Operating profit after tax bybusiness→ ROIC by business
Chemicals operations
Approx.¥30.1 bn (+¥1.5 bn
from the beginning of the year)
ROIC 15.2%
Housing Materials operations

Chemicals operations
Approx.¥43.1 bn

Approx.¥8.1 bn ( ▲ ¥1.4 bn
from the beginning of the year)
ROIC 12.0%

Housing Materials operations
Approx.¥14.4 bn[Business liabilities]¥61.1 bn

Approx.

¥39.2 bn

Approx.

Trade payable
Labor liabilities and provisions[Group capital invested](Profit indicators to be compared)
Profit after tax (operating profit +financial revenue)→ Group ROIC
(Target ROIC)
Set to WACC as a hurdle rate of
ROIC, and aim to achieve WACC
of 6% or less by reducing thecost of equity through leverage.
(Current status)
There is a gap between business
ROIC and Group ROIC, and thereturn on invested capital as awhole is declining due to excess
capital with low yields.
Aims to improve the return onGroup ROIC by reducing excess
capital to an appropriate amount.

¥109.0Approx.
bn(+¥7.1 bn from the beginningof the year)
ROIC5.8%[Net assets in carrying
amount](Profit indicators to be compared)
Profit → ROE(Assumed cost of shareholders’equity)6-8%(Target ROE)
Set to 8% as a hurdle rate in the
short term, and aim to exceed
10% in the future by capital
reduction
Approx.
bn¥86.1[Future net assets]
Maintain ROE and net asset
levels that exceed the cost ofcapital at all times throughbalance sheet management tosecure both aggressive growthstrategies and capitalefficiency.
In addition, consider capital
policies that enhance theattractiveness of share value
from perspectives other thanprofitability (increased liquidity
and preferential treatment) andincentive plans that makeemployees and management
more aware of share value.

(+¥4.8 bn from the
beginning of the year)

ROE9.4%[Interest-bearing debt](Basic policy on leverage)
・Actively utilize low-cost funds tothe extent that the credit rating canbe maintained・Set D/E ratio to the 30% level¥22.2

Approx.
bn(+¥2.0 bn from the beginningof the year)[FY2023 Financial and CF Summary]・Profit temporarily increased to ¥7.8 billion, with ROE at a high level of 9.4%, due tothe recording of gain on sale of cross-shareholding in an extraordinary income.
・Shareholder returns decreased by ¥4.6 billion in total of dividends and repurchaseof own shares.
→ As a result, shareholders' equity increased by ¥3.2 billion.
(Combined with comprehensive income, net assets increased by ¥4.8 billion.)・The Company raised approximately ¥2 billion in additional interest-bearing debt.
→ The total of group capital invested increased by ¥7.1 billion.
・This capital increased was invested in capital expenditures of ▲¥5.3 billion (*up¥3.3 billion in depreciation), and financial assets increased by ¥8.6 billion from theprevious year to ¥69.8 billion.
・Assets increased temporary mainly due to an increase in valuation of listed shares(approximately ¥4 billion) and an increase in income taxes payable (approximately¥2.5 billion) associated with a change in the fiscal year-end.
→ Accelerate discussions on reduction measures of assets and capital.

14

Disclaimer

 This material is intended to help shareholders, investors, etc., understand pertinent information such as the Company’s
management policy, plans, and financial status, and it does not solicit investment such as purchasing or selling stocks in the
Company.
 The information contained in this document has been presented with the utmost care, but there is no guarantee as to whether
the content is accurate or currently up to date. Additionally, the Company assumes no responsibility for any damage ordisability arising out of or in connection with this document, such as published information or errors, regardless of the reason.
 Among the Company’s current plans, forecasts, and strategies as presented in this material, those that are not historical facts
are forward-looking statements or projections based on the judgment of the Company’s management according to theinformation that was available at the time of the relevant decision; hence, risks and uncertainties are involved. Actual
performance and business results may differ greatly from these prospects due to various factors.
 If you understand the above and are interested in exploring investment opportunities, please peruse additional materials suchas the Company’s securities report and make your investment decision at your own discretion.

Contact information
SHIKOKU KASEI HOLDINGS CORPORATION, Corporate Planning Dept.
TEL: +81-(0)877-21-4119
https://www.shikoku.co.jp

15