FY2022 3Q Results

February 7, 2023

1

FY2022 3Q Earnings (1)(in billions of yen)

FY213QFY223QRevenue

123.1

149.0

Core operating profit

17.9

24.1

Operating profit

18.2

24.5

Profit before taxes

18.5

25.1

Profit attributable toowners of Kureha Corp.

13.3

17.7

Basic profit per share (¥)¥682.48¥904.69[Foreign currency exchange rates]¥/USD:¥/EUR:¥/CNY:¥111.1¥130.6¥17.3¥136.5¥140.6¥19.9

ChangeYOY

25.9(+21.0%)6.2(+35.0%)

6.3

Vs. FY2021 3Q• Revenue grew on sales expansion inAdvanced Materials, particularly PVDF used asa binder material for lithium-ion batteries, andin Specialty Chemicals and Specialty Plastics• Core operating profit increased due primarily tothe expansion of Advanced Materials(+34.7%)

6.6(+35.5%)

4.3(+32.6%)

Note: Our FY2022 full-year earnings forecast
remains unchanged as previously announced
on November 9, 2022

2

FY2022 3Q Earnings (2)(in billions of yen)

Performance by Segment (vs. 3Q/FY21)
RevenueCore operating profit

66.1

3Q/FY2145.0

3Q/FY2211.5

3Q/FY218.536.535.3

25.4
20.6
8.5

13.714.1

6.9

Other
Advanced
機能製品 Specialty
化学製品 Specialty
樹脂製品 Construction
建設関連 その他関連
Operations
Materials Chemicals Plastics

3Q/FY227.5

4.2
2.5 2.6

2.2 2.2

0.5 0.4
Advanced
機能製品 Specialty
化学製品
Materials Chemicals

OtherSpecialty
樹脂製品 Construction
建設関連 その他関連
Operations
Plastics

Factors attributing to core operating profit
AM: Sales expansion across all product groups (advanced plastics, carbon products, other plastic products),
higher profit primarily driven by PVDF in advanced plastics
SC: Higher raw material and energy costs offset by expansion of agrochemicals and industrial chemicals
and higher prices
SP: Slower home products sales and higher raw material and energy costs more than offsetting improved
packaging materials performance
CO: Fewer public and private construction projects
OO: Higher industrial waste treatment volumes

3

FY2022 Full-Year Financial Forecast*As announced on November 9, 2022
(in billions of yen)

FY21
Results

Changes
FY22vs.
Forecast
FY21

FY22
Initialforecast

Changesvs.
Initialforecast
10.0(+5.6%)

Revenue

168.3

190.0

21.7(+12.9%)

180.0Core operating
profit25.3

27.01.7(+6.7%)

23.0

4.0(+17.4%)

Operating profit

20.1

27.0

6.9(+34.0%)

22.0

5.0(+22.7%)

Profit before taxes

20.4

28.0

7.6(+37.3%)

22.0

6.0(+27.3%)

Profit attributable toowners of Kureha

14.2

20.0

5.8(+41.2%)

16.0

4.0(+25.0%)¥725.73¥1024.72

Basic profit per
share (¥)

¥819.79

Vs. FY2021• Revenue growth led by Advanced
Materials, Specialty Chemicals
and Specialty Plastics, despite
declines in Construction and Otheroperations• Core operating profit to increase in
Advanced Materials and Specialty
Chemicals; decrease in Specialty
Plastics, Construction and Other
operations
Vs. Initial forecast• Higher revenue and profit led
primarily by PVDF, Agrochemicals
and Specialty Plastics[Currency exchange rates and sensitivity]
FY21
ActualFY22
Initial estimate

1Q-2Q FY22
Actual

3Q-4Q FY22
New estimate

Forex sensitivity*Impact of an one-yen depreciation
on operating profit per 6 months

1USD=¥112.4¥120.0¥134.0¥135.0An increase of ¥20 million

1EUR=¥130.5¥132.0¥138.8¥135.0An increase of ¥20 million

1CNY=

¥17.5

¥18.5

¥19.9

¥19.5

An increase of ¥70 million

4FY2022 Full-Year Financial Forecast*As announced on November 9, 2022
(in billions of yen)

Revenue & Operating Profit by Segment (vs. FY21)(billion yen)

Revenue
87.5

15.0Core operating profit

FY21 Results
FY22 Forecast

FY21 Results
FY22 Forecast

10.0

66.7

9.9

7.5

44.8 45.0
26.2 29.0

18.5 18.0
12.2 10.5

Other
Advanced
機能製品 Specialty
化学製品 Specialty
樹脂製品 Construction
建設関連 その他関連
Operations
Materials Chemicals Plastics

1.4 1.5

3.1 2.5

1.0 0.5

Other
Advanced
機能製品 Specialty
化学製品 Specialty
樹脂製品 Construction
建設関連 その他関連OperationsMaterials Chemicals
Plastics

Factors affecting core operating profit
AM: Robust performances of PVDF (LiB binder) and carbon fiber furnace insulation materials
SC: Strong agrochemicals sales, pricing actions for industrial chemicals
SP: Slower home products sales partially offset by expansion of packaging materials
CO: Fewer high-margin construction projects, intensifying market competition
OO: Lower industrial waste treatment volumes, including low-level PCB wastes

5

Segment Performance:
Advanced Materials(billions of yen)

FY213QFY223Q

Vs. FY2021 3Q
Change%Advanced Materials
Advanced plastics

30.9

50.6+64%

Carbon products

4.4

5.2+17%

Other

9.7

10.3+6%

Revenue

45.0

66.1+47%

Operating profit

4.2

11.5+175%

Revenue ➚Operating profit ➚Advanced plastics: Revenue up, profit up- Increased sales of PVDF (LiB binder), PPSand PGA- Higher profit largely contributed by PVDF
Carbon products: Revenue up, profit up- Increased carbon fiber sales in the high-heat
furnace insulation market, including for siliconingot manufacturing

6Segment Performance:
Specialty Chemicals(billions of yen)

FY213QFY223Q

Vs. FY2021 3Q
Change%Specialty Chemicals
Agrochemicals

6.3

8.8+40%

Pharmaceuticals

3.4

3.0-11%

Industrial chemicals

5.5

7.2+31%

Other

5.4

6.3+16%

Revenue

20.6

25.4+23%

Operating profit

2.2

2.2+0%

Revenue ➚Operating profit →Agrochemicals: Revenue up, profit flat
- Higher sales volume offset by higher fuel andraw material costs
Pharmaceuticals: Revenue down, profit down
- Lower Kremezin sales (a therapeutic agent forchronic kidney failures
Industrial chemicals: Revenue up, profit up- Recovered from operating loss with improved
organic and inorganic chemicals sales

7Segment Performance:
Specialty Plastics(billions of yen)

FY213QFY223Q

Vs. FY2021 3Q
Change%Specialty Plastics
Home products

18.8

17.9-5%

Fishing lines

3.5

3.5-0%

Packaging materials

9.8

11.8+20%

Other

3.1

3.2+5%

Revenue

35.3

36.5+3%Operating profit

8.5

7.5-12%

Revenue ➚Operating profit ➘Home products/Fishing lines: Revenue down,
profit down
- Slower NEW Krewrap sales (home-usefood wrap film)- Higher fuel and raw material costsPackaging materials: Revenue up, profit up- Sales expansion for heat-shrink multilayer filmand PVDC film

8Segment Performance:
Construction(billions of yen)

Vs. FY2021 3Q

FY213Q
Construction
Construction

FY223Q

Change%

13.4

13.7

+2%

-4.9-6.8--Revenue

8.5

6.9-18%Operating profit

0.5

0.4-20%Elimination(Intercompany sale)

Revenue ➘Operating profit ➘- Fewer construction projects in both public
and private sectors

9Segment Performance:
Other Operations(billions of yen)

Vs. FY2021 3Q

FY213QFY223Q

Change%9.910.2+3%

6.2
3.1
1.7

6.1
3.2
1.8

-1%
+5%

-7.2

-7.1

--Revenue

13.7

14.1+3%Operating profit

2.5

2.6+3%

Other Operations
EnvironmentalengineeringLogistics
Hospital operations
OthersElimination(Intercompany sale)

Other Operations

Revenue ➚+1%

Operating profit ➚- Environmental engineering revenue and profit
increased on higher industrial waste treatment
volumes, including PCB-contaminated wastes- Logistics revenue and profit down
- Hospital Operations revenue up, operating loss
narrowed

10Financial Position(billions of yen)

AssetsLiabilities and Equity
Mar. 312022

Dec. 31
Change2022

Mar. 312022

Dec. 31
Change2022

Cash and cash equivalents

30.6

25.6

-5.0

Trade and other payables

29.5

27.8

-1.7

Trade and other receivables

35.8

37.7

1.9

Interest-bearing debt

28.5

25.6

-2.9

Inventories

41.7

50.5

8.8

Provisions

8.2

6.4

-1.8

Other current assets

4.3

5.4

1.1

Other liabilities

15.7

17.3

1.6

Total current assets

112.4

119.2

6.8

Total liabilities

81.9

77.1

-4.9

Property, plant and equipment

114.4

117.7

3.2

Shareholders’ equity

18.2

18.2

-

Intangible assets

4.0

4.6

0.6

Capital surplus

14.7

14.7

-

Investments and other assets

51.7

49.9

-1.8

Less: Treasury stock

-8.7

-8.7

0.0

Retained earnings

166.0

178.1

12.1

Other components of equity

9.0

10.5

1.5

Non-controlling interests

1.5

1.6

0.0

Total non-current assets

170.2

172.2

2.0

Total equity

200.7

214.3

13.6

Total assets

282.6

291.4

8.7

Total liabilities and equity

282.6

291.4

8.7

11PGA & PVDF Business Updates*PVDF and PGA revenue forecasts remain unchanged (as announced on November 9, 2022)
50050¥ billion

Revenue: PVDF

¥ billion

Revenue: PGA
50
5.02502500

25
2.50.00
2016

2017

2018

LiB binder
電池向け

2019

2020

Other applications
素材向け

2021

2022

estimate
予想

Market conditions• EV sales are growing faster than a year ago but will likely
decelerate briefly due to rising inflation, EU and China economic
slowdowns, EV subsidy cuts, etc.
• Lithium Iron Phosphate (LFP) batteries are increasingly used forChinese EVs, while in the US and Europe, long-range LiBs such asNickel Manganese Cobalt (NMC) batteries are the mainstream• Large South Korean LiB makers are building more plants in the US
through JVs and collaboration with auto makers
PVDF capacity enhancement• Delayed local inspection for our new PVDF plant in China due tothe pandemic and changes in government policies• Will consider the construction of an additional manufacturing facility
in Iwaki, Japan, while making efforts to increase capacity at thecurrent plant via debottlenecking and improved productivity• Will optimize the allocation of specialty PVDF polymers and steadily
supply to key customers as needed2016

2017

2018

2019

2020

2021

2022
estimate
予想

Market conditions• In 2022, shale drilling activities returned to 90% of prepandemic levels• PGA frac plugs have gained nearly a 20% share in thehigh/mid-temperature shale market
Profit-generating strategies• Is now building a business framework to generate solid profit
only in the high/mid-temp shale market, where Kureha isincreasing its share by actively promoting PGA plugs for fullbore application• Will continue to optimize inventory, reduce production cost, andstreamline R&D activities
Product improvements• Will prioritize the development of short-sized and improved
PGA plugs for both high/mid- and extreme low-temp
applications (field tests underway)12Disclaimer•

This presentation material is provided for a deeper understanding of ourcompany, and is not intended to be used as a solicitation for investment orother activities.

•This material has been prepared by our company based on the information
available at the time of the presentation. Actual results many differ
materially due to various factors.

•Please utilize this material using you own judgment and responsibility.