Kuraray : Roadmap for the Vision（160KB）

Kuraray Report 2024	Kuraray Group Businesses "For People and the Planet" Toward Realizing the Vision Three Challenges Business and Growth Strategies Management Foundation	Corporate Data	22

Roadmap for the Vision

Kuraray Group has declared its mission: "For people and the planet-to achieve what no one else can." Based on this mission, we formulated the "Kuraray Vision 2026" long-term vision and the Sustainability Long-Term Vision. By pursuing the three challenges laid out in "PASSION 2026," our Medium-Term Management Plan, we are aiming to achieve sustainable growth and realize the vision.

Medium-Term Management Plan

Measures and Results of Past Management Plans

Our Mission

We are committed to developing new fields of business using pioneering technology that improves the environment and enhances the quality of life throughout the world.

"For people and the planet-to achieve what no one else can."

"Kuraray Vision 2026"	Sustainability
Long-Term Vision	Long-Term Vision
Specialty Chemical Company contributing	As a sustainability leader, Kuraray will
to customers, society, and the planet and	develop innovative solutions with unique
growing sustainably by	products and cleaner technologies to
incorporating new innovation platforms into	improve the natural environment and
its own technologies	enhance quality of life for people everywhere.

Previous Medium-Term Management Plan

"PROUD 2020" (2018-2020)

Pursue competitive superiority

-Acquired Calgon Carbon Corporation in the United States. Decided to expand production facilities for virgin activated carbon (United States) and reactivated carbon (Belgium)

-Decided to invest in a new plant in Thailand for the isoprene business

-Boosted production capacity for optical-use poval film (Japan), water-soluble PVOH film (United States), PVB film (South Korea), and SentryGlas™ ionoplast interlayers (Czech Republic)

Expand new business fields

-Expanded existing production capacity for VECSTAR™ liquid crystal polymer film (Japan)

-Decided to invest in resin production facilities for PLANTIC™ biomass-derived gas barrier material (United States)

Enhance comprehensive strength of the Kuraray Group

-Generated integration synergies with the Environmental Solutions business (carbon materials)

-Established Personnel Development Department for the purpose of reinforcing personnel development and handing down technical expertise

-Promotedwork-style reforms

Fiscal 2021 Management Plan*

Steadily implement capital investment decided in previous Medium-Term Management Plan "PROUD 2020"

Expand the Environmental Solutions business (carbon materials)

-Further integrated operations after organizational consolidation. Steadily captured expanding demand by drawing on our ability to address environmental regulations

Increase production capacity of EVAL™ EVOH resin

-While tracking demand trends and business feasibility, explored candidate sites mainly in the Asian region

Promote digitalization across the entire Group

-Established the Global Digital Transformation (GDX) Office

Initiatives to create innovation

-Established the Innovation Networking Center

• Given uncertainties over the future of the global economy and the business environment in 2020 due to the COVID-19 outbreak, the Fiscal 2021 Management Plan was for a single year.

Pursue competitive superiority		Enhancing sustainability
Expand new business fields		management
Enhance comprehensive		Initiatives to achieve net-zero
strengths of the Kuraray Group		carbon emissions by 2050

"PASSION 2026"		Sustainability
	Medium-Term Plan
	(2022-2026)			(2022-2026)
Innovations	Three	Sustainability
	as	Product People
Starting from
Networking	challengesan Opportunity
	Transformation			Planet
	of People and			Groupingmeasures
	Organization
			oftheSustainability
				Medium-Term
				Planundera
				"3P"model
	Fiscal 2021			Fiscal 2021
	Management Plan		Environmental Plan
	PROUD 2020			Medium-Term

Contribute to the environment

-Improved the natural environment: Expanded activated carbon business

-Enhanced the living environment: Strengthened and expanded the EVAL business and Plantic businesses

(2018-2020)	Environmental Plan
	(2018-2020)

Kuraray Report 2024	Kuraray Group Businesses "For People and the Planet" Toward Realizing the Vision Three Challenges Business and Growth Strategies Management Foundation	Corporate Data	23

Medium-Term Management Plan "PASSION 2026"

Based on our "Kuraray Vision 2026" long-term vision and Sustainability Long-Term Vision, the Kuraray Group is implementing "PASSION 2026," a five-year plan spanning fiscal 2022 to fiscal 2026.

Looking ahead at the coming era, in which predicting the longer-term outlook for the economy or the operating environment is extremely difficult, "PASSION 2026" identifies three new challenges for the Kuraray Group to take on to continue growing. These are: "Sustainability as an opportunity," "Innovations starting from networking," and "Transformation of people and organization."

Themes and Overview of Our Challenges

Sustainability as	Innovations Starting	Transformation of People
an Opportunity	from Networking	and Organization
Take sustainability as an opportunity	Create a growth driver by connecting	Transform people and organization via
and promote it with the collective	people with people, and technologies	digital-driven process innovation and
strength of the whole group	with technologies, both within and	the promotion of diversity which will,
	outside the Company	in turn, help us bring to bear a broad
		range of ideas
P.28	P.37	P.44

Management Targets

Through the steady implementation of the "PASSION 2026" management strategy, the Kuraray Group is targeting both net sales of ¥750 billion and operating income of ¥100 billion in the final year of the plan, 2026, which marks our 100th anniversary.

We have established ROIC, EBITDA, and ROE as financial KPIs to guide us in conducting management with an eye toward capital efficiency and steadily expanding our ability to generate cash. Furthermore, we will shift toward a more sustainable business portfolio, having set quantitative non-financial KPIs for greenhouse gas (GHG) emissions, the sales ratio of products that contribute to the natural and living environments, and the diversity of core human resources.

Net sales, operating income trends and plan during "PASSION 2026"

	Net Sales (Billions of yen)		Operating income (Billions of yen)

			.	PASSION	•
	.
	.		.
			.
	.		.	.	.	•
	.
						(FY)
	(Results)	(Results)	(Original forecast)	(Plan)	(Plan)

(reference)		FY2022	FY2023	FY2024	Assumptions during the Medium-Term
		results	results	Original forecast	Management Plan period
	JPY/USD	132	141	145	110
	JPY/Euro	138	152	160	130
	Domestic	75	68	75	58
	naphtha
	(JPY 1,000/kl)

Financial KPIs

	FY2023 result	FY2026 target
ROIC	6.2%	8%
EBITDA*1	¥152.6 billion	¥170.0 billion
ROE	6.2%	10%
EBITDA Margin (reference)	19.5%	23%
*1 Operating income + depreciation and amortization

Non-financial KPIs

	Benchmark		FY2023 result	Medium-,long-term Targets
				FY2030
	3,230 thousand	2,700 thousand	2,230 thousand
GHG emissions (Scope 1, 2)	tons-CO2e	tons-CO2e
tons-CO2e
	(in FY2019)	(30% less than
				benchmark)
Sales ratio of products		46%		FY2026
contributing to the natural		56%
(in FY2020)	60%
and living environments
Diversity of core human		12%	16%	FY2030
resources*2	(in Sep. 2021)	25%
Global talent development				FY2030
Ratio of senior managers taking global		-	40%
	60%
leadership training*3
Executive Candidate Development				FY2030
Ratio of candidates prepared for General Managers	-	90%
200%
equivalent positions*4
DX talent development*5
Number of participants per class (Achievement ratio)	-		FY2026
Gold class			44 (24%)	180
Silver class			163 (14%)	1,200
Bronze class			5,114 (90%)	5,700

*2 Ratio of managers in Japan who are women, foreign nationals and mid-career hires, excluding production sites *3 Currently around 300 general manager positions globally

*4 Ratio of staff completing management executive candidate development program to number of general manager level roles

*5 Only employees of Group companies in Japan