Kureha : FY2022 Summary

Quarterly Financial Summary

Note: This is an English translation of selected parts of the Quarterly Financial Summary in Japanese and is for reference purposes only. In the event of any discrepancy between the translation and the original Japanese text, the latter will prevail.

Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

(IFRS)

	May 12, 2023
Company name:	Kureha Corporation
Stock listing:	Tokyo Stock Exchange
TSE code:	4023
URL:	https://www.kureha.co.jp/en/
Representative:	Yutaka Kobayashi, President and Chief Executive Officer

Contact/Inquiries: Takayuki Ogawa, IR Group Leader, Corporate Planning Department; Phone [phone]

Scheduled date for general meeting of shareholders:	June 27, 2023
Scheduled date for filing securities report:	June 27, 2023
Scheduled date of dividend payment:	June 2, 2023
Supplementary materials for quarterly financial results:	Available
Financial results briefing:	Yes (for institutional investors and analysts)
	(Figures are rounded off to the nearest million yen)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2023 (From April 1, 2022 to March 31, 2023)

(1) Consolidated Operating Results												(% figures indicate year-on-year changes)
														Profit attributable	Total
	Revenue	Operating profit	Profit before tax	Profit		to owners of	comprehensive
														parent		income
Fiscal year ended	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen		%	Millions of yen		%	Millions of yen		%
March 31, 2023	191,277		13.6		22,350	11.0	22,992	12.7	16,978		18.8	16,868	19.1	20,947		10.5
March 31, 2022	168,341		16.4		20,142	16.7	20,398	14.9	14,293		5.0	14,164		5.0	18,955	(15.8)
	Basic earnings		Diluted earnings		Return on		Return on		Operating profit to
	per share		per share		equity			assets			revenue ratio
Fiscal year ended				Yen			Yen			%					%				%
March 31, 2023			864.30			862.89			8.1					7.9				11.7
March 31, 2022			725.73			724.67			7.4					7.6				12.0
(Reference) Share of profit of investments accounted for using equity method:
Fiscal year ended March 31, 2023: 1,325 million yen
Fiscal year ended March 31, 2022: 2,020 million yen
(2) Consolidated Financial Position
													Ratio of equity		Equity attributable
								Equity attributable			attributable to
	Total assets		Total equity			to owners of parent
		to owners of parent	owners of parent to
									per share
													total assets

As of

March 31, 2023

March 31, 2022

Millions of yen

296,404

282,639

Millions of yen

216,774

200,724

Millions of yen

215,199

199,219

%

72.6

70.5

Yen

11,026.02

10,207.32

(3) Consolidated Cash Flows

	Cash flows from	Cash flows from	Cash flows from	Cash and cash equivalents
	operating activities	investing activities	financing activities	at end of period
Fiscal year ended	Millions of yen	Millions of yen	Millions of yen	Millions of yen
March 31, 2023	22,744	(11,100)	(10,484)	32,205
March 31, 2022	28,581	(10,999)	(6,105)	30,639

1

2. Dividends

		Annual dividends		Total dividends	Payout ratio	Dividend on
	First	Second	Third			equity ratio
	Year-end	Total	paid (annual)	(consolidated)
	quarter	quarter	quarter	(consolidated)
Fiscal year ended	Yen	Yen	Yen	Yen	Yen	Millions of yen	%	%
March 31, 2022	―	85.00	―	125.00	210.0	4,098	28.9	2.1
March 31, 2023	―	125.00	―	145.00	270.0	5,269	31.2	2.5
(Forecast)
Fiscal year ending	―	130.00	―	130.00	260.00		31.7
March 31, 2024

3. Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2024 (From April 1, 2023 to March 31, 2024)

(% figures indicate year-on-year changes)

	Revenue		Operating profit	Profit before tax	Profit attributable to	Basic earnings
		owners of parent	per share
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Six months ending	96,000		(5.7)	8,000	(52.2)	8,000	(54.0)	5,300	(56.5)	280.16
September 30, 2023
Fiscal year ending	190,000		(0.7)	22,000	(1.6)	22,000	(4.3)	15,500	(8.1)	819.35
March 31, 2024

• Notes
• 1. Changes in significant subsidiaries during the period under review (changes in specified subsidiaries affecting the scope of consolidation): None
  2. Changes in accounting policies and changes in accounting estimates

1)	Changes in accounting policies required under IFRS:	None
2)	Changes in accounting policies other than those in item 1) above:	None
3)	Changes in accounting estimates:	None

(3) Number of shares issued (common stock)

1. Number of shares outstanding at the end of the period (including treasury shares)
2. Number of treasury shares at the end of the period
3. Average number of shares outstanding during the period

As of March 31, 2023	20,805,407 shares	As of March 31, 2022	20,805,407 shares
As of March 31, 2023	1,287,970 shares	As of March 31, 2022	1,288,121 shares
As of March 31, 2023	19,517,564 shares	As of March 31, 2022	19,517,544 shares

2

(Reference) Summary of Non-consolidated Financial Results

1. Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2023 (from April 1, 2022 to March 31, 2023)

(1) Non-consolidated Operating Results					(% figures indicate year-on-year changes)
	Revenue		Operating profit		Ordinary profit	Profit
Fiscal year ended	Millions of yen		%	Millions of yen		%	Millions of yen	%	Millions of yen		%
March 31, 2023	108,234		20.8	11,397		9.4	13,992	1.7	12,228		10.0
March 31, 2022	89,585		19.7	10,414		34.7	13,757	39.7	11,114		(22.5)

Fiscal year ended

March 31, 2023

March 31, 2022

Basic earnings per share	Diluted earnings per share
Yen	Yen
626.54	625.52
569.48	568.64

(2) Non-consolidated Financial Position

Total assets

Net assets

Equity ratio

Net assets per share

As of	Millions of yen	Millions of yen	%
March 31, 2023	216,612	164,126	75.7
March 31, 2022	205,013	155,874	76.0
(Reference) Equity:	As of March 31, 2023: 163,954 million yen
	As of March 31, 2022: 155,732 million yen

%

8,400.40

7,979.23

• This financial summary is outside the scope of review by certified public accountants or audit corporations.
• Note to ensure proper use of financial forecasts, and other noteworthy matters
  All forecasts and forward-looking statements in this report are based on information currently available to the Company and

assumptions that are deemed to be reasonable, but Kureha Corporation does not guarantee the achievement of these forecasts. Actual results may differ significantly as a consequence of numerous factors. For more information regarding the assumptions and terms the Company applied when formulating earnings forecasts and precautions that should be taken when utilizing these earnings forecasts, please refer to "(4) Outlook for the Fiscal Year Ending March 31, 2024 and Beyond" included under the section "1. Overview of Operating Results and Outlook" on page 4 of the attached document.

3

(Attachment)
1.	Overview of Operating Results and Outlook	2
	(1)	Overview of Operating Results for the Period under Review	2
	(2)	Overview of Financial Position for the Period under Review	3
	(3)	Overview of Cash Flows for the Period under Review	4
	(4)	Outlook for the Fiscal Year Ending March 31, 2024 and Beyond	4
2.	Group Companies	5
3.	Basic Policy Regarding Selection of Accounting Standards	5
4.	Consolidated Financial Statements and Important Notes	6
	(1)	Consolidated Statement of Financial Position	6
	(2)	Consolidated Statements of Income and Comprehensive Income	8
	(3)	Consolidated Statement of Changes in Equity	10
	(4)	Consolidated Statement of Cash Flows	12
	(5)	Notes to Consolidated Financial Statements	13
		(Notes Regarding Assumption of a Going Concern)	13
		(Segment Information)	13
		(Consolidated Statement of Income)	14
		(Per-share Data)	16
		(Important Subsequent Events)	167

1

1. Overview of Operating Results and Outlook

1. Overview of Operating Results for the Period under Review
   (Overview of Period under Review)

						(Millions of yen)
	Revenue	Operating profit	Profit before tax	Profit	Profit attributable	Basic earnings
	to owners of	per share
					parent
Fiscal year ended	191,277	22,350	22,992	16,978	16,868	864.30 yen
March 31, 2023
Fiscal year ended	168,341	20,142	20,398	14,293	14,164	725.73 yen
March 31, 2022
Change	22,936	2,207	2,594	2,684	2,704	―

During the fiscal year ended March 31, 2023, the Japanese and global economies saw increased normalization of economic and social activities as the impact of the COVID-19 pandemic moderated. Despite expectations of economic recovery, the outlook remained uncertain due to concerns about the effects of global monetary tightening, soaring fuel and raw material prices, a shortage of semiconductors, and the protracted conflict in Ukraine.

Under these circumstances, the Kureha Group maintained stable business activities while striving to prevent the spread of COVID-19 infection and reduce the risk of infection. Early in the first quarter, a renewed surge in COVID-19 infections triggered lockdowns in China, which caused a halt to operations at the local plant that manufactures carbon products for the Advanced Materials business. But the impact of this temporary shutdown was immaterial. Furthermore, although higher fuel and raw material prices have had an adverse impact on our business results, we are taking steps such as appropriately reflecting these costs in product prices with the understanding of our customers.

Revenue in the fiscal year ended March 31, 2023, increased year on year, especially with increased sales of polyvinylidene fluoride (PVDF) used as a binder material for lithium-ion secondary batteries at the Advanced Materials segment. Although, core operating profit decreased due to fuel and raw material cost increase, Operating profit increased year on year despite impairment losses on fixed assets related to the packaging materials category at the Specialty Plastics segment recorded under "Other expenses", which had smaller impact compared to impairment losses on fixed assets related to Advanced Material segment recorded last fiscal year.

Revenue was 191,277 million yen (up 13.6% year on year), operating profit was 22,350 million yen (up 11.0% year on year), profit before tax was 22,992 million yen (up 12.7% year on year), profit was 16,978 million yen (up 18.8% year on year), and profit attributable to owners of parent was 16,868 million yen (up 19.1% year on year).

Results by segment were as follows:

					(Millions of yen)
		Revenue			Operating profit
	Fiscal year ended	Fiscal year ended	Change	Fiscal year ended	Fiscal year ended		Change
	March 31, 2022	March 31, 2023	March 31, 2022	March 31, 2023
Advanced Materials	66,687	82,693	16,005	9,953	10,147		193
Specialty Chemicals	26,157	31,784	5,627	1,432	1,849		417
Specialty Plastics	44,773	46,792	2,018	9,862	8,607		(1,254)
Construction	12,174	11,310	(864)	985	881		(104)
Other Operations	18,547	18,696	148	3,069	2,821		(248)
Segment Total	168,341	191,277	22,936	25,304	24,308		(995)
Adjustments*	―	―	―	(5,161)	(1,957)		3,203
Consolidated Total	168,341	191,277	22,936	20,142	22,350		2,207

Note: Operating profit adjustments include other income and expenses not allocated to reporting segments. For details, refer to "Consolidated Statement of Income" under "(5) Notes to Consolidated Financial Statements."

1. Advanced Materials

In the advanced plastics category, revenue rose on higher sales of polyvinylidene fluoride (PVDF) used as a binder material for lithium-ion secondary batteries, polyglycolic acid (PGA) products used in the process of shale oil and gas fracking, polyphenylene sulfide (PPS), and other processed plastics products. However, operating profit declined in part due to such as energy and raw material cost increase.

Revenue and operating profit also rose in the carbon products category as sales of carbon fiber used in heat insulating material for high-temperature furnaces and sliding additive for automotive application increased.

As a result, revenue in Advanced Materials was 82,693 million yen (up 24.0% year on year) and operating profit was 10,147 million yen (up 1.9% year on year).

2