Osaka Organic Chemical Industry : Presentation Materials for Financial Results for the Third Quarter of the Fiscal Year Ending November 30, 2023

Translation

Note: This document has been translated from the Japanese original for reference purposes only.

In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

October 6, 2023

Presentation Materials for Financial Results

for the Third Quarter of the Fiscal Year

Ending November 30, 2023

(December 1, 2022 - August 31, 2023)

Our products are invisible, but used around you.

OSAKA ORGANIC CHEMICAL INDUSTRY LTD.

Tokyo Stock Exchange, Prime Market: 4187

3Q FY11/2023 Financial Summary		2
Operating environment	Net sales	Operating profit

The economy is on a moderate recovery trend in line with the transition to after covid-19. However, the outlook remains uncertain due to the possibility of an economic downturn overseas, including in Europe, the United States, and China, as well as the persistently high prices of raw materials and energy.

Sales in the Chemicals and Electronic Materials segment decreased due to sluggish demand for displays, semiconductors, and other products. As a result, net sales decreased 10.5% year on year to ¥21.754 billion.

Operating prifit was ¥3.056 billion (down 32.5% from the same period last year) due to the impact of decreased sales and soaring raw material and fuel prices.

(million yen)

3Q FY11/22

results

Net sales

24,317

3Q FY11/23

results

21,754

YoY change

Amount

％

△2,562 △10.5%

Progress rate

FY11/23	3Q
Forecast	Progress rate
29,000	75.0%

Operating profit	4,531	3,056	△1,474	△32.5%
Ordinary profit	4,921	3,298	△1,622	△33.0%
Profit attributable to	3,417	2,682	△734	△21.5%
owners of parent
Price of naphtha in	77,400	66,000	-	-
Japan (Yen/KL)
Exchange rate	125	137	-	-
(Yen/USD)

3,800	80.4%
4,000	82.5%
2,800	95.8%
-	-
-	-

3Q FY11/23 Financial Summary	3

Operating profit decreased by ¥1.47 billion from the same quarter of the previous fiscal year due to a decrease in sales in the Chemicals and Electronic Materials segment and an increase in electricity costs.

Decrease in net sales

-¥2.56 billion

Chemical products	-¥1.21 billion
Electronics materials	-¥1.35 billion
Specialty chemicals	+¥0.00 billion

Decrease in cost of goods sold

-¥1.03 billion

Decrease in cost of raw materials	-¥1.14 billion
Inventory write-down	+¥0.21 billion
Increase in electricity costs	+¥0.11 billion
Decrease in depreciation	-¥0.11 billion
	Others

Decrease in SG&A

-¥0.05 billion

Decrease in transportation	-¥0.04 billion
expenses	Others

Decrease in net sales

		Blue / ↑: Positive factors
		Red / ↓: Negative factors
Decrease in cost	Slight decrease
in SG&A
of goods sold
Operating		Operating
profit		profit
¥4.53 billion		¥3.05 billion
Operating profit	-¥1.47 billion

2022/3Q	Change in net sales		Change in cost of goods sold		Change in SG&A	2023/3Q

■ Chemical products

4

3Q	FY11/23 Full-year	Progress ratio vs.	Net sales / operating margin
Net sales	forecast	full-year forecast
¥7.28 bn	¥9.47 bn	76.9%		売上高	営業利益率（右軸）
			(billion yen)
●Operating environment		3.00	2.83	2.81	2.85			20
			2.70	(%)
・Automobile production is on a recovery trend.					2.53		2.70
・Inventory adjustments continued in TV and other display-related products,					2.46
The price is also in the direction of gradual recovery.					2.11		2.35
						2.31
●OOC
・Sales for automotive coatings were solid.					2.11
			10.6
・Sales of adhesives for displays gradually recovered.
						11.9
・Sales of materials for UV inkjet inks were sluggish.
							10
●Market risks				9.1		6.9
・Crude oil prices remain high.							7.5
・Higher cost of raw materials derived from natural resources.				6.4
・Sudden foreign exchange movements.
						2.9
			0.00						0
							(Dotted line: Forecast)

■ Electronics materials		5
	3Q	FY11/23 Full-year	Progress ratio vs.	Net sales / operating margin
	Net sales	forecast	full-year forecast

¥9.98 bn	¥13.41 bn	74.4%		売上高		営業利益率（右軸）
		(billion yen)
●Operating environment	4.00	3.87	3.79	3.88					50
							(%)
		3.67
・Deterioration in market conditions in the semiconductor market materialized,					3.32	3.45	3.50
and there are signs that recovery will lag behind initial expectations.				3.23
				3.42
・Progress is continuing	with the practical use of	state-of-the-art EUV							40
				3.23
lithography.						3.23
・The display market is on a recovery trend.
●OOC										30
・Sales of mainstay raw materials for ArF resists were sluggish due to weak	27.9
demand in the end-market.
			24.4
・Despite a recovery trend, the display materials group decreased year on year.		26.9
・Sales of EUV materials continued to be healthy.									20
		20.7
●Market risks						17.9	14.4	16.7
・Escalation of the U.S.-China economic confrontation.									10
・Delay in recovery of the semiconductor market.
		0.00								0
							(Dotted line: Forecast)