Chori : FY03/2024 Financial Results Materials (Highlights)

Translation ― Original text in Japanese

FY03/2024

(April 1, 2023 to March 31, 2024)

Financial Results

Materials

(Highlights)

April 26, 2024

FY03/2024 Financial Results Summary

Key Points of the Summary

POINT The first year of the Medium-Term Management Plan

"Chori Innovation Plan 2025"

• Profit at each stage exceeded our plan.
• Posted ordinary profit of ¥14.5 billion, net profit before income taxes of ¥14.7 billion, and net profit attributable to owners of parent of ¥9.6 billion, which were all record highs for a third straight year.

Business	⚫ Despite a year-on-year decline in sales, profit increased mainly due to improved
profitability.
results
⚫ The Fibers, Textiles and Garments business profit grew substantially. The Chemicals
summary
business also performed well.
	⚫ Equity ratio	57.2% Maintained at a high level.
Financial	⚫ ROE (net profit*1 basis)	12.5%
base	⚫ ROIC*2	12.4%
	*1: Net profit attributable to owners of parent
	*2: ROIC = Operating profit after income taxes / shareholders' equity (Equity + Interest-bearing debt) average during the period

Dividends

• Year-enddividend increased from the dividend forecast announced on April 28, 2023.

Year-end dividend ¥60 per share (Dividend increase of ¥2 per share) Annual dividend ¥118 per share Consolidated dividend payout ratio: 30.2% Dividend on equity ratio (DOE): 4.1%

Topics

• The company-wide business transformation project (mission critical system (SAP) implementation project, called CARAT) is progressing with system development as planned towards full-scale operation from FY2025.
• The Sustainability Promotion Committee was established on April 1, 2024.
  Today, we announced our materiality (key issues) and basic sustainability policy, etc.

CHORI CO., LTD.

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FY03/2024 Financial Results Summary

Business Results Breakdown (YoY Comparison)

POINT	⚫ The Japanese economy is on a gradual recovery trend due to the rebound of the manufacturing
		industry and other factors. The outlook for the global economy is increasingly uncertain due to
		geopolitical risks such as Russia's invasion of Ukraine and conflict in the Middle East, as well as
		prolonged real estate recession in China, and other factors.
		⚫ Net sales decreased mainly due to lower sales in the Chemicals business outside Japan, but
		profit at each stage increased. The Fibers, Textiles and Garments business grew substantially,
		driven by expansion of fiber raw materials and domestic apparel-related products as well as
		improved profitability.

Unit: billions of yen	FY03/2023	FY03/2024	Difference	Ratio
Net sales	329.4	307.7	-21.7	-6.6%
Gross profit	37.1	38.7	+1.7	+4.5%
Selling, general and administrative expenses	24.4	23.7	-0.7	-2.9%
Operating profit	12.7	15.0	+2.4	+18.8%
Ordinary profit	12.4	14.5	+2.0	+16.4%
Net profit before income taxes	12.8	14.7	+1.9	+14.9%
Net profit attributable to owners of parent	8.1	9.6	+1.5	+18.5%

CHORI CO., LTD.

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FY03/2024 Financial Results Summary

Reasons for Changes in Net Profit before Income Taxes

Unit: billions of yen	+4.0	+0.7	-0.4	-0.2	+0.3
-2.5		SG&A	Share of	Gain on	Non-
		decrease	profit (loss)	sale of	operating
			of entities	investment	profit (loss),
Effect of	Increased		accounted	securities Extraordinary
	for using		profit (loss),
decreased	profit ratio
	equity		etc.
sales
		method		14.7
12.8
FY03/2023					FY03/2024
Trends in Business Performance
		FY03/2023		FY03/2024

		1Q	2Q	3Q	4Q	Full-year	1Q	2Q	3Q	4Q	Full-year
		total	total
Net sales	81.9	86.6	86.9	74.0	329.4	75.8	77.1	80.5	74.3	307.7
Net profit (loss) before income taxes	3.7	4.1	3.6	1.4	12.8	3.6	4.2	4.2	2.7	14.7
	Fibers, Textiles and Garments	0.8	1.2	1.7	1.4	5.1	1.9	2.4	2.1	1.6	8.0
	Chemicals	2.5	2.8	2.2	1.6	9.1	2.1	2.1	1.9	1.5	7.6
	Machinery	-0.0	0.3	-0.2	-1.4	-1.3	-0.5	-0.3	0.4	-0.2	-0.6
	Others*	0.4	-0.2	-0.1	-0.2	-0.2	0.0	-0.0	-0.3	-0.1	-0.4
Net profit attributable to owners of parent	2.3	2.5	2.8	0.6	8.1	2.2	2.8	3.0	1.6	9.6
*"Others" includes adjustments.												3
										CHORI CO., LTD.

FY03/2024 Financial Results Summary

Segment Results

Net sales	■ Fibers, Textiles and Garments
Unit: billions of yen	■ Chemicals ■ Machinery ■ Others		FY03/2023	FY03/2024	Difference
144.8	145.9		Fibers, Textiles	144.8	145.9	+1.0
	and Garments
			Chemicals	180.0	160.0	-20.0
180.0			Machinery	4.4	1.7	-2.7
160.0		Others	0.1	0.1	-0.0
	1.7
	4.4	Total	329.4	307.7	-21.7
	0.1	0.1
FY03/2023	FY03/2024

Net profit (loss) before income taxes

Unit: billions of yen		■ Fibers, Textiles and Garments
		■ Chemicals ■ Machinery ■ Others*
	5.1		8.0
	9.1		7.6
		-0.2		-0.4
	FY03/2023	-1.3	FY03/2024	-0.6

	FY03/2023	FY03/2024	Difference
Fibers, Textiles	5.1	8.0	+2.9
and Garments
Chemicals	9.1	7.6	-1.5
Machinery	-1.3	-0.6	+0.6
Others*	-0.2	-0.4	-0.2
Total	12.8	14.7	+1.9

*"Others" includes adjustments.

Fibers, Textiles and Garments	Chemicals		Machinery
Significant increased profit	Decreased sales and profit	Decreased sales and segment loss
Strong	Overall	Sluggish	Overall decrease in demand	Loss	Foreign exchange loss
			and poor market conditions
Expansion	Fiber raw materials・	Steady	Fine chemicals・Life science
	Domestic apparel-related				CHORI CO., LTD.

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FY03/2024 Financial Results Summary

Net Sales by Operation

POINT	⚫ Decreased sales across all operations. Overseas sales decreased primarily in
		the China business and the Chemicals business.
		⚫ Trade ratio: 67.1% 1.9pt decrease YoY

Unit: billions of yen

			102.2	-1.0
				101.2
	Domestic	98.8	-5.6	93.2
	Import
	Export	39.5	-1.9	37.6
	Overseas	88.9	-13.2	75.7
			FY03/2023		FY03/2024

Diff.

Domestic	Amount of domestic sales
sales	from domestic suppliers

Overseas transactions

Import	Amount of net sales from
sales	overseas to Japan
Export	Amount of net sales from Japan
sales	to overseas
Overseas	Amount of net sales from
sales	overseas business

CHORI CO., LTD.

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FY03/2024 Financial Results Summary

Financial Position

■ Total assets	■ Net interest-bearing debt
■ Equity		Equity ratio
Unit: billions of yen
143.2	143.4

57.2%

50.4%

82.1

72.2

-13.9-18.7

31-Mar-2331-Mar-24

Financial soundness

	31-Mar-23	31-Mar-24	Difference
Total assets	143.2	143.4	+0.2
Net interest-bearing debt	-13.9	-18.7	-4.8
Equity	72.2	82.1	+9.9
Equity ratio	50.4%	57.2%	+6.8pt

Profitability/Capital efficiency

31-Mar-2331-Mar-24 Difference

ROA	5.9%	6.7%	+0.8pt
(Net profit*1 basis)
ROE	11.8%	12.5%	+0.7pt
(Net profit*1 basis)
ROIC*2	10.8%	12.4%	+1.6pt
(Reference) ROA	9.0%	10.1%	+1.1pt
(Ordinary profit basis)

*1: Net profit attributable to owners of parent

*2: ROIC = Operating profit after income taxes / shareholders' equity (Equity + Interest-bearing debt) average during the period

CHORI CO., LTD.

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FY03/2024 Financial Results Summary

Cash Flows

POINT

⚫ Cash and cash equivalents amounted to ¥21.1 billion.

Operating activities: Provided ¥9.7 billion due to net profit before income taxes (¥14.7 billion) and others

Investing activities : Used ¥2.7 billion mainly due to the purchase of intangible assets associated with the introduction of a mission-critical system (¥1.9 billion)

Financing activities: Used ¥5.4 billion mainly due to dividend payments (¥2.8 billion), repayments of borrowings (¥2.4 billion) and others

Unit: billions of yen	FY03/2023	FY03/2024	Difference
Cash flows from operating activities	9.6	9.7	+0.1
Cash flows from investing activities	-0.3	-2.7	-2.4
Cash flows from financing activities	-3.1	-5.4	-2.3
Effect of exchange rate change on cash and cash equivalents	0.6	0.6	+0.0
Total cash flows	6.8	2.2	-4.6
Cash and cash equivalents at end of period	18.9	21.1	+2.2

CHORI CO., LTD.

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FY03/2024 Financial Results Summary

FY03/2025 Business Results Forecast

POINT

⚫ Steadily promoting The Medium-Term Management Plan "Chori Innovation Plan 2025"

• We are on track to achieve record profits for the fourth consecutive year and net profit attributable to owners of parent of ¥10 billion.

Cf. Final Year (FY03/2026) Financial Targets

Net sales ¥360.0 billion, net profit before income taxes ¥16.0 billion, net profit attributable to owners of parent ¥11.0 billion, ROA (net profit*1 basis): 7% or higher, ROE (net profit*1 basis): 12% or higher, ROIC*2 Approx.10%

*1: Net profit attributable to owners of parent

*2: ROIC = Operating profit after income taxes / shareholders' equity (Equity + Interest-bearing debt) average during the period

	Unit: billions of yen	FY03/2024	FY03/2025	Difference
	Result	Forecast
Net sales	307.7	320.0	+12.3
	Fibers, Textiles and Garments	145.9	155.0	+9.1
	Chemicals	160.0	163.0	+3.0
	Machinery	1.7	2.0	+0.3
	Others	0.1	－	-0.1
Net profit (loss) before income taxes	14.7	15.0	+0.3
	Fibers, Textiles and Garments	8.0	6.8	-1.2
	Chemicals	7.6	8.0	+0.4
	Machinery	-0.6	0.2	+0.8
	Others*	-0.4	－	+0.4
Net profit attributable to owners of parent	9.6	10.0	+0.4
						8
* Others" includes adjustments.			CHORI CO., LTD.
"

FY03/2024 Financial Results Summary

Dividend

Dividend policy

FY03/2024 Year-end dividend

FY03/2025 Dividend forecast

Consolidated dividend payout ratio of at least 30% and dividend on equity (DOE) ratio of 3.5% or more (FY03/2024 -)

Based on FY03/2024 consolidated results, the year-end dividend will be ¥60 per share, an increase of ¥2 per share from the previous forecast of ¥58 per share. Combined with the interim dividend of ¥58 per share, the annual dividend is ¥118 per share.

The annual dividend forecast is ¥122 per share (interim dividend of ¥61 per share, year-end dividend of ¥61 per share), an increase of ¥4 per share from FY03/2024.

Trends in dividends per share (Annual)	DOE of 3.5% or more

■ ■ Dividends in yen, % show consolidated dividend payout ratio EPS: Net profit per share

Unit: yen		Consolidated dividend payout ratio of
		30% or more		406
			391
		277	330	Annual 118	Annual 122
248
		30%
			30%
	51			60	61
				Fiscal year-end
				Fiscal year-end
		84	105
63		32%		61
	30%		58
25%				Interim
			Interim
	37
	73%
FY03/2020	FY03/2021	FY03/2022	FY03/2023	FY03/2024	FY03/2025
					(Forecast)

CHORI CO., LTD.

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