Kureha : FY2022 1Q Results

FY2022 1Q Results

August 9, 2022

Highlights

FY2022 1Q Results

YoY: Delivered strong revenue and profit growth driven by broad-based pricing actions for advanced plastics and volume gains in Advanced Materials, more than offsetting higher fuel and raw material costs and increased SG&A expenses in Specialty Chemicals and Specialty Plastics QoQ: Both revenue and profit up sequentially due primarily to expanded PVDF and agrochemicals sales and seasonal demand for home products, coupled with the absence of impairment losses recorded in 4Q/FY21

FY2022 2Q(Half-year) Outlook

Vs. FY21 2Q: Projecting top and bottom line growth as Advanced Materials sales continue to expand, partially offset by inflationary impacts on Specialty Chemicals and Specialty Plastics and slower environmental businesses related to industrial waste treatment. 2Q profit growth likely to slow down verses 1Q with further impacts of surging energy and raw material prices.

Vs. Initial forecast: Upgrading 2Q forecast to reflect limited impact of presumed risks seen during 1Q; expected revenue expansion led by a weaker Japanese yen, higher prices and higher agrochemical sales volumes (a front-loaded delivery); and spending of SG&A expenses postponed to 3Q-4Q

*Kureha will continually monitor the impact of potential risks and announce its updated full-year forecast based on changes in the business conditions when reporting 2Q results.

1

	1Q/FY21 4Q/FY21	1Q/FY22	YoY	QoQ
AM	1.0	5.8	5.6	+4.7	-0.1
SC	-0.0	-0.7	-0.3	-0.3	+0.4
SP	2.3	1.3	2.1	-0.2	+0.8
CO & Other	1.0	1.1	0.7	-0.3	-0.4
Adjustments	0.0	-5.5	0.0	-0.0	+5.5
Core operating	4.3	2.0	8.1	+3.9	+6.2
profit

		2Q/FY22	2Q/FY22	Vs.	Vs.
	2Q/FY21	Initial	Revised	Initial
	2Q/FY21
		forecast	forecast		forecast
AM	2.6	5.2	7.5	+4.9	+2.3
SC	1.2	0.5	0.8	-0.4	+0.3
SP	5.1	3.5	3.7	-1.4	+0.2
CO & Other	2.2	1.3	1.3	-0.9	+0.0
Adjustments	0.2	-0.5	-0.3	-0.5	+0.2
Core operating	11.4	10.0	13.0	+1.6	+3.0
profit

2

FY2022 1Q Summary (1)

		(in billions of yen)		Vs. FY2021 1Q
	FY2021	FY2022	Change
		• Revenue growth led by advanced plastics,
	1Q	1Q	YOY
Revenue	37.8	49.3	11.4		particularly PVDF binder for lithium-ion
	batteries
(+30.2%)
Core operating profit	4.2	8.1	3.9		• Higher core operating profit driven by strong
(+92.1%)		gains in advanced plastics
Adjustments	0.0	-0.0	-0.1		• Operating profit increased as a result of higher
Other income	0.1	0.2	0.1
	core operating profit
Other expenses	0.1	0.2	0.1
Operating profit	4.3	8.1	3.9		• Profit attributable to the Company increased as
(+91.4%)		a result of higher profit before taxes
Financial income	0.2	0.4	0.2
Financial expenses	0.1	0.1	-0.1
Profit before taxes	4.4	8.5	4.2
(+95.4%)
Profit attributable to	3.3	5.5	2.2
owners of Kureha Corp.	(+65.3%)
Profit per share (¥)	¥169.26	¥279.79

[References] FOREX ¥/USD:	¥109.5	¥129.7
¥/EUR:	¥131.9	¥138.3
¥/CNY:	¥17.0	¥19.6

3

FY2022 Q1 Summary (2)

Performance by Segment (vs. 1Q/FY21)

Revenue

24.5

1Q/FY21 1Q/FY22

14.2

11.2 11.9

5.36.6

4.4 4.3

2.6 1.9

Advanced	Specialty	Specialty Construction	Other
Materials	Chemicals	Plastics	Operations

(in billions of yen)

Core operating profit

5.6				2.3 2.1			1Q/FY21				1Q/FY22
1.0
								0.1 0.1		0.9	0.6
				-0.0
				-0.3
Advanced	Specialty	Specialty Construction			Other
Materials	Chemicals	Plastics	Operations

Factors attributing to changes in core operating profit

AM: Sales expansion of PVDF, PPS, PGA and other plastic products

SC: Higher agrochemicals volumes more than offset by impact of mandatory drug price revisions and higher fuel and raw material costs

SP: Higher packaging materials volumes more than offset by slower home product and fishing line sales

CO: Fewer private construction projects

OO: Decreased volumes related to industrial waste treatment

Segment Performance: Advanced Materials

(billions of yen)

	FY2021	FY2022	Change
	1Q	1Q	%
Advanced Materials
Advanced plastics	9.7	19.2	+98%
Carbon products	1.5	1.5	+7%
Other	3.1	3.7	+20%
Revenue	14.2	24.5	+72%
Operating profit	1.0	5.6	+481%

4

Vs. FY2021 1Q

Revenue ➚ Operating profit ➚

Advanced plastics

Revenue up, profit up:

• Continued strong demand for PVDF in the automotive LiB market
• higher PPS and PGA sales volumes

Carbon products

Revenue and profit leveled off:

- Sales volumes of carbon fiber used for high- heat furnace insulation and automotive sliding materials on par with prior year