Asahi Kasei : Consolidated Results for 1st Quarter Fiscal 2022

Asahi Kasei Corporation

Head Office: 1-1-2 Yurakucho, Chiyoda-ku, Tokyo, Japan

Security code: 3407

Contact: Corporate Communications, Phone [phone], Fax [phone]

August 4, 2022

Consolidated Results for 1st Quarter Fiscal 2022:

April 1, 2022 - June 30, 2022

(All figures in millions of yen, rounded to the nearest million, unless otherwise specified)

I. Summary of Consolidated Results

1. Operating results (percent change from previous year in brackets)

		Q1 2022			Q1 2021
Net sales	670,441	[+14.9%]		583,433	[+28.2%]
Operating income	49,361	[−18.4%]	60,510	[+101.0%]
Ordinary income	51,535	[−20.9%]	65,171	[+115.6%]
Net income attributable to owners of the parent	29,831	[−35.7%]	46,428	[+241.7%]
Net income per share*	21.50		33.46
Diluted net income per share*		-		-

* Yen

Note: Comprehensive income was ¥160,652 million during Q1 2022, and ¥43,759 million during Q1 2021.

2. Financial position

	At end of			June 2022		March 2022
	Total assets	3,633,170	3,349,075
	Net assets	1,855,843	1,718,815
	Net worth/total assets	50.2%	50.4%
	Net worth per share*	1,314.39	1,216.33

* Yen

Notes:

• Net worth consists of shareholders' equity and accumulated other comprehensive income.
• Net worth was ¥1,823,437 million as of June 30, 2022, and ¥1,687,410 million as of March 31, 2022.

II. Cash Dividends

	Fiscal year						Cash dividends per share*
			Q1			Q2		Q3			Q4		Total annual
2021			-	17.00		-	17.00	34.00
2022			-
2022 (forecast)				18.00		-	18.00	36.00

* Yen

Note: The cash dividend forecast has not been revised.

Asahi Kasei	August 4, 2022
Consolidated Results	1/8

1. Forecast for Fiscal 2022 (April 1, 2022 - March 31, 2023)

1. Latest forecasts (percent change from results in year-ago period in brackets)

		For Q1-Q2			For the fiscal year
Net sales	1,387,000	[+17.4%]		2,731,000	[+11.0%]
Operating income	86,300	[−23.7%]	210,500	[+3.9%]
Ordinary income	87,500	[−26.6%]	216,500	[+2.1%]
Net income attributable to owners of the parent	52,800	[−42.2%]	164,500	[+1.6%]
Net income per share*	38.06		118.58

* Yen

Notes:

• Performance forecasts are based on the best information available at this time, but actual results may diverge from these forecasts due to a variety of factors which cannot be foreseen.
• The forecast for Q1-Q2 fiscal 2022 is newly added, while the full-year forecast is as announced on May 13, 2022.

IV. Other Information

1. Changes in significant subsidiaries which affected scope of consolidation during the period

Addition of one new subsidiary:

Bionova Holdings, Inc.

2. Special accounting methods for preparation of the consolidated financial statements

Income tax expenses: A reasonable estimate of the effective tax rate after applying tax-effect accounting for the current fiscal year is made, and quarterly income before income taxes is multiplied by the corresponding effective tax rate.

3. Changes in accounting policies, changes in accounting estimates, and retroactive restatement

Application of Implementation Guidance on Accounting Standard for Fair Value Measurement: Accounting Standards Board of Japan (ASBJ) Guidance No. 31 "Implementation Guidance on

Accounting Standard for Fair Value Measurement" is applied from the beginning of the first quarter of the fiscal year ending March 31, 2023. In accordance with Article 27-2 of the Implementation Guidance on Accounting Standard for Fair Value Measurement regarding transitional treatment, the new accounting policy is to be applied in the future. This change has no effect on the quarterly consolidated financial statements.

4.	Notable changes in shareholders' equity: None
5.	Number of shares outstanding
		Q1 2022	FY 2021
	Number of shares outstanding at end of period	1,393,932,032	1,393,932,032
	Number of shares of treasury stock at end of period	6,642,136	6,640,935
	Average number of shares outstanding during period	1,387,290,500	1,387,534,187*
			* Q1 2021

Asahi Kasei	August 4, 2022
Consolidated Results	2/8

V. Consolidated Financial Statements

1. Balance sheets

			At end of			At end of
			March 2022			June 2022
	Assets
	Current assets
	Cash and deposits	244,641		278,602
	Notes, accounts receivable-trade, and contract assets	434,595		449,072
	Merchandise and finished goods	252,521		282,932
	Work in process	146,120		162,429
	Raw materials and supplies	141,608		162,038
	Other	117,195		133,947
	Allowance for doubtful accounts	(2,471)		(2,354)
	Total current assets	1,334,209		1,466,667
	Noncurrent assets
	Property, plant and equipment
	Buildings and structures	646,311		658,333
	Accumulated depreciation	(333,966)		(340,265)
	Buildings and structures, net	312,344		318,068
	Machinery, equipment and vehicles	1,569,782		1,603,641
	Accumulated depreciation	(1,288,462)		(1,307,449)
	Machinery, equipment and vehicles, net	281,320		296,191
	Land	69,567		70,293
	Lease assets	8,679		13,840
	Accumulated depreciation	(6,814)		(7,065)
	Lease assets, net	1,865		6,775
	Construction in progress	102,284		103,158
	Other	159,312		163,765
	Accumulated depreciation	(121,477)		(122,166)
	Other, net	37,834		41,598
	Subtotal	805,215		836,084
	Intangible assets
	Goodwill	431,335		507,170
	Other	405,508		441,381
	Subtotal	836,843		948,551
	Investments and other assets
	Investment securities	246,701		247,468
	Long-term loans receivable	6,227		8,762
	Long-term advance payments-trade	30,432		30,295
	Net defined benefit asset	1,193		2,129
	Deferred tax assets	54,276		55,291
	Other	34,404		38,370
	Allowance for doubtful accounts	(426)		(448)
	Subtotal	372,808		381,868
	Total noncurrent assets	2,014,866		2,166,503
	Total assets	3,349,075		3,633,170

Asahi Kasei	August 4, 2022
Consolidated Results	3/8

			At end of			At end of
			March 2022			June 2022
	Liabilities
	Current liabilities
	Notes and accounts payable-trade	178,092		195,688
	Short-term loans payable	239,491		308,331
	Commercial paper	113,000		172,000
	Current portion of bonds payable		-	20,000
	Lease obligations	2,224		2,411
	Accrued expenses	146,275		126,806
	Income taxes payable	58,115		29,025
	Advances received	62,476		67,637
	Provision for grant of shares	208		208
	Provision for periodic repairs	4,738		7,152
	Provision for product warranties	4,007		4,280
	Provision for removal cost of property, plant and	4,445		5,384
	equipment
	Other	110,778		113,305
	Total current liabilities	923,850		1,052,227
	Noncurrent liabilities
	Bonds payable	160,000		140,000
	Long-term loans payable	253,785		294,861
	Lease obligations	8,715		12,199
	Deferred tax liabilities	52,017		55,815
	Provision for grant of shares	490		490
	Provision for periodic repairs	5,396		3,989
	Provision for removal cost of property, plant and	12,298		9,156
	equipment
	Net defined benefit liability	152,081		151,955
	Long-term guarantee deposits	22,490		22,531
	Other	39,139		34,103
	Total noncurrent liabilities	706,410		725,099
	Total liabilities	1,630,260		1,777,326
	Net assets
	Shareholders' equity
	Capital stock	103,389		103,389
	Capital surplus	79,887		79,860
	Retained earnings	1,282,325		1,288,431
	Treasury stock	(6,219)		(6,220)
	Total shareholders' equity	1,459,381		1,465,459
	Accumulated other comprehensive income
	Net unrealized gain on other securities	66,287		65,761
	Deferred gains or losses on hedges	(341)		(174)
	Foreign currency translation adjustment	167,225		297,169
	Remeasurements of defined benefit plans	(5,142)		(4,779)
	Total accumulated other comprehensive income	228,029		357,978
	Non-controlling interests	31,405		32,407
	Total net assets	1,718,815		1,855,843
	Total liabilities and net assets	3,349,075		3,633,170

Asahi Kasei	August 4, 2022
Consolidated Results	4/8

2. Statements of income and statements of comprehensive income 1) Statements of income

			Q1 2021			Q1 2022
Net sales	583,433		670,441
Cost of sales	388,057		464,487
Gross profit	195,376		205,954
Selling, general and administrative expenses	134,866		156,592
Operating income	60,510		49,361
Non-operating income
	Interest income	274		508
	Dividends income	1,565		1,646
	Equity in earnings of affiliates	3,685		1,600
	Other	1,695		1,508
	Total non-operating income	7,219		5,262
Non-operating expenses
	Interest expense	904		957
	Costs of idle facilities	108		713
	Other	1,545		1,418
	Total non-operating expenses	2,557		3,088
Ordinary income	65,171		51,535
Extraordinary income
	Gain on sales of investment securities	5,637		2,240
	Gain on sales of noncurrent assets	287		572
	Gain on step acquisitions	1,700			-
	Total extraordinary income	7,624		2,811
Extraordinary loss
	Loss on valuation of investment securities		-	1,033
	Loss on disposal of noncurrent assets	1,547		1,155
	Impairment loss	1		40
	Loss on fire at plant facilities		-	1,633
	Business structure improvement expenses	2,840		889
	Total extraordinary loss	4,388		4,750
Income before income taxes	68,407		49,596
Total income taxes	21,624		19,648
	Net income	46,783		29,948
	Net income attributable to non-controlling interests	355		117
Net income attributable to owners of the parent	46,428		29,831

Asahi Kasei	August 4, 2022
Consolidated Results	5/8