Consolidated Results for 1st and 2nd Quarter Fiscal 2021

Asahi Kasei Corporation

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

Security code: 3407

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

November 5, 2021

Consolidated Results for 1st and 2nd Quarter Fiscal 2021:

April 1, 2021 - September 30, 2021

(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-Q2 2021			Q1-Q2 2020
	Net sales	1,181,049	[+19.4%]		989,387	[−7.4%]
	Operating income	113,144	[+47.4%]		76,769	[−24.5%]
	Ordinary income	119,233	[+53.9%]		77,474	[−26.4%]
	Net income attributable to owners of the parent	91,290	[+95.1%]		46,781	[−39.9%]

Net income per share*	65.79	33.72
Diluted net income per share*	-	-
		* Yen

Note:

Comprehensive income was ¥97,609 million during Q1-Q2 2021, and ¥45,259 million during Q1-Q2 2020.

2. Financial position

	At end of			September 2021		March 2021
	Total assets	3,045,446	2,918,941
	Net assets	1,577,289	1,494,535
	Net worth/total assets	50.9%	50.3%
	Net worth per share*	1,116.52	1,057.61

* Yen

Notes:

• Net worth consists of shareholders' equity and accumulated other comprehensive income.
• Net worth was ¥1,549,129 million as of September 30, 2021, and ¥1,467,476 million as of March 31, 2021.

II. Cash Dividends

	Fiscal year						Cash dividends per share*
			Q1			Q2			Q3			Q4		Total annual
2020			-	17.00			-	17.00	34.00
2021			-	17.00
2021 (forecast)								-	17.00	34.00

* Yen

Asahi Kasei	November 5, 2021
Consolidated Results	1/9

1. Forecast for Fiscal 2021 (April 1, 2021 - March 31, 2022)

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

For the fiscal year

Net sales	2,453,000	[+16.5%]
Operating income	213,100	[+24.1%]
Ordinary income	222,000	[+24.7%]
Net income attributable to owners of the parent	185,500	[+132.5%]
Net income per share*	133.69

* 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 fiscal 2021 announced on August 6, 2021, has been revised.

IV. Other Information

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

Addition of two new subsidiaries:

McDonald Jones Homes Pty Ltd

Respicardia, 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 Accounting Standard for Revenue Recognition, etc.:

Accounting Standards Board of Japan (ASBJ) Statement No. 29 "Accounting Standard for Revenue Recognition" and other standards are applied from the beginning of the first quarter of the fiscal year ending March 31, 2022, whereby revenue is recognized in the amount foreseeable to be received in exchange for goods or services at the time control of promised goods or services is transferred to the customer.

Accordingly, the method of revenue recognition for contracted construction is changed, mainly in the Homes segment. Whereas previously the construction completion standard was applied to works whose outcome lacked certainty, this is changed to recognizing revenue over a certain period when conditions of performance obligations are fulfilled over a certain period. Measurement of progress related to fulfilment of performance obligations is based on the proportion of the total foreseen construction cost which is incurred by the closing date of each financial period.

In accordance with the proviso of Article 84 of the Accounting Standard for Revenue Recognition, the cumulative effect of retroactive application is adjusted to retained earnings as of the beginning of the first quarter of the fiscal year ending March 31, 2022. However, in accordance with Article 86 of the Accounting Standard for Revenue Recognition, the new accounting standard is not applied retroactively to contracts for which nearly all revenue was recognized by the previous method prior to the beginning of the first quarter of the fiscal year ending March 31, 2022.

As a result, net sales decreased by ¥11,450 million, cost of sales decreased by ¥13,178 million, selling, general and administrative expenses decreased by ¥8 million, and operating income, ordinary income, and income before income taxes each increased by ¥1,737 million in the first and second quarters of the fiscal year ending March 31, 2022. Retained earnings at the beginning of the period increased by ¥9,212 million.

Due to the application of the Accounting Standard for Revenue Recognition, "notes and accounts

Asahi Kasei	November 5, 2021
Consolidated Results	2/9

receivable-trade" from the previous fiscal year under current assets in the consolidated balance sheets are included in "notes, accounts receivable-trade, and contract assets" beginning with the first quarter of the fiscal year ending March 31, 2022, while "decrease in notes and accounts receivable-trade" from the first and second quarters of the previous fiscal year under cash flows from operating activities in the consolidated statements of cash flows is included in "decrease in notes, accounts receivable-trade, and contract assets" beginning with the first quarter of the fiscal year ending March 31, 2022. In accordance with Article 89-2 of the Accounting Standard for Revenue Recognition regarding transitional treatment, results for the previous fiscal year and the first and second quarters of the previous fiscal year are not recalculated by the new method.

Application of Accounting Standard for Accounting Standard for Fair Value Measurement, etc.: ASBJ Statement No. 30 "Accounting Standard for Fair Value Measurement" and other standards

are applied from the beginning of the first quarter of the fiscal year ending March 31, 2022. In accordance with Article 19 of the Accounting Standard for Fair Value Measurement and Article 44-2 of ASBJ Statement No. 10 "Accounting Standard for Financial Instruments" regarding transitional treatment, the new accounting policy is to be applied in the future. The effect on the quarterly consolidated financial statements is immaterial.

4.	Notable changes in shareholders' equity: None
5.	Number of shares outstanding
		Q1-Q2 2021	FY 2020
	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	6,475,358	6,396,867
	Average number of shares outstanding during period	1,387,530,651	1,387,512,694*

* Q1-Q2 2020

Asahi Kasei	November 5, 2021
Consolidated Results	3/9

V. Consolidated Financial Statements

1. Balance sheets

			At end of			At end of
			March 2021			September 2021
	Assets
	Current assets
	Cash and deposits	221,779		210,383
	Notes and accounts receivable-trade	338,640			-
	Notes, accounts receivable-trade, and contract assets		-	392,435
	Merchandise and finished goods	203,159		227,340
	Work in process	166,494		133,736
	Raw materials and supplies	111,798		123,147
	Other	97,131		104,682
	Allowance for doubtful accounts	(2,225)		(2,736)
	Total current assets	1,136,776		1,188,987
	Noncurrent assets
	Property, plant and equipment
	Buildings and structures	598,675		615,100
	Accumulated depreciation	(319,144)		(325,150)
	Buildings and structures, net	279,531		289,950
	Machinery, equipment and vehicles	1,535,326		1,591,613
	Accumulated depreciation	(1,286,057)		(1,328,734)
	Machinery, equipment and vehicles, net	249,269		262,879
	Land	70,577		70,125
	Lease assets	8,615		8,493
	Accumulated depreciation	(7,687)		(7,049)
	Lease assets, net	928		1,445
	Construction in progress	84,463		92,613
	Other	182,414		162,508
	Accumulated depreciation	(149,920)		(128,514)
	Other, net	32,495		33,993
	Subtotal	717,262		751,005
	Intangible assets
	Goodwill	351,921		372,666
	Other	342,454		357,356
	Subtotal	694,374		730,023
	Investments and other assets
	Investment securities	286,517		273,915
	Long-term loans receivable	1,241		3,632
	Long-term advance payments-trade	29,390		29,533
	Deferred tax assets	21,116		35,716
	Other	32,709		33,130
	Allowance for doubtful accounts	(445)		(493)
	Subtotal	370,529		375,432
	Total noncurrent assets	1,782,165		1,856,459
	Total assets	2,918,941		3,045,446

Asahi Kasei	November 5, 2021
Consolidated Results	4/9

			At end of			At end of
			March 2021			September 2021
	Liabilities
	Current liabilities
	Notes and accounts payable-trade	142,087		160,580
	Short-term loans payable	144,571		157,015
	Commercial paper	84,000		123,000
	Lease obligations	880		1,530
	Accrued expenses	126,705		128,060
	Income taxes payable	21,268		38,022
	Advances received	78,601		60,833
	Provision for grant of shares	124			-
	Provision for periodic repairs	7,222		1,696
	Provision for product warranties	3,522		3,875
	Provision for removal cost of property, plant and	5,651		5,318
	equipment
	Other	88,533		87,668
	Total current liabilities	703,163		767,598
	Noncurrent liabilities
	Bonds payable	110,000		110,000
	Long-term loans payable	320,404		306,433
	Lease obligations	3,921		6,983
	Deferred tax liabilities	58,669		50,479
	Provision for grant of shares	513		513
	Provision for periodic repairs	3,415		4,455
	Provision for removal cost of property, plant and	12,652		10,927
	equipment
	Net defined benefit liability	158,832		156,992
	Long-term guarantee deposits	21,939		22,256
	Other	30,899		31,522
	Total noncurrent liabilities	721,243		700,560
	Total liabilities	1,424,406		1,468,158
	Net assets
	Shareholders' equity
	Capital stock	103,389		103,389
	Capital surplus	79,641		79,575
	Retained earnings	1,158,792		1,235,329
	Treasury stock	(5,932)		(6,020)
	Total shareholders' equity	1,335,890		1,412,273
	Accumulated other comprehensive income
	Net unrealized gain on other securities	91,887		89,531
	Deferred gains or losses on hedges	(347)		184
	Foreign currency translation adjustment	50,462		56,408
	Remeasurements of defined benefit plans	(10,416)		(9,267)
	Total accumulated other comprehensive income	131,586		136,856
	Non-controlling interests	27,058		28,160
	Total net assets	1,494,535		1,577,289
	Total liabilities and net assets	2,918,941		3,045,446

Asahi Kasei	November 5, 2021
Consolidated Results	5/9