Daicel : Consolidated Financial Results for the Year Ended March 31, 2021

Consolidated Financial Results for the Year Ended March 31, 2021

(All financial information has been prepared in accordance with Generally Accepted Accounting Principles in Japan)

May 12, 2021

Company name	: DAICEL CORPORATION
Stock Exchange on which the shares are listed	: Tokyo Stock Exchange in Japan
Code number	: 4202
URL	: https://www.daicel.com
Representative	: Yoshimi Ogawa, President and CEO
Contact person	: Masahiko Hirokawa, General Manager-Investor Relations & Corporate Communications
	Phone [phone]
Scheduled date of the general meeting of shareholders	: June 25, 2021
Scheduled date for submitting financial statements	: June 28, 2021
Scheduled date for dividend payment	: June 28, 2021
The additional materials of the Financial Results	: Yes
The briefing session of the Financial Results	: Yes (for institutional investors and analysts)

1. Consolidated Financial Results for the Year Ended March 31, 2021		(Amounts are rounded down to the nearest million)
(1) Consolidated Operating Results							(% of change from previous year)
	Net sales		Operating profit		Ordinary profit		Profit attributable
				to owners of parent
	Millions of Yen	%	Millions of Yen		%	Millions of Yen		%	Millions of Yen	%
Year ended Mar. 31, 2021	393,568	(4.7)	31,723		7.0	34,683		9.1	19,713	296.0
Year ended Mar. 31, 2020	412,826	(11.2)	29,644		(42.1)	31,781		(40.5)	4,978	(85.9)

(Note) Comprehensive income: 45,214 millions of yen [1,865.9%] for the Year ended March 31, 2021 and	2,299millions of yen [(94.1%)] for the
Year ended March 31, 2020
		Profit per share	Diluted profit	Return on equity		Ordinary profit	Operating profit
		per share		to total assets	to net sales
		Yen	Yen	%		%	%
Year ended Mar. 31, 2021		65.18	-	6.6		5.6	8.1
Year ended Mar. 31, 2020		15.49	-	1.3		5.1	7.2

(Reference) Share of profit of entities accounted for using equity method: 1,785 millions of yen for the Year ended March 31, 2021 and 1,772 millions of yen for the Year ended March 31, 2020

(2) Consolidated Financial Position

	Total assets	Net assets	Capital adequacy ratio	Net assets per share
	Millions of Yen	Millions of Yen	%	Yen
Year ended Mar. 31, 2021	640,385	245,000	37.1	789.34
Year ended Mar. 31, 2020	597,992	392,583	60.6	1,166.56
(Reference) Shareholders' equity:237,852 millions of yen as of March 31, 2021 and 362,545 millions of yen as of March 31, 2020

(3) Consolidated Cash Flows

	Cash flows from	Cash flows from	Cash flows from	Cash and cash equivalents
	operating activities	investing activities	financing activities	at the end of year
	Millions of Yen	Millions of Yen	Millions of Yen	Millions of Yen
Year ended Mar. 31, 2021	57,869	(34,220)	(17,050)	90,747
Year ended Mar. 31, 2020	57,193	(45,864)	(47,883)	80,674

2. Dividends

		Cash dividends per share		Dividends in	Dividend	Dividends to
			payout ratio	net assets
						total
						(Consolidated	(Consolidated
(Reference data)	1st quarter	2ｎd quarter	3rd quarter	4th quarter	Annual	(Annual)
basis)	basis)
	Yen	Yen	Yen	Yen	Yen	Millions of Yen	%	%
Year ended Mar. 31, 2020	-	16.00	-	18.00	34.00	10,754	219.5	2.9
Year ended Mar. 31, 2021	-	16.00	-	16.00	32.00	9,642	49.1	3.3
Year ending Mar. 31, 2022	-	16.00	-	16.00	32.00		43.8
(Forecast)

(Note) Breakdown of the year-end dividend for the Year ended March 31, 2020: ordinary dividend 16.00 yen and commemorative dividend 2.00 yen (100th-anniversary commemoration)

*Notes

(1) Changes in significant subsidiaries during the Year ended Mar. 31, 2021: Not applicable (Note) Changes in specified subsidiaries that caused a change in the scope of consolidation

(2) Changes in accounting policies, changes in accounting estimates and restatements

ⅰ Changes in accounting policies due to revisions of accounting standards: Not applicable

ⅱ Changes in accounting policies other than (2)-i:Not applicable

ⅲ Changes in accounting estimates: Not applicable

ⅳ Retrospective restatements: Not applicable

(3) Number of shares issued (common share)

Net sales

Ordinary profit

Operating profit

(% of change from same period of previous year)

Profit attributable Profit

to owners of parent per share

Millions of Yen % Millions of Yen % Millions of Yen % Millions of Yen % Yen

Six months ending Sep. 30, 2021 207,000 - 14,000 - 15,000 - 11,000 - 36.50

Year ending Mar. 31, 2022 420,000 - 27,000 - 29,000 - 22,000 - 73.01

(Note) The percentage changes from the previous year are not listed as the above forecast of consolidated financial results are after the adoption of the ASBJ Guidance No. 29 "Accounting Standard for Revenue Recognition" which will be applied from the beginning of the fiscal year ending March 31, 2022.

3. Forecast of Consolidated Financial Results for the Year Ending March 31, 2022

ⅰ Number of shares issued at the end of each period	As of Mar. 31, 2021	302,942,682 shares	As of Mar. 31, 2020	315,942,682 shares
(Including treasury shares)
ⅱ Number of treasury shares at the end of each period	As of Mar. 31, 2021	1,609,633 shares	As of Mar. 31, 2020	5,160,966 shares
ⅲ Average number of shares during the each period	Year ended	302,448,286 shares	Year ended	321,385,570 shares
(Cumulative from the beginning of the fiscal year)	Mar. 31, 2021	Mar. 31, 2020

(Reference) Overview of the Unconsolidated Financial Results
Unconsolidated Financial Results for the Year Ended March 31, 2021		(Amounts are rounded down to the nearest million)
(1) Unconsolidated Operating Results							(% of change from previous year)
	Net sales		Operating profit		Ordinary profit		Profit
	Millions of Yen	%	Millions of Yen		%	Millions of Yen		%	Millions of Yen	%
Year ended Mar. 31, 2021	194,371	(4.4)	4,781		47.5	26,319		67.5	23,190	181.7
Year ended Mar. 31, 2020	203,228	(12.9)	3,240		(74.1)	15,714		(36.8)	8,231	(54.4)
	Profit per share	Diluted profit
	per share
		Yen			Yen
Year ended Mar. 31, 2021		76.68			-
Year ended Mar. 31, 2020		25.61			-
(2) Unconsolidated Financial Position
	Total assets	Net assets		Capital adequacy ratio	Net assets per share
	Millions of Yen	Millions of Yen			%		Yen
Year ended Mar. 31, 2021		599,050	265,492			44.3		881.06
Year ended Mar. 31, 2020		399,142	251,324			63.0		808.68

(Reference) Shareholders' equity: 265,492 millions of yen as of March 31, 2021 and 251,324 millions of yen as of March 31, 2020

*This Financial Results report is not subject to audit.

*Explanations or other special matters to appropriate use of the forecast of consolidated financial results

The forecast of consolidated financial results and certain other statements contained in this document are forward-looking statements, which are rationally determined based on information currently available to the company. For a variety of reasons, actual performance may differ substantially from these projections.

4. Overview of the operating results

1. Overview of the operating results for the quarter under review
   Looking at the world trends during the fiscal year ended March 2021, although economic stagnation caused by the

spread of COVID-19 has been recovering in some points, the global economy remained uncertain due to the shortage of semiconductors and the cold wave in North America toward the end of the fiscal year.

Amid such circumstances, our business was affected by sluggish demand in various industries in the first half of the fiscal year. However, the Group has steadily seized sales opportunities due to the recovery of automobile production demand, worked hard to reduce cost, and recovered its business performance over the period. In the consolidated fiscal year, these factors have resulted in lower revenue but higher profit compared to the previous fiscal year.

As a result, sales revenue for the consolidated fiscal year under review totaled 393,568 million (down 4.7% year-on-year). On the income front, operating income amounted to 31,723 (up 7.0% year-on-year), ordinary income was 34,683 (up 9.1% year-on-year), and net income attributable to owners of the parent was 19,713 (up 296.0% year-on-year) due mainly to Polyplastics becoming a wholly owned subsidiary of Daicel.

				(Unit: Million Yen)
	Net Sales	Operating Income	Ordinary Income	Net income
				attributable to
				owners of parent
Year ended March 31, 2021	393,568	31,723	34,683	19,713
Year ended March 31, 2020	412,826	29,644	31,781	4,978
Change from previous year	-19,258	2,079	2,902	14,735
% of change	-4.7	7.0	9.1	296.0

Capital investment for the fiscal year under review

(Unit: Million Yen)

	Capital investment	Depreciation and			Foreign
		R&D	exchange
				amortization
	Tangible	Intangibl	Total	Tangible	Intangibl	Total		(USD/JPY)
		e			e
Year ended March 31,	37,538	2,016	39,555	23,768	2,062	25,830	19,540	106
2021
Year ended March 31,	45,458	2,109	47,568	27,022	1,979	29,002	21,295	109
2020
Change from previous	-7,920	-93	-8,013	-3,254	82	-3,171	-1,755	-
year
% of change	-17.4	-4.4	-16.9	-12.0	4.2	-10.9	-8.2	-

Note: Depreciation and amortization do not include amortization of goodwill.

Segment information is summarized as follows.

We have changed the segmentation reporting as of the current consolidated fiscal year.

[Medical / Healthcare]

Although the sales volume of cosmetic ingredients increased under the influence of demand recovery in China, the healthcare business decreased in sales revenue due to market decline resulting from a drop in domestic demand.

The chiral separation business increased in sales revenue due to strong sales in China and India, and increased sales volume of optical resolution columns.

The overall segment sales came to ¥16,209 million (up 7.4% year-on-year). Operating income amounted to ¥1,561 million (up 16.6% year-on-year) due to an increase in sales volume.

［Smart］

Although sales volume of high-performance films for automobiles increased, sales volume of cellulose acetate for optical films decreased due to decline in demand for display applications. As a result, the display business posted a decline in sales revenue.

The IC/Semiconductor business, such as solvents for printed electronics and resist materials registered growth in sales revenue due to steady demand in the semiconductor market, resulting in higher sales.

The overall segment sales fell to ¥24,701 million (down 2.6% year-on-year). Operating income amounted to ¥3,412 million (up 1.9% year-on-year), due to a price decline of raw materials and fuel cost.

[Safety]

The automobile airbag inflator (gas-generating device) and other mobility business were affected by a decrease in automobile production volume in the first half. However, we increased our sales volume reflecting the recovery of automobile production volume in the second half, and our annual sales volume had a slight decrease. Including the impact of exchange rate fluctuation, the business posted a decrease in sales revenue.

Consequently, overall segment sales came to ¥67,218 million (down 10.1% year-on-year). Operating income also dropped to ¥2,231 million (down 32.4% year-on-year) due to a utilization rate decline from a decrease in sales volume in the first half.

[Materials]

The market conditions for acetic acid improved, reflecting a recovery in demand in the second half of the fiscal year. Although this increase in demand raised the sales volume, the sales revenue posted a decrease due to a downward trend in the market in the first half.

Sales volume of acetic acid derivatives increased due to increase in demand for some products, and the selling price also appreciated in the second half, reflecting an upward trend in the market. Even though, sales revenue fell due to declining market conditions in the first half.

Acetate tow sales volume was flat, but sales declined due to lower selling prices under the influence of exchange rates.

Although demand recovered for some applications, Caprolactone derivatives and alicyclic-epoxy-resin posted a decline due to a decrease in sales volume resulting from the continuously low demand in the European and American markets in the first half.

Consequently, overall segment sales fell to ¥104,203 million (down 4.7 % year-on-year). Operating income amounted to ¥17,921 million (up 13.3% year-on-year), due to cost reductions, lower raw material and fuel prices, and other factors.

[Engineering Plastics]

In the engineering plastics business, such as polyacetal (POM), Polybutylene terephthalate (PBT) resin and liquid crystal polymers (LCP), the demand for automobiles and smartphones decreased significantly in the first half. Although it recovered in the second half and the sales volume increased, the sales decreased due to the effect of decline in demand in the first half.

The plastic compound business, centering on ABS resin and engineering plastic alloy resin, also decreased in sales revenue resulting from the decrease in demand due to recession.

As for the plastic processing business, including molded containers and films, sales decreased due to the slowdown of sales revenue in packaging film and other factors.

Consequently, overall segment sales amounted to ¥168,556 million (down 4.3% year-on-year). Operating income was ¥21,172 million (up 1.3% year-on-year) due to a decrease in raw material and fuel price and other factors.

[Other Businesses]

Sales revenue of other businesses increased due to higher sales volume of defense-related business. Consequently, overall segment sales increased to 12,679 (up 4.9% year-on-year). Operating income amounted to

1,482 (up 82.1% year-on-year).

(2) Overview of financial position for the fiscal year under review

Total assets as of March 31, 2021 were 640,385 million, an increase of 42,393 million from March 31, 2020, due primarily to increases in notes and accounts receivable, property, plant and equipment despite a decrease in inventory.

Total liabilities were 395,384 million, an increase of 189,976 million from March 31, 2020, due primarily to an increase in bonds payable and short-term loans payable.

Total net assets were 245,000 million. Total shareholders' equity, which is calculated as the net assets minus non-controlling interests, was 237,852 million. Shareholders' equity ratio was 37.1%.