JSR : Management Policy for FY ending March 2021

Management Policy

Eric Johnson CEO

March 26, 2021

Contents

• ■ Summary

• ■ Target profit for FY'24 (Fiscal year March 2025)

• ■ Strategies and Measures to achieve the targets

• ■ Resilient infrastructure

Scope of the presentation

●Focus of this Management Policy

• - Mid term company-wide management vision and goal.

• - Business strategies and numerical targets for Digital Solutions and Life Sciences business, as the core of our business portfolio.

• - Petrochemical businesses (Elastomers and Plastics) are not included in the scope of the presentation. This is because we are currently considering business structural reforms and are not at the stage of presenting the medium- to long-term as of today.

●Structural reform of Petrochemical businesses

- Considering the future business environment, it is necessary to carry out structural reform without limitations.

- We will focus structural reforms on Elastomers initially given relative stability, ROIC, and cash flow generation of Plastics.

• - Measures for profitability improvement include the ERP (early retirement incentive program) announced on March 8, cost reduction including rationalization of raw material and distribution costs, spread improvement by optimization of selling prices. In addition, we have started considering the reorganization of business and product mix.

• - These are not short-term measures but measures necessary to maintain medium- to long-term business sustainability.

• - We will announce any significant progress as soon as it occurs.

Corporate Mission

• ● Continue to deliver unparalleled technology to solve social issue and to enrich society.

  Technological development and the development of JSR are synonymous. Because JSR pursued more advanced technology, it branched out into new fields, and the Group grew in scale from the past.

• ● Maximizing the value of our investments and market position by delivering exceptional quality and customer support.

• ● Aiming to achieve sustainable growth and become truly global company by developing organizational resilience and sustainability.

In a fast-changing world full of unprecedented uncertainties, to develop organizational resilience and sustainability is more important than ever in carrying forward our business activities and increasing corporate value.

Summary of management policy

Vision

● Create value for all stakeholders through sustainable growth ● Strengthen the resilient business structure by responding to changes in the environment

Business Portfolio

Business Target

Structure

Digital Solutions (especially SEMI) and Life Sciences as the center of our business portfolio

more than

ROE

10%

Resilient infrastructure

SEMI

Core OP

Exceed Prior

Peak

more than 600 Oku-yenDigital Solutions &Life Sciences

Innovation

Digitalization ESG commitment Employee engagement

Business portfolio

Business transformation

Focus on DS and LS to drive sustainable growth and new record high OP, exceeding prior peak set in FY2007

2020

1957

2000

2010

Target profit for FY'24

Target：revenue and profit

DS&LS: Revenue > 3,000 Oku-yen, New Record High Core OP

New core business portfolio to exceed prior peak profit

Revenue (Oku-yen)

3,500 3,000 2,500

> 3,000

Oku-yen

Core OP (Oku-yen)

800

-100

2,000

700

600

500

400

1,500 1,000

300

200

100

500

0

0

FY19 FY20 FY21 FY22 FY23 FY24

DS&LSOthers

*CAGR: FY'20 projection vs FY'24 plan **Others：Next generation etc.

FY19 FY20 FY21 FY22 FY23 FY24

DS&LSOthers

> 600

Oku-yen

EBITDA (Oku-yen)

900

> 750

Oku-yen

700

500

300

100

-100

FY19 FY20 FY21 FY22 FY23 FY24

DS&LSOthers

Target：Capital return

ROE: More than 10%

Maximize ROIC for each business segment

ROE

ROIC

12%

10% 8% 6% 4% 2% 0%

*Company-wide target

DSLS

TOTAL (DS&LS&Others)

30%

25%

20%

15%

10%

5%

0%

Elastomers -5%

FY19

FY20

FY21

FY22

FY23

FY24

FY19

FY20

FY21

FY22

FY23

FY24

*LS: Investment capital includes goodwill

Capital allocation

Sources

Operating CF Structural reform Leverage

FY'17-FY'20 Pro.

Uses	CAPEX, M&A Shareholder return

FY'21-FY'24 Plan

Sources

Growth	CAPEX
M&A

1,660 Oku-yen

*ELA 720 Oku-yen

600 Oku-yen

Shareholder

Share Buyback Dividend

650 Oku-yen total return ratio: 68%

2,000 Oku-yen	DS and LS
xxxx Oku-yen	Leverage considering D/E balance

+α Oku-yen

CF from Petro's structural reforms

1,000 Oku-yen	1st priority Focus on SEMI and LS
zzzz Oku-yen

700 Oku-yen

50% shareholder return as a guideline

Strategies and measures to achieve the targets

-DIGITAL SOLUTIONS

-LIFE SCIENCES

Digital Solutions × Life Sciences

Size

Total photoresist market $2Bn

(Semiconductor $430Bn)

Market

Trend

・ Steady growth ・ Technological innovation advances

Size

Total CDMO market $6Bn

(Biologics $350Bn)

Trend

・ High growth ・ Precision medicine fields expand

Social Value

・ Realize a smart society (AI,IOT)

・ Achieve miniaturization and high performance with less power

・ Enhance efficiency of pharmaceutical development ・ Realize personalized medicine tailored to each patient

Strength and Strategy

High market share in advanced materials

(e.g. ArF 30%, Alignment film 50%)

Concentration of resources on SEMI Scale and fields expansion including M&ACapability to support very complex biological drugsBusiness expansion through customer pipelines

Creation of unique added-value

Digital Solutions

• ● Evolve the One-on-One business model by focusing resources on SEMI.

  Pursue the scale of SEMI by expanding customer, products and regional portfolio.

• ● In the Display and Edge Computing, we will ensure profit growth through selection and concentration, while also launching new items and preparing for next generation businesses.

Revenue (Oku-yen)

2,000

Core OP (Oku-yen)

1,800

1,600

1,400

1,200

1,000

800

600

400

200

0

SEMI

500

25%

400

20%

300

200

15%

10%

100

5%

FY20

FY21

FY22

FY23

DisplayEdge Computing

FY24

0

0%FY20

FY21

FY22

FY23

FY24

Digital Solutions：SEMI market

Digital Solutions：SEMI focus

More Moore : Enable Scaling with Transistor Technology

Beyond 3nm Device Architecture

PhotoresistSpin-on Hard Mask

~3nm

Beyond 2nm

• • EUV Photoresist High sensitive

• • Spin-on Organic

• • Spin-on Inorganic

GateGate

Gate

NMOS

PMOS

FinFET

GAA

CFET

26 mJ/cm2

More than Moore : 3D Packaging

Photoresi

Spin-on Inorganic

Spin-on Organic

Substrate

Metal Interconnects : CMP & Cleans

CMP Slurry,

CleansMulti-layer

FY'20 Product Mix (Revenue)

Packaging etc.

Advanced Photoresist

(ArF, EUV)

92 bn yen

Litho Others

Digital Solutions：SEMI projection

• ● SEMI market is expected to grow steadily while related technologies advance.

• ● Double the sales growth of the market by keeping a high market share in ArF and Multi-layer sales expansion and start of full-scale demand of EUV and expansion of Cleans, CMP slurry and Packaging materials.

1,400

[Oku-yen]

Advanced photoresistLitho OthersMulti-layerCMP slurry & Cleans

Packaging & Others

1,200 1,000

800 600 400 200

0

FY19

Packaging & Others

CAGR: +8%

CMP slurry & Cleans

CAGR: +17%

Multi-layer

CAGR: +5%

Litho Others

CAGR: +4%

Advanced photoresist

CAGR: +7%

FY20

FY21

FY22

FY23

FY24

Digital Solutions：SEMI global strategy

We aim to be a global SEMI materials company that continuously contribute to customer value

We invest in technology, quality and capacity

Asia

• :: Japan RD/Manufacturing/Sales

• :: Taiwan RD/Sales

• :: China & Korea Sales

The United States

:: California RD/Manufacturing/Sales :: Oregon New Plant for Cleans

Europe

:: Belgium RD/Manufacturing/Sales

EUV Resist Manufacturing & Qualification Center

Digital Solutions：Display and Edge Computing

• ● Maximize the cash flow of the LCD business through business reorganization, selection and concentration.

• ● Capture the growth of next-generation display devices.

• ● Capture new demand in the fields of high-speed communication, transmission and sensing to expand the top line and create new businesses. Accelerate growth of ARTON NIR (Infrared cut filter) in high end smart phone cameras.

FY'20 Product Mix (Revenue)

Revenue (Oku-yen)

700

600

500

400

300

200

100

0

FY19

Display

• • Maximize cash flow through selection and concentration

Edge Computing

• • Accelerate sales growth of ARTON

FY20

FY21

FY22

FY23

FY24

Digital Solutions：Display projection

• ● By executing biz. reorganization in response to changes in the market and competitive environment, we will focus on growing Chinese market and competitive products, and work on growth areas such as low-temperature package, OLED materials and IOT materials.

• ● Establish a business structure as cash cow with high ROIC in a sustainable manner.

Revenue composition

Fixed Cost (Oku-yen) *FY'19=100%

100% 80%

60% 60%

40% 20% 0%

OLED & New productColor resists, etc.

Alignment layer, Passivation coat

ChinaTaiwanKorea

by Product

by Region

120%

100%

110%

80%

100%

Strengthen product and region concentration

90%

FY20

FY24

40% 20% 0%

80%

70%

Optimize cost structure

60%

FY20

FY24

50%

Cash cow Aiming for gradual profit growth

40%

Japan&Others

FY19

FY20

FY21

FY22

FY23

FY24 *transition of Direct fixed cost

Life Sciences：Market

Demand gets strongerOpportunity gets stronger

* JSR estimated

Biopharmaceutical Market (Bn USD)

Aging societyPersonalized medicineEfficiency improvement of drug development

Life Sciences：JSR's Life Sciences business fields

Faster & lower cost Personalized medicine

Aging society

Support processes from drug discovery to manufacturing of biopharmaceuticals Development of diagnostic agent technology to confirm effectiveness in advance

Life Sciences：Business model of JSR's CDMO

• ● Technology oriented service

Focus on "D" of CDMO

Support difficult to develop molecules, especially, bispecific & Fc-fusion molecules on the mammalian side.

• ● Middle to small size fields

Focus on personalized / precision medicine fields 50

Flexible and agile analytical and manufacturing services.

• ● Fine chemical leveraged

High quality management from nano level experiences from SEMI

Our own purification material (A3) Science from Material informatics

Project Pipeline

200

150

100

50

0

Oct.17

Sep.19

Sep.20

KBI

150

100

0

Dec.17

Dec.19

Sep.20

Selexis

80

60

40

20

0

Mar.17 Mar.19 Sep.20

Bio Process Materials

Life Sciences：Projection

• ● Grow revenue to more than 1,000 Oku-yen at a higher growth rate than the market and achieve more than 20% ROS.

• ● To achieve and further exceed the target, we will accelerate the creation of strategic link among Life Sciences groups along with executing the strategy for each group company.

FY20 Product Mix (Revenue)

Core OP (Oku-yen)

Bio Process materials

CDMO and CRO drive the high topline growth at 20% CAGR

Achieve more than 1,000 Oku-yen sales and 20% OP margin

Aiming for after FY24, strengthen the strategic link among LS groups

Life Sciences：Growth scenario for each sub-segment

Revenue (Oku-yen)

Growth Scenario

➢ CDMO Clinical and manufacturing expansions continuously drive higher growth toward FY24, including a new Geneva site and a NC site (multi-year contract with a customer)

• ➢ CRO In addition to the past high growth which came from oncology services with unique broad PDx model, Crown will continuously develop competitive screening models and expand sales of organoid models.

• ➢ BPM We expect high volume due to our pipeline for late clinical stages in addition to the commercial opportunities that are lining up for the coming years.

• ➢ IVDM/IVD (MBL) Accelerate shift to China and enhance CDx success.

Life Sciences：Vision

• ● Unique Positioning : Support "Bio Therapy development" , " Biomarker to Dx" and "End to End".

• ● Strategic link among JLS group and next generation R&D activities will realize continuous growth beyond FY'24 .

AMSPHERE™ A3

IVD Materials

Resilient infrastructure

• - 5 FOUNDATIONS

• - INNOVATIVE CULTURE

• - DIGITALIZATION

• - ESG TARGET

• - EMPLOYEES' ENGAGEMENT

Value Creation through 5 Foundations

Innovative culture

Open Innovation

JSR BiRD

Incubation

JSR Bioscience and informatics R&D center

• ✓ Biochemistry laboratory for intestinal bacteria

• ✓ Japan's largest gnotobiotic facility

• ✓ Omics Analysis Platform

• ✓ Open Innovation Lab

*plan to begin operation in July 2021,Kawasaki

Digitalization

Transform JSR into an industry leading, digitally-driven company through putting digital into our business. We use our data to enhance business efficiency, improve customer and employee experiences, and create value to stakeholders.

RD Technology and Digital Transformation

Revolutionize R&D methodology, thereby promoting the development of innovative materials and digital transformation. Significant reinforcement of JSR's main product groups is expected, along with promotion of continuous fulfillment of our pipeline to create new businesses.

Develop materials with advanced functions and characteristics in scope to create new businesses and promotion of continuous fulfillment of our new business pipeline.

Understanding the logics of JSR product development which has profound studies and experiences, targeting dramatic of performance to create differentiated product development.

*JSR-UTokyo Collaboration Hub, CURIE

Provide commercialization of microbiome related drugs, breakthrough therapy and new value in drug discovery support by comprehensive analysis of biological information.

JSR Business Contribution to SDGs

Environment

:: CO2 emission :: Circular economy :: Sustainable, resource-efficient supply chain

Better Society

:: Safe work place :: Good work condition :: Innovation and digitalization

Intelligent Lifestyle

:: Expand green business :: Healthy life :: Mobility

Improving ESG Issues

Set KPI target and measures for (ex)

• :: Employee engagement improvement

• :: Rebuild Corp HR system

• :: Re-define HQ functions/roles

Improving ESG Issues

We, JSR Group, aim and challenge for the GHG emission net zero by 2050.

We, JSR group, build the resilient organization in order to correspond various conditions by utilizing the TCFD scenario analytics.

Improving Employee engagement

JSR Sustainability Vision: Employees

JSR embraces diversity and inclusion. We aim to enable all employees to reach their full potential. We will evolve to ensure we meet the changing needs of our employees.

We will aim to strengthen competitiveness of our employees and organizations through maximizing employees' engagement.

JSR is changing to the Global company.

2010	2020
Global Employees	5,212	9,050
Affiliated Companies	34	75
Business Regions	9	16

✓ Opportunity to listen to the all

employee's voice and opinion.

✓ To identify issues and countermeasures among employees who have different back ground.

Summary

Create value for all stakeholders through sustainable growth

Strengthen the resilient business structure by responding to changes in the environment

Improve Capital Efficiency

Establish Core Business

Resilient Infrastructure

Enhancement of Corporate Value

* The forecasts, future plans and strategies made in this document contain a variety of uncertain factors, since it has been prepared based on judgments from currently available information. Actual business results may differ from those projected, depending on factors such as the economic status of the market surrounding the company.