JSR : Minutes

Conference call on April 25, 2022 to explain Business Results for

FY21Q4 Summary of Explanations

[Note]

Please refer to data available at:https://ssl4.eir-parts.net/doc/4185/ir_material_for_fiscal_ym4/116643/00.pdf

P1 Management Policy

・Our core businesses are Digital Solutions business (especially Semiconductor materials) and Life Sciences business. In FY24, we will achieve historical high OP of 60 billion yen, ROE of 10% or more, and ROIC maximization.

・ In the individual businesses, we will expand top-line significantly, and maintain high profit margins in

Semiconductor materials. In Life Sciences business, we will continue to grow to achieve sales of over 100 billion yen and ROS of 20% in FY24.

・Based on these targets, we plan to make steady progress toward FY24.

・We plan to have a management policy briefing to update the progress on May 24, 2022.

P2.Summary

(Overall)

・ FY21 cumulative results showed an significant increase in both sales and OP YoY. Toward FY22,

Semiconductor materials and Life Science business are expected to drive growth.

・Compared to the projection revised upward on November 8, 2021, Sales of FY21 was almost in line, but OP underperformed. It was due to a profit decline in FY21Q4. This was mainly due to an impairment loss of 3.8 billion yen on a cleans facility in the US, accounted for in FY21Q4. In addition, the Display materials, Plastics business, and Life Sciences businesses underperforming the projection impacted the overall profit.

(Digital Solutions Business)

・In FY21, the Semiconductor materials business achieved + 16% sales growth YoY and led profit growth. EUV resists grew in addition to existing products. The EUV resist sales, including metal resist by acquiring Inpria, increased +90% YoY.

・The cleans facility in the US was established to enter the market with the aim of expanding our business portfolio. Although it started sales to major customers at the end of FY20, the start-up was delayed compared to the initial forecast. As a result of carrying out an impairment test with our facility as cash-generating unit, it was judged to be impaired due to the delay in the collection of cash flows. The impairment losses include 3.2 billion yen for fixed assets and 0.6 billion yen for raw materials that are not expected to be sold. Although the start-up was delayed, the evaluation for the next adoption by a customer is progressing. We plan it to make profit early with cost minimization. In the future, we will promote adoption in next-generation logic products and horizontal expansion to other companies in the US. As for the cleans business itself, we plan to expand our business in the growing market, Asia, by leveraging adoptions in the US. We also utilize our newly established local subsidiary in Taiwan for Semiconductor materials to promote growth in the future.

・As for Display materials, panel manufacturers adjusted their operations due to the deterioration of the panel market in FY21H2. The closure of the Taiwan plant was completed at the end of March 2022. At the same time, we shifted resources to China. Sales of our focused products to China will continue to increase, pavingthe way for stable growth.

・Demand for Semiconductor materials is expected to remain strong in FY22. For FY22, sales growth of + 17% is expected with expansion of advanced products such as EUV. We'll make efforts to grow EUV further including integration synergies with Inpria and to expand our shares in Asian market.

(Life Science Business)

・Sales growth achieved + 31% YoY. In particular, CRO has achieved YoY growth of more than 40% by the expansion of advanced cancer screening services with PDx models.

・CDMO also achieved strong growth of + 25% YoY, but OP resulted in a decline YoY partly due to an increase in upfront costs for the start-up of new plants in the US and Europe as well as the capacity expansion of existing facilities. In FY21Q4, there were costs incurred for engineering run of a new facility in North Carolina and loss on disposal. The engineering run started at the end of January 2022. The ribbon-cutting was held on April 20, 2022, and preparations for commercial production are in progress. The new facility in North Carolina is planned to start sales in the late FY22Q1, and the commercial production expansion will advance in FY22H2. It is expected to significantly contribute to the improvement of the business performance in FY22.

・As will be described later, FY22 projection includes the sales effect of MBL antigen test kits for COVID-19. (Others)

・The transfer of the Elastomer business to ENEOS Corporation closed on April 1, 2022 as scheduled. It was a very complicated process, as it was the separation of our company's founding businesses and involved the separation of the one factory site in the industrial complex, but the closing was achieved with the cooperation of all stakeholders. The Elastomer business, which started as ENEOS Materials Corporation, and the new JSR will move forward each other.

・As for the new JSR, this is not the end of the restructuring and will continue to evolve to achieve the vision set out in the management policy.

・We announced today for share buybacks of up to 30 billion yen. In accordance with our capital allocation policy, we decided to implement the plan at this timing in order to prioritize business investment, maintain a strong financial position, and emphasize shareholder returns. The capital allocation policy will remain unchanged.

P3 Summary 1 - FY21 Result vs Projection ・Comparison of FY21 results and projections.

・Sales and profits, excluding the bottom line, were under the projection.

・In the Digital Solutions business, sales were almost in line with the projection. 3.8 billion yen impairment loss at the cleans facility was the main reason for the profit shortfall. Also, the profits of the Display materials and Edge Computing didn't achieve the projection.

・In the Life Sciences business, sales progressed as planned. CRO and IVD resulted in exceeding the top line plan. On the other hand, CDMO's sales didn't achieve the plan. Upfront investments also led to underperforming the profit target.

・The Plastics business did not meet its projection due to a slowdown in demand in FY21H2.

・ A breakdown of Semiconductor materials is explained on the Appendix because core OP includes the valuation gain from the acquisition of Inpria and the impairment loss of the cleans facility.

P4 Summary 2

・YoY and QoQ for each business.

・Both sales and profits increased YoY.

・Sales and profit decreased QoQ.

・Sales of the Digital Solutions business grew + 9% YoY. Sales of Semiconductor materials increased significantly to + 16% YoY.

・Sales of the Life Sciences business grew + 31% YoY. On the other hand, profit decreased due to a profit decline with CDMO's upfront investment.

・The sales volume of the Plastics business increased mainly with the recovery of the automobile industry.

・For QoQ, sales and profit decreased in each segment. The Digital Solutions result had the impact of the

FY21Q3 and FY21Q4 valuation gain and losse as well as the difference in expenses incurred. Profit in the Life Sciences decreased due to the impact from the decline in sales and profit of CDMO. Sales volume of the Plastics business did not increase due to production adjustments for automobiles. Also, profit decreased due to accounting factors.

P5 Full Year Forecast

・The current environment and projections of each business.

・Semiconductor materials is projected to grow + 17% YoY for FY22. We plan to achieve growth similar to that

of FY21. The input area of silicon wafers is expected to increase from over 10% in FY21 to 4-7% in FY22. Its high growth is expected to continue even though the growth rate will slow down. In addition, the semiconductor material market is expected to grow more than the wafer market by the extension of the semiconductor field and the complication of the process. Our strength lies in having a broad range of products, from leading-edge to so-called legacy products, and will continue strong sales growth. The advanced EUV is expected to be + 45% YoY due to the expansion of applications in advanced logic manufacturers. This includes expanding to trial manufactures of next generation metal resist.

・Sales of the US cleans facility, which was accounted for impairment loss, was delayed one to two years later

than initially expected. The production for products already adopted by customers is stable and expected to have flat sales YoY. The evaluation for the next adoption by customers will be progressed, and the recovery will be made for FY23.

・Display materials are affected by the operation adjustment of the customer industry in FY21H2 with the

deterioration of the panel market. Although the situation is unlikely to worsen further, it is expected that the operation adjustment will continue for the time being. We restructured its operations in response to structural changes in the industry. The Taiwan Plant was completely closed at the end of FY21, strengthen activities in the growing market, China. Along with expanding the market share of alignment films and passivation coats, we continue to expand new FPD (Flat Panel Display) materials. In addition to responding flexibly to the adjustment of customer operations, our business has the solid foundation for securing stable profit in the mid-term.

・For Edge Computing, we continue to make efforts for new adoptions of NIR by customers. Some new adoptions in Asia are already expected.

・The growth trend in the Life Sciences business remains unchanged. The customer pipelines continue to grow by more than 20% annually. CDMO (KBI) conducted the engineering run at its new facility in North Carolina

in FY21Q4, and held a ribbon-cutting on April 20, 2022. The final evaluation of the products is planned in May 2022, and sales are expected to come in from FY22Q1. At the same time, a new facility in Geneva is expected to start sales in summer of 2022. Although KBI has experienced a slowdown in profits in FY21Q4, we will proceed cautiously with the start-up of new facilities in early half of FY22. Then, it is planned to face an inflection point in profitability with the expansion of commercial production toward FY22Q2 and Q3. KBI's business model handles very complex antibodies and proteins. Therefore, there have been some difficulties in operations such as issues with SCMs and the burden of upfront investment, but we are also promoting projects to improve the productivity and profitability of the entire company. The customer pipelines are expanding and demand is very strong. Through these synergies, we will achieve a significant improvement in sales growth and margins in FY22. In addition, MBL handles sales of antigen test kits for COVID-19, which are factored into this FY22's sales and profit.

・Production of the Plastics business is expected to recover throughout FY22. The increase in raw material prices is passed on by the sales price formula. At the same time, we plan to grow profits by expanding sales of high value-added products and improving profitability.

・In addition to next-generation R&D expenses, other adjustments include one-time expenses related to the launch of the new ERP, which was introduced at the same time as the separation of the Elastomer business, and a sales decrease from trading companies and other businesses included in the Elastomer business transfer.

・Exchange rate of FY22 projection is based on FY21Q4 results as stated in the Note. As the yen has weakened recently, we plan to revise it accordingly. Based on our current calculation , 1 yen depreciation would theoretically increase our company's profits by about 0.5 billion yen.

P6 Segment Data : Digital Solutions business

YoY

・Sales and profit increased.

・Sales of Semiconductor materials increased significantly to + 16% YoY as mentioned above.

・Sales of Display materials decreased. Sales decreased as planned due to withdrawal from local productions in South Korea and Taiwan for business restructuring. In FY21H2, there was the impact from the operation adjustment of panel manufactures.

・The increase in profit includes the sales increase of Semiconductor materials and valuation factors . Analysis of the impact is stated in Appendix. Other expenses include an increase in fixed expenses related to R&D and manufacturing of Semiconductor materials, one-time expenses related to business restructuring for Display materials, and an increase in depreciation due to the start of a production facility for Edge Computing.

QoQ

・Sales and profit declined.

・Demand for Semiconductor materials is strong despite a sales decline mostly due to timing differences of shipments. The production of cleans in the US facility once expanded in FY213Q, but turned to decrease. ・Display materials result was flat QoQ, affected by the operation adjustment of the customer industry.

・Core OP decreased significantly due to the Inpria's valuation gains incurred in FY21Q3 and the impairment loss of cleans. Loss on disposal of Displays due to closure of Taiwan plant is also recorded.

P8 Segment Data : Life Sciences business YoY

・Significant increase in sales and profits. Sales increased significantly in each sub-segment.

・In each sub-segment, CDMO's profit decreased due to an increase in upfront investment costs. As a result, overall profit declined.

QoQ

・Sales and profits decreased.

・CDMO sales fall QoQ. Sales and profits declined due to delayed sales in the following fiscal year from

production delays, although some seasonal factors were included. Also, profit decreased due to the one-time costs of engineering run at a new facility in North Carolina and loss on disposal. As a result, the overall business resulted in a loss for FY21Q4.

P9 Segment Data : Plastics business YoY

・Both sales and core OP increased. Sales increased due to the recovery of the automobile market.

QoQ

・There wasn't enough recovery from the automobile production cut. Core OP decreased. However, most of them are related to the inventory effect due to regular repair.

P 10 Capital Allocation Policy

・Net Cash for the continuing business at the end of March 2022 was -72.3 billion yen. The NetDE ratio is 0.17.

Closing of an agreement on the Elastomer Business Transfer was completed on April 1, 2022 and the assets and liabilities related to disposal group classified as held for sale will be removed from the balance sheet as of April 1, 2022. In addition, although details cannot be provided due to the contract, we received proceeds from the transfer with the closing.

・As stated at the beginning, we announced today for share buybacks up to total 30 billion yen and/or up to 10 million shares.

・Including these, our stable finance position is maintained and we see no issues with execution of the basic policy of capital allocation.

P11 Appendix

・In the Digital Solutions business, 6 billion yen of profit was factored into the projection announced on

November 8, 2021, as a result of the 100% acquisition of Inpria. Of this amount, 7.5 billion yen was a one-time valuation gain of existing holdings prior to the 100% acquisition. -1.5 billion yen includes profits and losses from the consolidation after November 2021 and the amortization of intangible assets by PPA. As a result of PPA, losses from the consolidation decreased to -1 billion yen from -1.5 billion yen. An impairment loss on a US cleans facility, which was not included in the projection announced on November 8, 2021, occurred in FY21Q4. Core OP for FY22 is projected at 43 billion yen. On a comparative basis, excluding the aforementioned valuation gains, profits increase by 22%. Core OP margin is 23%, which is the target of our