Sekisui Chemical : Summary of Consolidated Financial Results for the First Quarter of Fiscal Year 2022 Ending March 31, 2023

Ordinary Profit

Summary of Consolidated Financial Results for the First Quarter of Fiscal Year 2022 Ending March 31, 2023

			July 28, 2022
Company Name:	SEKISUI CHEMICAL CO., LTD.	Stock Listings: Tokyo Stock Exchange
Code Number:	4204	URL https://www.sekisuichemical.com
Representative Director:	Mr. Keita Kato, President
Inquiries:	Mr. Futoshi Kamiwaki, Senior Managing Executive Officer	TEL: [phone]

Scheduled date for submission of quarterly financial statement: August 8, 2022	Scheduled date for payment of dividends:	－
Quarterly earnings supplementary explanatory documents: Yes
Quarterly earnings results briefing:		Yes
							(Figures rounded down to the nearest million yen)
1. Consolidated Business Results for the First Quarter of Fiscal Year 2022 (April 1, 2022 to June 30, 2022)
	(1) Consolidated Business Results				(% figures represent changes from the same period of the previous year.)
		Net Sales		Operating Profit		Ordinary Profit		Profit Attributable to
					Owners of the Parent
		Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
	FY2022 (First 3 months)	282,271	13.5		13,844	24.5	21,361	63.7	14,578	16.3
	FY2021 (First 3 months)	248,596	15.8		11,120	650.7	13,051	－	12,533	－

Note. Comprehensive Income:FY2022 (First 3 months):

31,398 million yen

(271.6%)

FY2021 (First 3 months):8,450 million yen

(-28.7%)

Profit Attributable

Profit Attributable

to Owners of the Parent

to Owners of the Parent

per Share

per Share (Diluted)

yen

yen

FY2022 (First 3 months)

33.08

－

FY2021 (First 3 months)

28.02

－

(2) Consolidated Financial Position

Total Assets

Net Assets

Equity to Total Assets

Millions of yen

Millions of yen

%

1st Q of FY2022

1,200,380

707,133

56.6

FY2021

1,198,921

702,753

56.3

(Reference)

Equity:

1st Q of FY2022:

679,464 million yen,

FY2021:

674,636 million yen

Equity: Shareholders' Equity including Accumulated Other Comprehensive Income

2. Dividend Status

Dividend per Share

(Date of Record)

At the end

At the end

At the end

Year-end

Full year

of 1st Q

of 2nd Q

of 3rd Q

yen

yen

yen

yen

yen

FY2021

－

24.00

－

25.00

49.00

FY2022

－

FY2022 (outlook)

26.00

－

27.00

53.00

Note. Recent revision of dividend estimates: No

3. Consolidated Outlook for FY2022 (April 1, 2022 to March 31, 2023)

(% figures represent changes from the same period of the previous year.)

Profit Attributable to

Profit

Attributable to

Net Sales Operating ProfitOwners of the Parent Owners of the

Parent per

Share

	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	yen
Mid-Term	613,300	11.9	39,000	9.8	46,000	12.3	31,000	－	71.08
Full Year	1,260,700	8.9	100,000	12.5	105,000	8.2	70,000	88.8	160.50

Note. Recent revision of consolidated earnings estimates: Yes

Notes:

1. Significant change of subsidiary companies during the term
   (change of specified subsidiaries that affected the scope of consolidated reporting): No
2. Application of special methods for quarterly consolidated financial statements: Yes
   Note: For further details please refer to "(4) Notes to Consolidated Financial Statements (Application of special accounting methods for the preparation of quarterly consolidated financial statements)" on page 9 of the attached document "2. Consolidated Financial Statement and Notes."
3. Changes to the accounting policy, changes or restatements of the accounting estimates

a)	Changes caused by revisions to accounting principles	: No
b)	Changes other than a)	: No
c)	Amendments to accounting estimates	: No
d)	Restatements	: No
(4) Number of shares outstanding (common stock)
a)	Number of shares outstanding at the end of term		1st Q of FY2022	463,507,285	FY2021	471,507,285
	(including treasury shares):
b)	Treasury shares at the end of term:		1st Q of FY2022	27,358,850	FY2021	27,431,111
	Average outstanding shares in the period
c)		1st Q of FY2022	440,692,090	1st Q of FY2021	447,357,504
	(quarterly consolidated cumulative total):

Note: Execution chart for audit procedures

The Financial Instruments and Exchange Law does not require this brief announcement of the most recent financial statements to be subject to audit review.

Note: Remarks on appropriate use of forecasted results of operation and other special matters

1. This report contains revisions to the consolidated forecasts for the fiscal year announced on April 27, 2022.
2. The earnings forecasts and other forward-looking statements presented in this report are based on information available at the time of its issue and on certain assumptions that the Company considers reasonable. Forward-looking statements in no capacity represent a guarantee that the Company will achieve the stated amounts. Various factors can cause actual results to differ materially from the forecasts. For important matters regarding the conditions associated with the assumptions of these forecasts and their appropriate use, please see "2. Revision to the consolidated results forecast and other forward-looking information" on page 3 of the Quarterly Financial Report (Supplementary Material).

SEKISUI CHEMICAL (4204) Summary of Consolidated Financial Results for the First Quarter of Fiscal Year 2022 Ending March 31, 2023

I. Qualitative Information and Financial Review

1. Consolidated Business Results

1. Group Overview

Net Sales: 282.2 billion yen (+13.5%), Operating Profit: 13.8 billion yen (+24.5%),

Ordinary Profit: 21.3 billion yen (+63.7%), Profit Attributable to Owners of Parent: 14.5 billion yen (+16.3%)

In the first quarter of fiscal 2022, the automobile market was weaker than expected due in part to the reduced production resulting from parts shortages. On the other hand, a certain level of recovery from the impact of COVID-19 was seen in the markets for semiconductor-related products, housing, and building materials. Along with expanded sales of high added value products, due to the weakening of the yen, sales increased substantially.

Although the surge in the prices of raw materials, fuel, and parts continued longer than expected, efforts such as the improvement of selling prices, the expansion of sales of high added value products, and cost cutting led to a substantial increase in operating profit in all of our business segments.

Ordinary profit and profit attributable to owners of parent increased significantly due in part to the effects of foreign exchange rates.

1. Overview by Business Segment [Housing Company]
   Net Sales: 115.6 billion yen (+9.6%), Operating Profit: 2.8 billion yen (+132.8%)
   In the first quarter of fiscal 2022, despite the surge in parts prices and effects from delivery delays, both sales and profit increased due to factors such as firm orders for housing and renovation business, effects from the leveling of sales, and growth in the Real Estate business and the Town and Community Development business.
   With regard to orders, the Housing business saw firm trends in subdivision and ready-built houses, and the number of orders was on a par with the level for the same period of the previous year. In the Housing Renovation business, orders were up year-on-year due to the expanded sales of storage batteries and other products.
   In terms of measures, amid increasing energy concerns against the backdrop of geopolitical and other factors, we promoted smart and resilient products in the Housing, Housing Renovation, and Town and Community Development businesses. In the Housing business, in addition to strengthening Web marketing that utilizes our own websites, we continued to focus on expanding sales of subdivision and ready-built houses, whose demand remained firm. In the Housing Renovation business, we strived to expand periodic diagnoses and strengthen our proposal skills.

[Urban Infrastructure and Environmental Products Company]

Net Sales: 48.9 billion yen (+10.9%), Operating Profit: 1.4 billion yen (+279.9%)

In the first quarter of fiscal 2022, effects from the surge in raw material prices remained. Nevertheless, sales increased thanks to the completion of delayed projects that continued from the previous fiscal year as well as improved selling prices, with operating profit reaching a record high.

In the Piping and Infrastructure field, net sales were up year-on-year thanks to firm demand for detached houses and demand associated with capital investment in plants (semiconductors) in Japan and overseas.

In the Building and Living Environment field, net sales increased year-on-year due to recovery trends in demand for detached houses, condominiums, and renovation.

In the Advanced Materials field, while synthetic lumber was affected by delays in projects for railway sleepers, demand for thermoplastic sheets recovered in the aircraft industry and their medical applications also expanded,

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SEKISUI CHEMICAL (4204) Summary of Consolidated Financial Results for the First Quarter of Fiscal Year 2022 Ending March 31, 2023

resulting in higher net sales than in the same period of the previous year.

[High Performance Plastics Company]

Net Sales: 100.3 billion yen (+19.7%), Operating Profit: 10.9 billion yen (+4.9%)

In the first quarter of fiscal 2022, despite the impact of reduced automobile production resulting mainly from the lockdown in China due to COVID-19 and the situation in Ukraine, sales increased due to firm demand for semiconductors and building materials, as well as the effects of foreign exchange rates. Moreover, although the marked increase in the prices of raw materials and fuel has continued, we secured increase in profit thanks to the improvement of selling prices, the expansion of sales of high-performance products, and reduced costs.

In the Electronics field, sales of semiconductor-related products were firm, resulting in a year-on-year increase in net sales.

In the Mobility field, the automobile market stagnated due to the effects of COVID-19 and parts supply shortages in Europe and Japan. Nevertheless, net sales were higher than in the same period of the previous year thanks to growth in sales of high-performance products, especially interlayer films for heads-up displays.

In the Buildings and Infrastructure Materials field, demand for chlorinated polyvinyl chloride (CPVC) was firm, especially in India, and the market for fire protection materials and non-combustible materials used in homes in Japan also recovered. As a result, net sales were up year-on-year.

[Medical Business]

Net Sales: 20.6 billion yen (+12.3%), Operating Profit: 2.6 billion yen (+16.5%)

In the first quarter of fiscal 2022, despite being affected by the lockdown in China, both net sales and operating profit reached a record high thanks to the strong performance of diagnostic reagents in Japan, as well as the Pharmaceuticals & Fine Chemicals business.

In the Diagnostics business, sales of COVID-19 test kits and immunoassay reagents expanded in Japan, and domestic net sales exceeded the level for the same period of the previous year. Overseas, demand for outpatient testing was firm in Europe and the United States, resulting in year-on-year increase in net sales.

In the Pharmaceuticals & Fine Chemicals business, new orders for pharmaceuticals were strong, while both drug development (contract studies) and enzymes progressed as planned. As a result, net sales were higher than in the same period of the previous year.

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SEKISUI CHEMICAL (4204) Summary of Consolidated Financial Results for the First Quarter of Fiscal Year 2022 Ending March 31, 2023

2. Revision to the Consolidated Results Forecast and Other Forward-Looking Information

With regard to the consolidated forecasts for the first half and fiscal 2022 as a whole, automobile production and the market for smartphones and other products are likely to be weaker than initially projected, while a greater-than-expected surge in the prices of raw materials and parts are expected to continue. On the other hand, we anticipate improvements to selling prices, expanded sales of high added value products, and progress in cost reductions. As for foreign exchange, the yen has weakened substantially. Taking into these factors, we have revised the forecast figures published on April 27, 2022 as shown in the tables below.

Revision to the forecast for the first half of FY2022 (April 1, 2022 to September 30, 2022)

	Net Sales	Operating	Ordinary Profit	Profit Attributable to	Net Profit
	Profit	Owners of Parent	per Share
	Millions of yen	Millions of yen	Millions of yen	Millions of yen	Yen
Previous forecast (A)	594,200	39,000	41,000	27,500	61.93
Revised forecast (B)	613,300	39,000	46,000	31,000	71.08
Change (B-A)	19,100	0	5,000	3,500	-
Change (%)	+3.2	0.0	+12.2	+12.7	-
(Reference) Results for the first
half of the previous year	547,942	35,520	40,968	-3,914	-8.76
(first half of FY2021)

Revision to the forecast for FY2022 (April 1, 2022 to March 31, 2023)

	Net Sales	Operating	Ordinary Profit	Profit Attributable to	Net Profit
	Profit	Owners of Parent	per Share
	Millions of yen	Millions of yen	Millions of yen	Millions of yen	Yen
Previous forecast (A)	1,241,600	100,000	100,000	66,500	149.75
Revised forecast (B)	1,260,700	100,000	105,000	70,000	160.49
Change (B-A)	19,100	0	5,000	3,500	-
Change (%)	+15.4	0	+5.0	+5.26	-
(Reference) Results for the	1,157,945	88,879	97,001	37,067	83.17
previous year (FY2021)

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