Shin Etsu Chemical : Consolidated(2.1 MB)

Press Release

Consolidated Financial Results for the First Half Ended September 30, 2022

Shin-Etsu Chemical Co., Ltd.	(JP GAAP)

October 27, 2022

Listing Code: No. 4063 (URL: https://www.shinetsu.co.jp/en/)

Listing Stock Exchange: Tokyo and Nagoya

Representative: Yasuhiko Saitoh (Mr.) Representative Director/President

Personnel to contact: Toshiyuki Kasahara (Mr.) Corporate Officer, General Manager of Finance & Accounting Department Tel: [phone]

Date of the filing of the quarterly consolidated financial statements: November 11, 2022

Date of dividend payment: November 21, 2022

Preparation of supplemental explanatory materials: Yes ("Appendix" is attached.)

Holding of quarterly financial results meeting: Yes (for investment analysts and institutional investors)

Amounts are stated in millions of yen by discarding fractional amounts less than 1 million. Percentage figures indicate increase (decrease) over previous corresponding period.

1. Consolidated Operating Performance for the First Half Ended September 30, 2022

(From April 1, 2022 to September 30, 2022)

(1) Results of consolidated operations														(Millions of yen)
		Net sales	Operating income		Ordinary income			Net income attributable
						to owners of parent
April - September 2022	1,409,336	49.7%			536,237	79.7%		559,026			84.2%			392,324	77.6%
April - September 2021	941,341	32.5%		298,403	61.9%		303,522			57.9%			220,904	57.4%
(Note) Comprehensive income (Millions of yen)	From April 1, 2022 to September 30, 2022:	729,278 [129.2%]
							From April 1, 2021 to September 30, 2021:	318,232 [153.7%]
		Net income	Diluted net income
		per share (yen)	per share (yen)
April - September 2022			955.99					955.41
April - September 2021				531.67					531.19
(2) Consolidated financial position																	(Millions of yen)
		Total assets		Net assets		Stockholders'	Net assets per share
				equity ratio							(yen)
September 30, 2022	4,612,477			3,901,473			81.7%				9,268.71
March 31, 2022		4,053,412			3,429,208			82.1%				8,007.24
(Note) Stockholders' equity (Millions of yen) As of September 30, 2022: 3,769,440	As of March 31, 2022: 3,326,564
2. Cash Dividends
							Cash dividends per share in the fiscal year (yen)
				1st quarter		2nd quarter	3rd quarter	Year-end					Fiscal year
April 2021 - March 2022			-			150.00			-			250.00					400.00
April 2022 - March 2023			-			225.00
April 2022 - March 2023 (forecast)										-			225.00					450.00
(Note) Revision of the latest forecast of cash dividends: No
3. Forecast of Consolidated Operating Performance for the Fiscal Year Ending March 31, 2023
(From April 1, 2022 to March 31, 2023)																		(Millions of yen)

							Net income	Net income
	Net sales		Operating income	Ordinary income	attributable to	per share
							owners of parent	(yen)
Fiscal year	2,700,000	30.2%	940,000	39.0%	980,000	41.1%	680,000	36.0%	1,670.65

(Note) Revision of the latest forecast of consolidated operating performance: Yes

Forward-looking statements such as the forecast of results of operations made in this document involves risks and uncertainties since they are based on management's assumptions and beliefs in light of the information currently available to it. The reader should be aware that actual results may be materially different from any future results expressed herein due to various factors. Material factors affecting the actual results may include overall economic conditions in which the businesses of our company and our group companies are involved, the relevant market trends and fluctuations in foreign exchange rates of the yen, in particular, the exchange rate between the U.S. dollar and the yen; provided, however, that such factors as may affect results of operations are not limited to those enumerated above.

(Notes)

1. Changes in significant subsidiaries during the first half ended September 30, 2022: No

(Note) This item indicates whether there were changes in significant subsidiaries affecting the scope of consolidation during the first half ended September 30, 2022.

1. Adoption of special accounting methods for presenting quarterly consolidated financial statements: No
2. Changes in accounting policies applied, changes in accounting estimates and retrospective restatement

Changes in accounting policies applied due to revisions of accounting standards: Yes

Changes in accounting policies other than the above: No

Changes in accounting estimates: No

Retrospective restatement: No

(Note) Please see [2. Consolidated Financial Statements (4) Notes to Consolidated Financial Statements, "Changes in Accounting Policies"] on page 14 for further details.

(4) Number of shares outstanding (common stock)

Number of shares outstanding at period end

Number of shares of treasury stock at period end

Weighted-average number of shares outstanding over period

September 30, 2022	March 31, 2022
416,662,793	416,662,793
9,978,306	1,218,008
April - September	April - September
2022	2021
410,383,578	415,487,937

(Note) Based on a resolution at the Board of Directors Meeting held on April 27, 2022, we repurchased a maximum of 5,717,200 shares (99,998 million yen) whose cancellation is scheduled to be completed on November 8, 2022.

Moreover, a resolution was made at the Board of Directors Meeting held on July 27 concerning the repurchase of up to 9 million shares (100 billion yen) by December 30 whose cancellation is scheduled to be completed on January 11, 2023. Based on this resolution, we have repurchased a total of 3,072,900 shares (50,935 million yen) as of September 30, 2022.

(Information regarding quarterly review procedures)

The financial information contained in this report is not subject to quarterly review procedures by independent auditors.

Shin-Etsu Chemical Co., Ltd. (4063)

First Half Ended September 30, 2022

(Attached Documents)

INDEX

1. Qualitative Information Regarding Quarterly Results...........................................................................	2
(1)	Explanation Regarding the Operating Results .................................................................................	2
(2)	Explanation Regarding Information Relevant to Forecasts such as Consolidated Business
		Forecast ............................................................................................................................................	8
2. Consolidated Financial Statements ........................................................................................................	9
(1)	Consolidated Balance Sheets ...........................................................................................................	9
(2)	Consolidated Statements of Income and Statements of Comprehensive Income ..........................	11
(3)	Consolidated Statements of Cash Flows ........................................................................................	13
(4)	Notes to Consolidated Financial Statements ..................................................................................	14
	(Notes on Premise of Going Concern).............................................................................................	14
	(Notes on Significant Changes in Stockholders' Equity) ................................................................	14
	(Changes in Accounting Policies)....................................................................................................	14
(Appendix)
1.		Quarterly Operating Results ...........................................................................................................	15
2.		Capital Expenditures and Depreciation and Amortization .............................................................	16
3.		Other Financial Items (Consolidated) .............................................................................................	17
4.		Comparative Balance Sheets (Consolidated) ..................................................................................	17
5.		Cash Dividends per Share ..............................................................................................................	18
6.		Sales by Manufacturing Location for Each Segment .....................................................................	18
7.		Sales by Region ..............................................................................................................................	19
8.		Average Exchange Rate ..................................................................................................................	19
9.		Topics..............................................................................................................................................	20
10.		Capital Investments.........................................................................................................................	20

1

Shin-Etsu Chemical Co., Ltd. (4063)

First Half Ended September 30, 2022

1. Qualitative Information Regarding Quarterly Results

(1) Explanation Regarding the Operating Results

During the first half of the fiscal year ending March 31, 2023 (April 1, 2022, to September 30, 2022), it is noteworthy that the International Monetary Fund revised downward its 2022 economic growth forecasts a couple of times already, and an expression "the first phenomenon to be observed in decades" is often heard. On top of the cyclical slowdown, a variety of changes are shaking the global economy. While monetary policies are taken to curb inflation, industrial policies are proceeding apace aimed at carbon neutrality, economic security, and other goals. We maintain close communication with our customers, expedite the development of products that are of value to them, and continue to provide a reliable supply of unwavering quality products. We will skillfully weather short-term fluctuations and will continue capital investments and R&D activities so as to needs and demand from customers and markets in a timely manner.

The business results for the first half of the fiscal year ending March 31, 2023, are as follows:

						(Billions of yen)
		2021		2022		Increase	2022
		Apr - Sep		Apr - Sep		(Decrease)			Apr - Jun	Jul - Sep
Net sales	941.3		1,409.3		49.7%		656.7	752.6
		468.0
Operating income	298.4		536.2	79.7%		249.6	286.6
		237.8
Ordinary income	303.5		559.0		84.2%		262.6	296.3
		255.5
Net income attributable	220.9		392.3		77.6%		184.1	208.2
to owners of parent			171.4
ROIC (per annum)	24.8%		36.7%		11.9 points
ROE (per annum)	15.1%		22.1%		7.0 points
ROA (per annum)	17.2%		25.8%		8.6 points
Per Share (Yen)
	Net Income	532		956		424
	Cash Dividends	150				75
	Notes: ・ ROIC: Return on invested capital
	Net operating income after tax / (Net assets + Interest-bearing liabilities－Cash)

• ROE: Return (Net Income) on equity

Equity used for this calculation is net assets excluding both share subscription rights and non-controlling interests in consolidated subsidiaries.

• • ROA: Return (Ordinary Income) on total assets.
  • ROIC, ROE and ROA (per annum) are calculated by doubling first-half net operating income after tax, net income and ordinary income, respectively.
• Amounts are stated in billions of yen by discarding fractional amounts less than 0.1 billion on this summary.

2

Shin-Etsu Chemical Co., Ltd. (4063)

First Half Ended September 30, 2022

Net Sales and Operating Income by Segment

(Billions of yen)

			Net Sales		Operating Income
	2021	2022		Increase	2021	2022		Increase
	Apr - Sep		Apr - Sep		(Decrease)	Apr - Sep		Apr - Sep		(Decrease)
Infrastructure	363.9	651.6		79.0%	123.2	289.8		2.4 times
Materials		287.7	166.6
Electronics	335.5	439.3		30.9%	118.7	159.5	34.3%
Materials		103.8	40.8
Functional	188.4	255.3		35.5%	46.4	73.5	58.3%
Materials		66.9	27.1
Processing &	53.3	63.0		18.2%	10.4	14.0	35.0%
Specialized Services		9.7	3.6
Total	941.3	1,409.3		49.7%	298.4	536.2	79.7%
					468.0					237.8

Processing &	Processing &
Specialized Services	Specialized Services
4%	3%

Functional

Materials

18%

Electronics

Materials

31%

Net

Sales

1,409.3

Billions of yen

Functional

Materials

14%

Infrastructure

Materials

47%

Electronics

Materials

30%

Operating

Income

536.2

Billions of yen

Infrastructure

Materials

53%

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