Shin Etsu Chemical : Consolidated Financial Results for the First Three Quarters Ended December 31, 2021(JP GAAP)

Press Release

Consolidated Financial Results for the First Three Quarters Ended December 31, 2021

Shin-Etsu Chemical Co., Ltd.	(JP GAAP)
	January 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: February 10, 2022

Date of dividend payment: -

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 Three Quarters Ended December 31, 2021

(From April 1, 2021 to December 31, 2021)

(1) Results of consolidated operations															(Millions of yen)
				Net sales		Operating income			Ordinary income			Net income attributable
										to owners of parent
April - December 2021	1,483,703	36.1%			480,112	68.4%				490,304		67.3%			353,135	65.5%
April - December 2020	1,090,407	(7.1%)		285,021	(10.6%)			293,043		(11.3%)			213,321	(13.6%)
(Note) Comprehensive	income (Millions of yen)		From April 1, 2021 to December 31, 2021:	469,524 [145.8%]
									From April 1, 2020 to December 31, 2020:	190,980 [(6.8%)]
				Net income		Diluted net income
				per share (yen)		per share (yen)
April - December 2021				850.00					849.18
April - December 2020				513.25					512.95
(2) Consolidated financial position																		(Millions of yen)
				Total assets				Net assets				Stockholders'		Net assets per share
									equity ratio							(yen)
December 31, 2021		3,759,139			3,228,903					83.5%				7,553.27
March 31, 2021		3,380,615			2,886,625					83.2%				6,769.72
(Note) Stockholders' equity (Millions of yen) As of December 31, 2021: 3,137,645	As of March 31, 2021: 2,813,137
2. Cash Dividends
									Cash dividends per share in the fiscal year (yen)
						1st quarter		2nd quarter		3rd quarter		Year-end				Fiscal year
April 2020 - March 2021			-		110.00					-		140.00				250.00
April 2021 - March 2022			-		150.00					-
April 2021 - March 2022 (forecast)															250.00				400.00
(Note) Revision of the latest forecast	of cash dividends: Yes
3. Forecast of Consolidated Operating Performance for the Fiscal Year Ending March 31, 2022
(From April 1, 2021 to March 31, 2022)																		(Millions of yen)
	Net sales	Operating income		Ordinary income	Net income		Net income
		attributable to		per share
																			owners of parent		(yen)
Fiscal year	2,040,000	36.3%	675,000	72.1%		690,000	70.3%		500,000	70.2%		1,203.54
(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 three quarters ended December 31, 2021: No

(Note) This item indicates whether there were changes in significant subsidiaries affecting the scope of consolidation during the first three quarters ended December 31, 2021.

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 (3) Notes to Consolidated Financial Statements, "Changes in Accounting Policies"] on page 13 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

December 31, 2021		March 31, 2021
416,662,793	416,662,793
1,260,754	1,115,572
April - December		April - December
2021		2020
415,454,846	415,630,230

(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 Three Quarters Ended December 31, 2021

(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)	Notes to Consolidated Financial Statements................................................................................	13
(Notes on Premise of Going Concern)...........................................................................................	13
(Notes on Significant Changes in Stockholders' Equity) ..............................................................	13
(Changes in Accounting Policies)..................................................................................................	13
(Segment Information)...................................................................................................................	14

(Appendix)
1.	Quarterly Operating Results ...........................................................................................................	16
2.	Capital Expenditures and Depreciation and Amortization .............................................................	17
3.	Other Financial Items (Consolidated) .............................................................................................	18
4.	Comparative Balance Sheets (Consolidated)..................................................................................	18
5.	Comparative Statements of Cash Flows (Consolidated).................................................................	19
6.	Cash Dividends per Share ..............................................................................................................	19
7.	Sales by Manufacturing Location for Each Segment .....................................................................	20
8.	Sales by Region ..............................................................................................................................	20
9.	Average Exchange Rate ..................................................................................................................	20
10.	Operating Income Ratio ..................................................................................................................	21

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

First Three Quarters Ended December 31, 2021

1. Qualitative Information Regarding the Quarterly Results

(1) Explanation Regarding the Operating Results

During the third quarter of the fiscal year ending March 31, 2022 (April 1, 2021 to December 31, 2021), the world economy continued to grow steadily, as indicated by the economic growth rate of over 5% (GDP growth rate). On the other hand, the major economic zones faced supply turmoil and price pressures and had to tackle challenges while continuing to deal with coronavirus infections. The Group has carried out its business while responding swiftly to these events. Going forward, we will continue, without prejudgment, to give the utmost priority to the health and safety of our employees, focus on business requirements such as maintaining high operations, ensuring a stable supply, and protecting accounts receivables, and maintain communication with our customers. We will promote the development of valuable products and provide a stable supply of products of unwavering quality.

The business results for the third quarter of the fiscal year ending March 31, 2022 are as follows:

			(Billions of yen)
	2020	2021	Increase			2021
	Apr - Dec	Apr - Dec	(Decrease)		Apr - Jun	Jul - Sep	Oct - Dec
Net sales	1,090.4	1,483.7	36.1%	393.3		434.2	507.1	542.3
Operating income	285.0	480.1	68.4%	195.1		128.8	169.5	181.7
Ordinary income	293.0	490.3	67.3%	197.3		130.8	172.6	186.7
Net income attributable	213.3	353.1	65.5%			95.7	125.1	132.2
to owners of parent		139.8
ROIC (per annum)	16.4%	25.9%	9.5 points
ROE (per annum)	10.5%	15.8%	5.3 points
ROA (per annum)	12.1%	18.3%	6.2 points
Net income per share(Yen)	513	850		337

Notes: ・ ROIC: Return on invested capital

Net operating income after tax / (Net assets + Interest-bearingliabilities－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 multiplying net operating income after tax, net income and ordinary income for the first three quarters by four over three, respectively.
• Amounts are stated in billions of yen by discarding fractional amounts less than 0.1 billion on this summary.

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

First Three Quarters Ended December 31, 2021

Net Sales and Operating Income by Segment

(Billions of yen)

		Net Sales		Operating Income
	2020	2021	Increase	2020	2021	Increase
	Apr - Dec	Apr - Dec	(Decrease)	Apr - Dec	Apr - Dec	(Decrease)
Infrastructure	345.9	595.8	72.2%	63.6	212.3	3.3 times
Materials	249.9	148.7
Electronics	441.5	516.8	17.1%	158.5	183.8	16.0%
Materials	75.3	25.3
Functional	230.1	289.1	25.7%	51.5	68.3	32.7%
Materials	59.0	16.8
Processing &	72.8	81.8	12.4%	11.5	16.3	42.4%
Specialized Services	9.0	4.8
Total	1,090.4	1,483.7	36.1%	285.0	480.1	68.4%
			393.3			195.1

	Processing &			Processing &
	Specialized Services			Specialized Services
	6%			3%
			Functional	Infrastructure
Functional		Infrastructure	Materials
	Materials
Materials		14%
	Materials	45%
19%	Net	40%
	Operating
	Sales			Income
	1,483.7			480.1
	Billions of yen			Billions of yen
	Electronics			Electronics
	Materials			Materials
	35%			38%

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