Shin Etsu Polymer : Financial Summary for the second quarter ended September 30, 2023

Consolidated Financial Summary for the six months ended September 30, 2023

(JP GAAP)

	October 26, 2023
Listed company: Shin-Etsu Polymer Co., Ltd.
Listing code:	No. 7970 (URL https://www.shinpoly.co.jp/en/)
Listing stock exchange:	Tokyo
Representative:	Toshiaki Deto, President and Chief Operating Officer
Person to contact:	Osamu Kowada, Executive Officer, General Manager of Corporate Planning Department and
	Accounting & Finance Department, Business Administration Unit
	TEL: [phone]

Scheduled date to submit the Quarterly Securities Report:	November 10, 2023
Scheduled date of dividend payout:	November 28, 2023
Supplementary documents for quarterly results:	Yes
Quarterly results briefing:	Yes (for analysts)
	(Amounts under a million yen are truncated.)

1. Consolidated Financial Highlights for the First Half of the Fiscal Year Ending March 31, 2024 (April 1, 2023 to September 30, 2023)

1. Consolidated Financial Results (The percentages indicate the rates of increase or decrease compared with the preceding fiscal year.)

	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
	Million yen	%	Million yen	%	Million yen	%	Million yen	%
April - September 30, 2023	53,456	1.7	5,883	(11.4)	6,403	(13.3)	4,617	(8.3)
April - September 30, 2022	52,549	20.2	6,643	45.0	7,384	57.0	5,033	44.2

(Note) Comprehensive income: September 30, 2023: ¥7,981 million (-28.8%); September 30, 2022: ¥11,207 million (98.3%)

	Basic earnings	Diluted earnings
	per share	per share
	Yen	Yen
April - September 30, 2023	57.01	56.67
April - September 30, 2022	62.42	62.11

(2) Consolidated Financial Position

	Total assets	Net assets		Equity ratio
Six months ended	Million yen	Million yen		%
141,490	111,629		78.6
September 30, 2023
Year ended March 31, 2023	135,364	105,128		77.4
(Reference) Equity capital: September 30, 2023: ¥111,196 million; March 31, 2023: ¥104,734 million

2. Dividends

					Dividend per share
		1st quarter	2nd quarter		3rd quarter	Year-end	Annual
		Yen	Yen		Yen	Yen	Yen
March 2023		-	18.00		-	20.00	38.00
March 2024		-	22.00
March 2024					-	22.00	44.00
(forecast)
(Note) Revisions to dividend forecasts published	most recently: None

3. Consolidated Financial Forecasts for the Fiscal Year Ending March 31, 2024 (April 1, 2023 to March 31, 2024)

(The percentages indicate the year-on-year change.)

	Net sales		Operating profit	Ordinary profit		Profit attributable to	Basic earnings
			owners of parent	per share
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
Full year	111,000	2.5	13,000	2.0	13,000	0.1	9,000	5.5	111.20

(Note) Revisions to financial forecasts published most recently: None

* Notes

1. Any changes in important subsidiaries during the six months ended September 30, 2023 (any changes in specific subsidiaries accompanied by a change in the scope of consolidating): None

Newly added: None

, Eliminated: None

1. Adoption of accounting treatment unique to the preparation of quarterly consolidated financial statements: None
2. Any changes in accounting policies and changes or restatement of accounting estimates
   1. Changes in accounting policies associated with the revision of accounting standards, etc.: None

2.	Changes in accounting policies other than the above:		None
3.	Changes in accounting estimates:		None
4.	Restatement:		None
(4) Number of shares issued (common stock)
1.	Number of shares issued as of the term end (including treasury shares):	September 2023	82,623,376 shares
		March 2023	82,623,376 shares
2.	Number of treasury shares as of the term end:	September 2023	1,591,444 shares
		March 2023	1,690,917 shares
3.	Average number of shares during the term:	September 2023	80,984,173 shares
		September 2022	80,639,442 shares

The consolidated financial summary is not included in the scope of the quarterly review by certified public accountants or audit corporations.

Statement regarding the proper use of financial forecasts and other special remarks(Caution regarding forward-looking statements)

The forward-looking statements, such as results forecasts, included in this document are based on information currently available to the Company and certain assumptions considered reasonable, and the Company makes no representations as to their achievability. Actual results may differ materially, depending on a range of factors.

(Method of obtaining presentation material for business result meeting)

The Company will hold a business result meeting for analysts on November 8, 2023. The presentation material to be used at the briefing will be posted on the Company's website on the date of the briefing.

Shin-Etsu Polymer Co., Ltd. (7970) Financial Summary (For the six months ended September 30, 2023)

Accompanying Materials - Contents
1. Qualitative Information on Quarterly Financial Results	2
(1)	Qualitative Information on Consolidated Results	2
(2)	Explanation of Information on Future Forecasts Such as Consolidated Financial Forecasts	3
2. Consolidated Quarterly Financial Statements and Key Notes	4
(1)	Consolidated Balance Sheet	4
(2)	Consolidated Statements of Income and Consolidated Statement of Comprehensive Income	6
(3)	Consolidated Statement of Cash Flows	8
(4)	Explanatory Notes to Consolidated Financial Statements	9
	(Notes on the Premise of a Going Concern)	9
	(Notes on Significant Changes in Shareholders' Equity (if any))	9
	(Segment Information)	9

1

Shin-Etsu Polymer Co., Ltd. (7970) Financial Summary (For the six months ended September 30, 2023)

1. Qualitative Information on Quarterly Financial Results

(1) Qualitative Information on Consolidated Results

During the six months of the consolidate fiscal year under review, the world economy was recovering moderately as restrictions caused by the COVID-19 pandemic on economic activities were removed. However, the pace of recovery slowed due to prolonged inflation and monetary tightening in major countries. In the United States, consumer spending remained firm, reflecting a favorable labor market, but companies' production activities were slow given tightening financing conditions. In Europe, economies were stagnant, reflecting weak consumer spending associated with persistently high inflation and a fall in external demand. In China, the economy slowed due to a decline in exports following the end of stay-at-home demand and the slowdown of a rebound in consumer spending. In India and the ASEAN region, domestic demand expanded steadily, and high growth rates were recorded.

Looking at the Japanese economy, production activities recovered at many companies thanks to the easing of parts shortages. In addition, capital expenditure and consumer spending started to pick up again.

The Group's business environment remained firm overall, reflecting an increase in demand in the automotive- related industry. Demand in the semiconductor industry remained flat.

In this operating environment, the Group continued to focus its sales activities on boosting sales of both key products and new businesses in Japan and overseas, to expand the production/supply systems as well.

As a result, consolidated net sales stood at ¥53,456 million (up 1.7% year on year). Operating profit amounted to ¥5,883 million (down 11.4% year on year), ordinary profit was ¥6,403 million (down 13.3% year on year), and profit attributable to owners of parent came to ¥4,617 million (down 8.3% year on year) for the six months under review.

Consolidated results by segment are as follows.

1) Electronic Devices segment

In the Electronic Devices segment, shipments of products for automotive applications such as input devices remained solid given a recovery in demand in the automotive industry. However, with shipments of electronic device-related products remaining sluggish, overall sales stood at the year-ago level.

Of input devices, shipments of touchpads for slim notebook personal computers were weak, but shipments of automotive key switches and capacitive touch switches saw steady growth. Overall sales remained firm. Overall sales for display-related products were sluggish. Although shipments of view/light path control films (VCF) were strong, shipments of LCD connectors fell.

Sales of component-related products did not increase as expected, reflecting a decline in shipments of electronic- part testing connectors, although shipments of in-vehicle silicone molded products increased significantly.

As a result, segment sales stood at ¥12,153 million (up 2.2% year on year) and operating profit was ¥821 million (up 0.5% year on year).

2) Precision Molding Products segment

In the Precision Molding Products segment, overall sales remained roughly flat from a year ago, reflecting firm shipments of semiconductor-related containers, OA device components, and silicone rubber molded products. Overall sales for semiconductor-related containers remained at the year-ago level. Shipments of small diameter wafer containers were weak, but shipments of 300-mm wafer containers were firm.

Sales of parts for OA device components were firm. Despite decreased shipments of semi-conductive rollers, shipments of rollers for fuser units of multi-functional printers increased sharply.

Sales of carrier tape-related products were sluggish. Shipments of carrier tapes for micro electronic parts saw sluggish growth.

Sales of silicone rubber molded products generally remained flat, with weak results of general molded products offset by steady results of medical equipment.

As a result, segment sales stood at ¥24,885 million (up 2.1% year on year) and operating profit was ¥4,129 million (down 21.4% year on year).

2

Shin-Etsu Polymer Co., Ltd. (7970) Financial Summary (For the six months ended September 30, 2023)

3) Housing & Living Materials segment

In the Housing & Living Materials segment, overall sales remained flat. Shipments of wrapping films were recovering, reflecting a rebound in the movement of people, but market conditions for PVC products were extremely difficult.

Sales of packing materials such as wrapping films were firm as the demand for food service industry was recovering and demand for mainstay small wrapping rolls was also beginning to improve.

Sales for functional compounds were weak with strong shipments for automotive applications offset by sluggish shipments for applications in areas such as cables for industrial machines.

Sales of PVC pipes and related products remained at the year-ago level despite weak shipments, reflecting efforts to maintain sales prices.

Overall sales for exterior materials remained weak because demand for corrugate panels and other products continued to fall.

Sales of functional materials remained firm with almost flat sales for automotive electronic component applications and growth in shipments for displays.

As a result, segment sales stood at ¥12,854 million (down 1.0% year on year) and operating profit was ¥684 million (up 54.7% year on year).

4) Others segment

Overall sales were solid, reflecting strong orders for the interior construction of commercial facilities and public facilities in the construction business.

As a result, segment sales stood at ¥3,564 million (up 7.8% year on year) and operating profit was ¥246 million (up 88.8% year on year).

(2) Explanation of Information on Future Forecasts Such as Consolidated Financial Forecasts

Consolidated financial forecasts for the fiscal year ending March 31, 2024 published on April 26, 2023 remain unchanged.

3

Shin-Etsu Polymer Co., Ltd. (7970) Financial Summary (For the six months ended September 30, 2023)

2. Consolidated Quarterly Financial Statements and Key Notes

(1) Consolidated Balance Sheet

(Million yen)

				Year ended March 31, 2023		Second quarter ended
					September 30, 2023
				(As of March 31, 2023)
					(As of September 30, 2023)
	Assets
	Current assets
	Cash and deposits			46,900		45,046
	Notes and accounts receivable - trade, and	24,745	24,931
	contract assets
	Electronically recorded monetary claims -			3,509		4,082
	operating
	Merchandise and finished goods	11,291	12,394
	Work in process			2,006		1,644
	Raw materials and supplies	6,333	6,331
	Accounts receivable - other			2,723		2,182
	Other	922	1,333
	Allowance for doubtful accounts			(360)		(158)
	Total current assets		98,072	97,786
	Non-current assets
	Property, plant and equipment
	Buildings and structures, net			12,885		13,175
	Machinery, equipment and vehicles, net	7,245	7,101
	Land			6,975		6,981
	Construction in progress	4,457	10,389
	Other, net			2,125		2,226
	Total property, plant and equipment		33,689	39,873
	Intangible assets
	Software	126	820
	Goodwill			199		177
	Other	546	75
	Total intangible assets			872		1,074
	Investments and other assets
	Investment securities			934		967
	Deferred tax assets	639	600
	Other			1,155		1,187
	Total investments and other assets		2,730	2,755
	Total non-current assets			37,292		43,703
	Total assets		135,364	141,490

4

Shin-Etsu Polymer Co., Ltd. (7970) Financial Summary (For the six months ended September 30, 2023)

(Million yen)

			Year ended March 31, 2023		Second quarter ended
				September 30, 2023
			(As of March 31, 2023)
				(As of September 30, 2023)
	Liabilities
	Current liabilities
	Notes and accounts payable - trade		15,065		15,544
	Electronically recorded obligations - operating	2,948	2,944
	Accounts payable - other		735		1,466
	Income taxes payable	1,719	1,403
	Accrued expenses		2,361		2,077
	Provision for bonuses	1,713	1,764
	Provision for bonuses for directors (and other		34		21
	officers)
	Other	2,911	1,894
	Total current liabilities		27,489		27,116
	Non-current liabilities
	Net defined benefit liability		1,335		1,350
	Other	1,410	1,393
	Total non-current liabilities		2,746		2,744
	Total liabilities	30,236	29,860
	Net Assets
	Shareholders' equity
	Capital stock		11,635		11,635
	Capital surplus	10,764	10,766
	Retained earnings		79,619		82,618
	Treasury shares	(1,660)	(1,562)
	Total shareholders' equity		100,360		103,458
	Accumulated other comprehensive income
	Valuation difference on available-for-sale		338		375
	securities
	Foreign currency translation adjustment	4,030	7,357
	Remeasurements of defined benefit plans, net of		4		5
	tax
	Total accumulated other comprehensive income	4,373	7,738
	Share acquisition rights		394		433
	Total net assets	105,128	111,629
	Total liabilities and net assets		135,364		141,490

5

Shin-Etsu Polymer Co., Ltd. (7970) Financial Summary (For the six months ended September 30, 2023)

1. Consolidated Statements of Income and Consolidated Statement of Comprehensive Income Consolidated Statements of Income
   Six months ended September 30

(Million yen)

Six months ended September 30, 2022 (April 1, 2022 to September 30, 2022)

Six months ended September 30, 2023 (April 1, 2023 to September 30, 2023)

	Net sales		52,549	53,456
	Cost of sales	35,671	37,658
	Gross profit		16,877	15,798
	Selling, general and administrative expenses		10,233	9,915
	Operating profit		6,643	5,883
	Non-operating income
	Interest income		57	67
	Foreign exchange gains	624	298
	Other		77	202
	Total non-operating income		760	569
	Non-operating expenses
	Interest expenses	12	17
	Loss on retirement of non-current assets		3	10
	Disaster recovery expenses		-	19
	Other		3	1
	Total non-operating expenses		19	49
	Ordinary profit		7,384	6,403
	Extraordinary profit
	Settlement income		-	40
	Gain on reversal of share acquisition rights	2	35
	Total extraordinary profit		2	75
	Extraordinary losses
	Impairment loss		-	62
	Total extraordinary losses		-	62
	Profit before income taxes		7,386	6,416
	Income taxes - current		2,158	1,774
	Income taxes - deferred		194	25
	Total income taxes		2,352	1,799
	Profit		5,033	4,617
	Profit attributable to owners of parent		5,033	4,617

6

Shin-Etsu Polymer Co., Ltd. (7970) Financial Summary (For the six months ended September 30, 2023)

Consolidated Statement of Comprehensive Income

Six months ended September 30

(Million yen)

Six months ended September 30, 2022 (April 1, 2022 to September 30, 2022)

Six months ended September 30, 2023 (April 1, 2023 to September 30, 2023)

	Profit			5,033		4,617
	Other comprehensive income
	Valuation difference on available-for-sale			6		36
	securities
	Foreign currency translation adjustment	6,165	3,326
	Remeasurements of defined benefit plans, net			1		0
	of tax
	Total other comprehensive income		6,174	3,364
	Comprehensive income		11,207		7,981
	Comprehensive income attributable to
	Comprehensive income attributable to owners			11,207		7,981
	of the parent

7

Shin-Etsu Polymer Co., Ltd. (7970) Financial Summary (For the six months ended September 30, 2023)

(3) Consolidated Statement of Cash Flows

				(Million yen)
			Six months ended	Six months ended
			September 30, 2022	September 30, 2023
			(April 1, 2022 to	(April 1, 2023 to
			September 30, 2022)	September 30, 2023)
	Cash flows from operating activities
	Profit before income taxes	7,386	6,416
	Depreciation and amortization		1,731	2,123
	Impairment loss		-	62
	Amortization of goodwill		114	34
	Interest and dividend income	(76)	(89)
	Interest expenses		12	17
	Foreign exchange losses (gains)	(159)	(96)
	Loss on retirement of non-current assets		3	10
	Disaster recovery expenses		-	19
	Settlement income		-	(40)
	Decrease (increase) in notes and accounts	(978)	351
	receivable - trade
	Decrease (increase) in inventories		(2,221)	(52)
	Increase (decrease) in notes and accounts payable -	360	(303)
	trade
	Increase (decrease) in net defined benefit liability		0	3
	Decrease (increase) in consumption taxes	(375)	646
	receivable/payable
	Other, net		(165)	(559)
	Subtotal	5,632	8,543
	Interest and dividends income received		61	75
	Interest expenses paid	(13)	(18)
	Repayment (payment) of corporate taxes		(1,743)	(2,221)
	Net cash provided by (used in) operating activities		3,937	6,378
	Cash flows from investing activities
	Decrease (increase) in time deposits	394	752
	Purchase of property, plant and equipment		(3,911)	(7,950)
	Proceeds from sales of investment securities		-	115
	Purchase of intangible assets		(502)	(304)
	Purchase of shares of subsidiaries	(22)	-
	Other, net		(165)	(60)
	Net cash provided by (used in) investing activities		(4,206)	(7,446)
	Cash flows from financing activities
	Cash dividends paid	(1,126)	(1,617)
	Proceeds from sale of treasury shares		116	97
	Other, net	(93)	(167)
	Net cash provided by (used in) financing activities		(1,103)	(1,687)
	Effect of exchange rate change on cash and cash		3,374	1,549
	equivalents
	Net increase (decrease) in cash and cash equivalents		2,002	(1,206)
	Cash and cash equivalents at beginning of period		45,848	43,843
	Cash and cash equivalents at end of period		47,851	42,636

8