Sekisui Chemical Co

Hi, I am Kato. Thank you very much for participating in today's session despite your busy schedule. Starting on page 1, I would like to explain some of today's highlights, the message to stress. The result for FI2024. In FI2024, net sales increased by 41.2 billion yen to 1 trillion and 297.8 billion yen. Operating profit grew by 13.6 billion yen, exceeding the 100 billion yen and landing at 108 billion yen. Profits at all levels exceeded the January forecast and recorded highs. ROE was 10.2%. We plan to continue to grow sales and operating profit in FY 2025. Operating profit is set at 115 billion yen as per the mid-term plan, and we aim to record highs at each level of profit. There are some uncertainties such as the impact of tariffs and FX fluctuations, which I will explain later. But we've managed to set a profit plan as of the end of March to achieve the final year target of the midterm management plan. We believe our earning power is steadily growing and is driving our growth. As for shareholder returns, since the final profit for FI 2024 was 81.9 billion yen, as per our shareholder return policy, we increased the year-end dividend by 2 yen from the January forecast to 42 yen per share, or annual dividend of 79 yen per share. For FY2025, we plan to increase the annual dividend by ¥1 to ¥80 per share, the 16th consecutive FY of dividend growth. We've set a limit of 4 million shares for the share buyback and will cancel 4 million shares. Page 2 is progress of the mid-term plan. First, the investment plan. The cumulative total for the two years until FY2024 on the resolution basis was 195.8 billion yen. We had capacity expansion in high-performance plastics and capex for the launch of mass production lines for perovskite solar cells, and so increase in gross investment projects. As such, strategic capex is expected to exceed the budget set in the mid-term plan. We will also continue to watch several M&A projects, mainly in gross areas. Below left is strategic innovation. Regarding perovskite solar cells, we said a new company in January are making good progress toward the launch of a 100 MW scale production line. In the bottom right, for strengthening the ESG management platform, the sales ratio of products enhancing sustainability grew steadily to 77%. will continue our efforts to contribute to the natural environment and to solving social issues while achieving profitability and sustainable growth. Page 3. This page explains our shareholder return track record, policy, and plans for FY2025 for your reference. In FY2025, we continue to actively make return to shareholders aiming to increase dividends for the 16th consecutive fiscal year with a focus on increasing profits and dividend. And that's all from myself. Thank you.

This is Ikutsuka Shimizu, Head of Business Strategy. I will cover the FY20 for financial results and the plan for FY25. Please turn to page 4. The FX rates are indicated on the slide. Page 5 is the overview of the FY24 results. As Mr. Kato explained at the outset, all profit lines grew, marking record highs. The blue star marks indicate record high figures. Operating profit reached 108 billion yen. Page 6 illustrates the segment results. In HPP, growth was driven by high-performance products, mainly in the electronics field, resulting in higher sales and a substantial increase in operating profit. In housing, despite the delay in the new housing market recovery in some rural areas, we were able to halt the decline in profits and achieved a significant profit growth through measures to strengthen profitability and growth of the renovation business. In UIEP, although the market remains sluggish, we achieved sales and profit growth by improving the selling price and expanding sales of prioritized products. The medical business achieved higher sales and profits by growing the sales of testing kits overseas in the pharmaceutical ingredients business. HPP, UIEP, and medical renewed the previous record high profits. The other segment results were as indicated on the slide. Page 7 illustrates the segment results breakdown for the first and the second halves. The second half results are indicated on the right. HPP housing and medical achieved significant profit growth again in the second half. Steady OP growth was sustained in UIEP as well. The other segment and consolidated figures were all as illustrated on the slide. Page 8 shows the analysis of the FY24 results. The factors behind the OP change are indicated on the right. Due to the sluggish domestic and overseas markets, sales volume and the product mix contribution fell short of the January forecast, but sales increased significantly year-on-year, owing to expanded sales of high-performance products. Despite the impact of higher fixed costs and raw material costs, operating profit was upped by 13.6 billion yen, surpassing the January forecast to 108 billion yen. Let me switch the topic to the FY25 plan from page 9. The FX assumptions are as stated. The FY25 plan was formulated in March before the announcement of the U.S. reciprocal tariff measures, and I will cover the potential impact later in my presentation. Page 10 is the business plan and shareholder returns for FY25. As stated by Mr. Kato at the outset, we are guiding for operating profit of 115 billion yen and net profit of 82 billion yen in line with our medium-term plan. We will raise the annual dividend by 1 yen to 80 yen per share, marking the 16th consecutive year of dividend hikes. Page 11 illustrates our outlook for market conditions. The global auto production volume in the upper left slightly exceeded our expectation in the fourth quarter of FY24. For FY25, we expect the volume to be roughly on par with the previous year. The smartphone shipment volume in the lower left was in line with our expectation and on par with the previous year in Q4 of 2024. For FY25, we expect the shipments to slightly exceed the previous year. Upper right, total visitors with housing business in the second half of FY24 were down year-on-year, and we expect modest year-on-year decline for FY25 as well. As indicated below the table, we expect new housing stats to continue to decline, falling below 800,000 units in FY25. Lower right, domestic NAFTA price was slightly above the forecast in Q4 of FY24. We expect the price to drop slightly year-on-year in FY25. Page 12 demonstrates the FY25 plan by segment. We project to achieve higher sales and profits for all segments, with the three segments excluding housing expected to achieve record high profits. For HPP, we'll continue to focus on expanding sales of high-performance products, aiming for sales and profit growth as well as a new record high profit. For housing, while the number of orders is expected to remain nearly flat year-on-year, we plan to achieve sales and profit growth on the back of higher unit prices and growth in the renovation business. In UIEP, we plan to achieve new record high profits by continuing to expand sales of prioritized products, increasing overseas sales, and thoroughly securing spreads. In medical, we aim to achieve record profits by securing domestic and overseas diagnostic demand and strengthening new orders in the pharmaceutical science business. In other segment, we'll focus on making steady progress through the perovskite solar cell business in particular. Page 13 is the FY25 segment outlook for the first half and the second half. In the first half, we plan to increase profits in HPV and housing. In the second half, we aim to grow the profits in all segments. Page 14 shows the analysis of the FY25 plan. Please take a look at the waterfall chart on the right. FY25 plan calls for another significant profit growth from the sales volume and the product mix component. On the other hand, we expect an increase in fixed cost due to investments in human capital and the new ERP system that went live this fiscal year. However, we plan to cover these increases through improvements in selling prices and CR, etc., aiming for 115 billion yen in OP up by 7 billion year-on-year. Please turn to page 15. As FY25 is the final year of the current midterm plan, let me also highlight the progress. The upper section shows the FY25 plan against the targets outlined in the midterm plan. Due to changes and downturns in market conditions, sales will fall short of the medium-term plan, but nevertheless, sales continue to grow steadily. Profits are in line with the medium-term plan. The lower section indicates the progress of profit plan by segment. While the housing and medical segments will not meet the targets in the midterm plan, HPP and UIEP are expected to achieve the midterm targets. Page 16 provides a gap analysis versus a midterm plan. Due to changes in market conditions, sales volume and product miscontribution will fall short of expectation, but this will be offset by improvements in selling price, control over fixed costs, as well as FX gains, resulting in projecting profits in line with the mid-term plan. Page 17 is a historical trend of consolidated performance. Through our efforts to date, we believe we have made solid progress in enhancing your earnings capability and improving profitability while also achieving steady growth. With our eyes on the future growth, we'll focus on our OP target of 115 billion yen for FY25 to renew the record high profit for two years in a row and achieve the mid-term plan targets. Page 18 will be the last page from me. As we all know, the outlook remains uncertain due to the impact of U.S. reciprocal tariff policy and volatile FX market. I'd like to take this opportunity to reiterate the assumptions and thinking behind your FY25 plan. First, as we typically formulate our plans for the next fiscal year around February and March, the impact of tariffs and other factors has not been reflected. As shown at upper right, we estimate the direct impact of reciprocal tariff measures to be approximately negative 2.5 billion yen on OP. However, we plan to offset this by the measures outlined here. The lower right table outlines the other potential impacts, such as weaker demand, retaliatory tariffs by other countries, and FX fluctuations, and forecasting is extremely difficult. That said, we'll respond appropriately as circumstances change and focus on taking all possible measures within the company's capacity to minimize the impact. That concludes my part. Thank you for your attention.

Yes, this is Nishida speaking. Please allow me to explain the FY2024 result. Page 20 shows changes in consolidated subsidiaries and their impact on financial figures. Sekisui Solar Film in charge of perovskite business has been consolidated from fourth quarter of FY2024 upon its establishment. For consolidated P&L on page 21, I will explain the items below ordinary profit. Ordinary profit was 111 billion yen, up by 5 billion yen. The smaller increase than operating profit is mainly due to a 7.4 billion yen deterioration in FX gains and losses. Throughout FY 2023, the Japanese yen depreciated by around 18 yen. against the dollar, resulting in FX gain of 7 billion yen, whereas in FY2024, the yen appreciated by about 2 yen. In both fiscal years, extraordinary profit included a gain on sales of policy shareholdings of slightly more than 14 billion yen. The main extraordinary loss in FY2024 was an impairment loss of 2 billion yen as a result of review of future plans for a portion of the diagnostics business in the U.S. Net income increased 4.0 billion yen to 81.9 billion yen, the historical high. Next is the balance sheet on page 22. Total assets increased by 7.5 billion yen. Excluding foreign exchange and changes in consolidated companies, total assets grew by 16.7 billion yen. Inventories increased by 15.6 billion yen. The main changes include a decrease in inventories of ready-built housing in the housing company, an increase in working process for construction, and increase in raw materials in the non-residential division. Investment securities decreased by 22.3 billion yen mainly due to sales. Next is page 23. Net interest bearing liabilities was negative 31.8 billion yen and remained virtually debt-free. Retained earnings increased due to net income and decreased due to shareholder returns. We purchased and canceled 4 million treasury shares respectively in FY2024. Valuation differences on available for sale securities decreased by an amount equivalent to unrealized gains due to the sale of stock holdings. ROIC ROE equity to asset ratio and DE ratio are also shown on the list. ROIC was 8.1%, an improvement of 0.8%. ROE was 10.2%, a slight decrease year-on-year. This is because the percentage increase in shareholders' equity was higher than the percentage increase in net income. In addition to the increase in retained earnings, foreign currency translation adjustments at the beginning of the year were larger than in the previous year since equity capital is calculated as an average of the beginning and end of the year. Next is consolidated cash flow, page 24. Operating cash flow was 119.2 billion yen, a 12.6 billion yen improvement year on year. In addition to improved profits, working capital also improved, but cash outflows from tax payment increased. This was due to higher than normal tax payments in FY2024 due to the sale of securities in FY2023. Investment cash flow was a cash out of 61.5 billion yen. Cash out increased due to CapEx increased by 9.9 billion yen from the previous year, while cash in from sales of marketable securities decreased by 23 billion yen. Free cash flow, including dividend payments, was a cash in of 24.8 billion yen. On top of this, there was a cash out of 8.9 billion yen for a share buyback, resulting in a decrease in interest-bearing debt and an increase in cash on hand. Depreciation, capital expenditures, and EBITDA by segment are shown on page 25. Depreciation and capex are on an increase. And in the previous fiscal year, we executed capital expenditures of about 1.3 times depreciation and amortization. EBITDA source of funds increased by 14.6 billion yen to a record high. The plan for depreciation, capital expenditures, and R&D expenses are shown on page 26. We plan to significantly increase CapEx in FY2025 to support capacity expansion and other activities. The 105 billion yen includes 15 billion yen expenditures related to the Pabroskite Sakai plant, less subsidies. Investment at Sakai will continue in FY2026. That's all from me. Thank you.

My name is Akira Asano, and in January this year, I was appointed as the company president of HPP. Let me share the business status of HPP. Page 28 illustrates the performance trend of HPP since FY 2015. Despite reshuffling our business portfolio with UIEP in the second half of FY2022, we still achieved record high profits for two consecutive years in FY23 and FY24. FY24 stood out with a significant profit growth driven by high-performance products in the electronics field. Looking ahead to FY25, despite global market uncertainties, we'll continue to focus on expanding sales of high-performance products in all strategic fields to achieve both sales and profit growth, aiming for three consecutive years of record high profits. Page 29 shows the FY24 results and how we fared against the previous year. Although the global market, including auto, remains sluggish, we were successful in expanding sales in electronics, mainly through the advanced semiconductors, in mobility with high-performance interlayer films, and in industrial field with labor-saving and environmentally friendly products. Sales were up year-on-year by 34.5 billion to 447.4 billion yen. with operating profit growing substantially by 10.3 billion yen a year to 61.2 billion yen. Looking at factors behind the OP growth, volume and mixed element was up significantly, and we also enjoyed FX benefit. The impact of raw materials was offset by improvements in selling price and CR, etc., underpinning HPP's record high profits for both the second half and the fiscal year. Page 30 provides the analysis of FY25 plan and the year-on-year changes. Despite the outlook of continued downturn in the auto market, we aim to achieve three consecutive years of record profits by increasing volume and mixed contribution primarily in mobility, including the aviation sector with some signs of recovery. Increases in fixed costs such as R&D and human capital investments with the next mid-term plan on our mind, as well as the raw material cost impact, will be covered through improvements in selling prices and the CR, etc. Sales is expected to go up by 35.5 billion yen a year to 482.9 billion, with OP growing by 2.8 billion to 64 billion yen, marking a third consecutive year of record high profit. Page 31 shows the net sales trends and KPIs for three strategic fields. In electronics, the smartphone market and demand for large panels are expected to remain robust, and we anticipate steady growth in FY25. In particular, we continue to strive for share gains and capturing new orders in the non-LCD field, focusing mainly on advanced semiconductors. In mobility, we'll continue to expand sales of NHPP products, mainly for head-up displays in the intelligent film business, and focus on growing sales of heat-raised materials for electrical equipment. Furthermore, with aerospace achieving profit in the second half of FY24 and expected to make full contribution this year, we'll step up our efforts for sales growth in the aviation and air mobility fields. In the industrial field, sales are on an upward trend due to improvements in selling prices amid weak market conditions. In addition, sales of labor-saving and environmentally friendly products, including sensors and chem materials, are progressing steadily, and we will continue to focus on maintaining spreads while elevating our presence in this field. This concludes my presentation on HPP. Thank you for your attention.

Hi, I am Yoshida from housing company. Please refer to page 33, first performance trend. In 2024, the new housing market was relatively strong in urban areas but remained sluggish in rural areas. Operating profit increased significantly as a result of profitability-enhancing efforts in the housing business and order growth in the renovation business and exceeded the January forecast. For FI 2025, we do not expect the market recovery and the number of new housing orders to remain roughly the same as the previous year, but we plan for an increase in net sales and operating profit on the back of a continued increase in unit prices through expanded sales of high-priced products and renovation business growth. Next. page 34 for fi 2024 result analysis the left graph net sales shows a decrease for the housing business due to a decline in the number of houses sold an increase for the renovation business due to order growth the company's overall sales decreased by 5.7 billion yen As for the changes in operating profit for the housing business, the impact of a decline in the number of houses sold was offset by product mix, cost reduction and measures to strengthen profitability geared toward reducing fixed costs and posted an increase of 2.3 billion yen. The renovation business was up by 1.6 billion yen thanks to contribution by shift personnel and enhancement of periodic inspections to steadily capture demand. The overall OP was 31.5 billion yen, 400 million yen more than the forecast announced in January. Next, FY2025 plan on page 35. Net sales is shown to the left. In the housing business, we plan a sales increase by increasing the number of houses sold and unit prices on the back of improvement of the product mix. In the renovation and residential business, we plan to increase overall sales by 16 billion yen to 540 billion yen through a continued growth in orders. To the right, operating profit is planned to grow by 4.5 billion yen to 36 billion yen with each segment reporting an increase. In the housing business, we plan increase of 3 billion yen year-on-year as an increase in the number of houses sold and an increase in the unit price through sales expansion of high-priced products, mainly in urban areas, will offset an increase in fixed cost to better support sales effort. In the renovation business, we plan an increase of 1.1 billion yen by growing orders. In the residential business, we plan to reduce the margin of profit increase due to investment for sustainable growth. Next, page 36 for the status of each business. To the left top, new housing orders. In FY2024, auditing unit was slightly lower than the January forecast, but on a value basis, it increased by 104% in the second half of the year. In FY2025, we do not expect market recovery and plan flat orders against the previous year. However, we'll focus on expanding orders for custom-built detached housing and apartment buildings and other high-priced products and plan to continue to increase the value of orders. Next is orders by type of construction in the middle. The number and the value of apartment buildings increased, contributing to an increase in the unit price. NFI 2025 will focus on expanding sales of detached houses and apartment buildings. We also strengthen area-specific product strategies to grow orders. Next on the right, measures to enhance profitability. We achieved the target one year ahead by reducing fixed costs for new housing business, mainly by shifting personnel to gross areas. Based on the strengthened profit base, we'll strengthen area-specific marketing and launch product strategically to make a shift towards marginal profit growth in FY 2025. In the renovation business, bottom left, orders steadily increased in FY2024. In FY2025, we'll continue to upgrade periodic diagnosis and enhance sales capabilities, aiming for further growth. In the residential business, to the right bottom hand side, we aim stable growth by increasing the number of dwelling units under management at real estate business and focus on the purchase-resale as well as the asset utilization business. Town and community development business is steadily growing. We'll focus on securing projects in the lead up to the next mid-term plan. Tourist sustainable growth based on the revenue-based transition by the profitability enhancement measures will generate stable profits in the new housing business and drive growth of renovation and the residential business. And that's all for housing company. Thank you.

This is Yoshiyuki Hirai, company president of UIEP. I will start my explanation from page 38, showing the performance trend. For FY24, net sales were 240.5 billion, with OP of 23 billion yen, and the operating margin of 9.5%, which were all new record highs. Despite sluggish residential and non-residential markets, we secured sales and profit growth by improving the selling prices and expanding sales of prioritized products. For the OP, we renewed the record highs for three consecutive years. And FY25 will continue to grow the sales of prioritized products, increase overseas sales, and thoroughly secure spreads, aiming for net sales of 251.8 billion and OP of 26 billion yen, which will be record highs for the fourth consecutive year, an operating margin of over 10%. Page 39 is the FY24 results analysis. Three consecutive years of sales and profit growth were achieved by annually offsetting the higher total costs, including raw materials and fixed costs, by improving selling price, as indicated on the right. On the other hand, the results fell significantly short of the January guidance. The main factors were construction delays due to overtime restrictions in the industry, drop in orders and delays in pipeline renewal work in Japan and overseas, among others. We recognize that the subsequent year-on-year decline in the volume and mix factor is a major challenge for us. Page 40 shows the plan for FY25. First, the domestic market. We expect both residential and non-residential market to be flat year-on-year, but we are planning for sales and OP growth that will renew the previous record highs. As for the factors behind the OP change shown on the right, we plan to offset the negative impact of raw material and fixed costs by volume in mixed contribution mainly in the second half as well as improving the selling prices. For sales volume in product mix, our efforts in Japan will be to expand the sales of prioritized products, such as earthquake-resistant PE pipes and fire-resistant products. Overseas, we'll focus on expanding sales of new CPVC products and acquiring new orders for FFU and pipe rehabilitation. Pipe sales related to semiconductor plants are also expected to grow in the second half. Improvements in selling prices achieved in the second half of last fiscal year will contribute in the first half of this year. Page 41 illustrates the three strategic fields. First, the pipe systems at upper left. We expect sales to be down in the first half and up in the second half. The piping market is anticipated to remain flat year-on-year in the residential and non-residential sectors, while capex demand is expected to recover in the second half. We aim to grow the sales of prioritized products and work tenaciously to secure spreads. For CPVC, in our main market India, the channel inventory is expected to remain high in the first half. As such, we do not expect significant growth for the full year, but will strive for market share gains with new products that are competitively priced. In building and infrastructure composite materials at upper right, we plan for sales growth in both the first and the second half through FY25. We continue to expand new applications for fire-resistant and non-combustible materials, and work to secure orders for FFUs, for which inquiries are increasing due to the presence of a European plant. In Unit B, the focus is on capturing demand for nursing care and renovation. For infrastructure renovation at lower left, the plan aims for sales growth in both the first and the second half of this year. In the pipe renewal business in Japan, we'll focus on wedding projects that emerge from nationwide checks and overseas, we'll focus on acquiring new orders through collaboration with construction partners. For ecosystems, we'll focus on orders for large projects such as factory facilities as well as water storage panel tanks. in the growth area as shown on the bottom right, will continue to grow the sales of the prioritized products. Some product growths were newly added this fiscal year, so the growth appears to be significant. We'll focus on increasing adoption of products that contribute to disaster prevention and mitigation, such as earthquake-resistant PE pipes, fire-resistant products, and pipe renewal materials. Overseas sales of vibration will be driven by new CPVC products and FFP railway sleepers. Sales in the growth-driving business segment saw a slowdown in the second half of FY24, but with preparations progressing smoothly, we'll strive to achieve our targets for FY25. That concludes my presentation. Thank you for your attention.

I am Takahashi from Sekisui Medical. Page 43 for performance trend. In FI 2024, sales of infectious disease testing kits in the U.S. remained strong, while mainstay pharmaceutical ingredient API sales expanded and drug development solutions order trended solid. As a result, we achieved record high sales and profit, with net sales of 99.2 billion yen and operating profit of 12.8 billion yen. In FY 2025, we work to capture diagnostics demand in Japan and overseas and strengthen efforts to capture new orders in the pharmaceutical science business while targeting record high net sales of 102.2 billion yen and operating profit of 14.5 billion yen for a second consecutive FY. Page 44 shows FY2024 result analysis. As shown on the left, net sales were 99.2 billion yen up by 6.6 billion yen from the previous year. Excluding the sales of infectious disease testing kits, net sales increased by 3.1 billion yen as shown in the parentheses. Operating profit increased 1.6 billion yen year on year to 12.8 billion yen thanks to a major increase in the sales of infectious disease testing kits in the U.S. in the overseas diagnostics business, as well as strong sales of mainstay API in the pharmaceutical science business. In addition, fixed cost reductions in Japan and overseas led to overshooting of the January forecast, resulting in an increase of both sales and income. Next, page 45, our review of FI25 plan. On the left, sales is planned at 102.2 billion yen, up by 3 billion yen from the previous year, and sales excluding infectious disease testing kits are expected to grow by 2.7 billion yen. Operating profit to the right is planned to grow by 1.7 billion yen to 14.5 billion yen. Although we expect a decrease in shipments of some products to major customers in the U.S., we steadily capture domestic demand for diagnostic reagents and continue to focus on acquiring new orders in the pharmaceutical science business and so on. As such, we aim for the second consecutive year of record high profits. Finally, page 46 for overview by business. To the left-hand side, in the domestic diagnostic business, we've steadily captured demand mainly for immunology testing in FY2024. For FY25, we launched an advanced model of our mainstay automated blood coagulation analyzer in Japan on the 23rd of this month. While responding to customer needs, we also focus on expanding sales of instruments and reagents in the blood coagulation area to capture further demand for testing. Next, in the upper right, overseas diagnostics business. In FY24, we were affected by a declining demand for testing in China due to its preferential treatment of domestic products, but we grew sales significantly by expanding sales of infectious disease testing kits in the U.S. to compensate for the drop. In FY25, although we expect impact of a shipment decline in some products for major customers in the U.S., in China, we plan to launch a new model for blood coagulation. We'll continue to acquire new customers by enhancing our instruments lineup. Left bottom-hand side, in the pharmaceutical science business, sales of mainstay API and contract research in the drug development solutions business were strong in FI24, and we stay focused on acquiring new orders in FI25. Finally, the bottom right shows the sales trend of our priority infectious disease testing kits. In FI25, we continue to steadily capture demand for testing as we did last year. And that's all for medical business. Thank you.