Sekisui Chemical Co

I am Keita Kato, President and CEO. Thank you very much for joining us today despite your busy schedule. Please turn to page 1. Here are the key points of today's presentation and the messages that I wish to convey. Let me start with the first half results. We started the first half amid an uncertain market environment, partly due to the impact of the U.S. tariff policies. Despite this, we believe our efforts and preparations eyeing next fiscal year and beyond, including our focus to shift toward high-performance products, progressed largely as planned. However, the deterioration in certain markets, particularly the auto sector, was greater than anticipated, resulting in operating profit falling short of the July forecast. For the second half, we continue to anticipate growth in net sales and each profit lines. The full year guidance was revised up based on the first half results. While operating profit will fall short of the target set for the final year of our mid-term plan, we expect to achieve record high profits. We will return to steady growth trajectory in the second half and step up our efforts in development and preparations aimed at sustainable growth for next fiscal year and beyond. Later, I will also talk about the perovskite solar cell business. And our last item on this page is shareholder returns. In the first half, we repurchased and canceled 4 million shares. For dividends, we plan an annual dividend of 80 yen per share as previously announced, achieving a hike of 1 yen per share and 16th year of consecutive dividend increase. Furthermore, at today's Board of Directors meeting, additional share buyback initiative was approved. Our intention is to maintain sufficient cash for future growth while actively returning profits to shareholders. This will bring our total return ratio for the current fiscal year to approximately 100%. Page 2, please. I'd like to share some information on our Provesky Solar Soul business, which we position as a key growth theme. This October, the acquisition of Sharp's Sakai plant and machine installation were underway as planned. The schedule for the production line buildup remains unchanged from what was presented at the previous results briefing. With plans to commence operations of a 100MW production line in FY27. We also plan to start product sales within this fiscal year. At the Expo 2025 Osaka, as noted in the lower left, we confirmed full power generation during the event period and nighttime LED lighting using our film-type solar cells installed on the bus terminal roof. We will continue our efforts on development and production line launch to advance to commercialization. Now that concludes my remarks. Thank you very much. Yes, I am Tatsuya Nishida, head of corporate finance and accounting department. I will walk you through the first half results. Page 3, the actual effects for the first half are as stated. Page 4 is the overview of the profit and loss. In the first half, net sales reached 629.8 billion yen, setting a new record high. OP, however, was significantly impacted by deterioration in some markets, resulting in a profit decline to 45.4 billion yen, falling short of the July forecast. Ordinary profit increased to ¥49 billion year-on-year, benefiting from improved foreign exchange gains. However, net profit decreased to ¥31.7 billion, impacted by the absence of last year's stock sale gains. The interim dividend will be ¥40 per share, an increase of ¥3 as guided in July. Page 5 shows the segment results for the first half. Although the housing company achieved higher profits, it was insufficient to offset declines in HPP and medical business, resulting in sales growth but profit decline for the group. Compared to the July forecast, the slowdown in certain markets within the mobility segment of HPP had a significant impact, leading to results below expectations for the entire group. The segment details will be provided later.

breakdown of the other segment is as shown on the slide and we will continue to invest a next generation business such as perovskite solar cells page 6 shows results for q1 and q2 while july forecast is not shown here the housing segment exceeded both plan and forecast in q2 as well as q1 Moving on to page 7, analysis of the first half results. Left shows net sales, which increased by 700 million yen year-on-year to 629.8 billion yen. The right shows OP analysis. The significant impact of stagnation in the part of auto market and continued downtown in domestic and international market led to a substantial deterioration in sales volume and product mix compared to the July outlook. While we tried to secure spreads between selling price and raw materials to control fixed cost, OP fell below the July outlook, resulting in a decline. Page 8 is revised second half plan. Now, starting with exchange rate assumption, it is set at 148 yen for a dollar. This assumes a slightly stronger yen compared to the initial assumption. Page 9 is outlook for market conditions. Top left, number of global automotive production in Q2 was slightly below the previous year, as expected, for Q3 onward is expected to stay below the April assumption. Bottom left, Smartphone shipments in Q2 were in line with the previous year as expected. Q3 shipments are expected to be slightly below expectations but on par with the previous year, while Q4 is expected to slightly exceed the previous year. Top right is number of visitors. for housing. In the first half, exhibition visitors dropped significantly, and overall visitors remained below previous year level. We don't expect recovery in the second half, and it will remain below the previous year's level. Regarding housing starts, while some said second half of last year have seen a surge in demand, we expect the downward trend to continue. Bottom right is domestic NAFTA. We anticipate Q2 to be in line with expectation, yet fall below expectations from Q3 onward. Page 10 is Second Half Revised Plan by Segment. For the second half, we plan net sales of ¥693.4 billion, NOP of ¥64.6 billion, aiming to new record highs respectively. It's a ¥5.3 billion increase in profit year-on-year, and we plan to secure profit growth across all four segments. The other segment is, as stated, will continue planned investment in the second half. Page 11 is second half revised plan analysis. Left side is net sales, which is projected at 693.4 billion yen, an increase of 24.7 billion yen. The right is OP. Although volume is significantly lower than the April plan, product mix improves due to larger sales of high-performance products, resulting in substantial YOY increase. High-performance plastics and housing will continue to drive its growth. We stay focused on improving selling prices, securing spreads through favorable raw material costs and controlling fixed costs. The revised plan is 64.6 billion yen, up by 5.3 billion yen year-on-year. Page 12 is revised 4-year plan. By segment, we plan growth in revenue and profit in three segments excluding medical business. Company-wide net sales is planned at ¥1,323.3 billion up by ¥25.4 billion YOY and OP plan is ¥110 billion, an increase of ¥2 billion year-on-year. Page 13 is summary of the revised four-year plan. We aim for record high profits in both OP and ordinary income, 110 billion for OP and 112 billion for ordinary income. Net income is expected at 72 billion. Dividend will increase by 1 yen per share as planned to 80%. yen annually, marking the 16th consecutive year dividend growth. Furthermore, we conduct another share buyback of 10 million shares, making total amount of share buyback of this fiscal year to be 14 million shares, finally consolidated performance on page 14. Although this provision makes it not possible to reach our midterm target, we believe our earning power is steadily strengthened as evidenced by the continued expectation of record high EBITDA. Looking ahead into the next MTP, starting next fiscal year, we'll continue to focus on readiness and growth. Thank you.

I am Akira Asano, Company President of HPP. Let me update you on HPP's business. First, on page 16. This shows the trend of the company's performance since FY21. For the first half of FY25, while both the electronics and industrial business performed solidly, mobility was impacted by slower-than-expected growth in the EV market and recovery in Europe. As such, results fell short of the July guidance. For the second half of FY25, we expect continued strength in the electronics and industrial fields. In mobility, growth in head-up display which films is projected to continue, and we project year-on-year growth in both net sales and profit, aiming for record high profits for the second half and the full fiscal year. Next on page 17, I will explain the performance for the first half of FY25 and the year-on-year change. While both the electronics and industrial business performed firmly, mobility was impacted by the slowdown in EV market, resulting in sluggish trend for designed interlayer film. As such, sales volume and product mix contribution did not expand as much as the July projection. Furthermore, to settle a dispute related to resin sales in Europe, we recorded a total one-time expense of 2 billion yen in the second quarter, including the 1.3 billion yen projected at the time of the Q1 results. While selling price factor improved largely as forecast in July, fixed costs such as investments in development and human capital increased. Net sales grew by 2.4 billion yuan a year to 223.5 billion yuan, and OPA declined year-on-year by 1.5 billion to 28.4 billion yuan. However, excluding on the 2 billion won of expense, operating profit actually increased year on year. We therefore view the overall business as expanding steadily. Page 18 shows the analysis of the revised plan for the second half of FY25 and factors behind the change compared to the previous year. We expect continued solid performance in the electronics and industrial fields. In the mobility field, we anticipate further growth for NHPP films, particularly the head-up display wedge films. Furthermore, aircraft-related demand, which is on a recovery trend, is expected to continue growing. Through improvement in selling price, raw materials, and control over the fixed cost, we project sales to be up by 14.1 billion yen or near to 240.4 billion yen and OP to increase by 2 billion to 33.4 billion yen, marking the third consecutive year of record high profit for the second half and the full year. Lastly, on page 19, let me explain the trend in sales and KPIs through the three strategic fields. First, in the electronics field, the smartphone and semiconductor markets remain robust. We anticipate continued growth in the second half of FY25, following the trend in the first half. We'll continue to focus on expanding market share and winning new business in the non-LCD field, mainly driven by advanced semiconductors. For heat release materials, expansion into the electrical equipment application, primarily for chip testers, is progressing and we will pursue further sales growth. In the mobility field, while the slowdown in the EV market is expected to persist, leading to continued weakness in designed films, sales expansion of NPP films, particularly for head-up displays, is projected to continue. In the aircraft business, Sekisu Aerospace is expected to make profit contribution throughout the year, driven by steady progress in customer production rate recovery and securing new businesses. In the industrial field, although the domestic market remains stagnant, we anticipate steady growth in the second half due to progress in improving selling prices and the steady expansion of labor-saving, environmentally-friendly products, including sensors and care materials. We'll continue to focus on maintaining the spread while expanding our strategic business. This concludes my explanation. Thank you very much.

I am Yoshida, President of Housing Company. Now let me offer you the presentation of our company. Please refer to page 21. First, here is the first half result and revised second half plan. Regarding the first half, despite weak new housing market conditions, we increased revenue through improved product mix in the housing business and expanded orders in the renovation business. OP achieved a significant increase, surpassing the July forecast driven by higher sales and reduced fixed cost. For the second half, we plan for an increase in net sales exceeding April forecast through higher unit price by expanding sales of high-end products and growing the renovation business. Now, page 22 is first half result analysis. The left graph shows net sales, housing, renovation, and residential business secured revenue growth. Overall, it increased by 5 billion yen to 258.6 billion yen. To the right, we have OP analysis. For the housing business, although the number of units sold fell short of the forecast of 60 units, this was offset by improved product mix, cost reduction and fixed cost control, resulting in a ¥0.9 billion increase in profit. In the renovation business, marginal profit grew thanks to strengthened sales capabilities, resulting in a ¥0.7 billion increase in profit. overall we achieved 16.3 billion yen op exceeding the july forecast by 1.7 billion yen page 23 is revised the second half plan On the left is net sales. For the housing business, we do not anticipate a market recovery in the second half and are planning for sales to be on par with the previous year. On the other hand, the renovation business is expecting a continuous growth, and overall we plan for revenue to increase by ¥3.4 billion to ¥273.8 billion. On the right, OP. We plan for an overall increase of ¥3.8 billion to ¥20.7 billion. In the housing business, we plan to offset the impacts of reduced sales volume and rising material cost through improved product mix, cost reduction initiatives, and fixed cost control, resulting in a ¥2.5 billion increase in profit. We'll strengthen product strategy per region. For urban areas, we launched our high-end flagship model, Elvia, today. We'll intensify proposals targeting affluent customers. For the renovation business, we plan to increase profit by 1.6 billion yen through expanding orders by enhancing periodic diagnosis and strengthening proposal capabilities while also promoting workload labeling by improving progress management. Finally, page 24 shows KPIs by business. First, upper left is new housing orders. In the first half, both order value and units progressed almost as per July forecast. In particular, sales of high-priced products like apartment buildings expanded nicely, securing the similar order value as the previous year. For the second half, while we do not expect market recovery, we plan to achieve a 3% growth in order value year on year by strengthening orders for high-end products. Next, in the middle section is the breakdown by building type. Detached housing struggled in both rebuilding and the new construction, but we expect apartment buildings to remain steady heading into second half. Regarding the end of the period order balance below, the first half saw an increase of 6.5 billion yen YOY as order amounts were secured at the same level as the previous year. For the second half, we'll focus on securing order backlog for the following year by achieving our order targets. Next, on the right, is the orders by unit price and price range. We are seeing upward trend in unit prices on the back of increased value added in detached housing and strong performance of three-story apartment buildings. The ratio of high-end products over 50 million yen is also steadily increasing. In the second half, we'll focus on the sales expansion of Elvia and continue aiming to increase unit prices. Next, in the lower left, The renovation business efforts to secure and strengthen sales personnel have borne fruit, leading to growth in orders originating from periodic inspections or diagnosis. Installation renovations centering around openings are also progressing steadily. For non-Heim owners will further grow sales capacity by increasing dedicated personnel to sustain growth in the second half. To the right is the residential business. In the real estate business, we'll expand our operations by increasing the number of dwelling units under management and expanding brokerage services while strengthening preparations for buy and sell and asset businesses. Finally, the town and community development business. While sales progress has been delayed for some projects in suburban areas, we'll focus on selling properties up for handover this fiscal year while also continuing to strengthen the preparation for new projects. That concludes my presentation.

This is Yoshiyuki Hirai, company president of UIEP. I will start my presentation on page 26. This is a recap of the FY25 first half results and the plan for the second half, which was revised. In the first half, despite maintaining spreads with new pricing, the impact of the sluggish market was significant, resulting in decline in net sales to 112.1 billion and drop in OP to 8.1 billion yen. For the second half, while challenging conditions such as long-going construction periods due to labor shortages will persist, we plan to achieve higher sales and profit with sales of 135.1 billion and OOP of 16.7 billion yen by expanding sales of prioritized products and overseas business. Achieving this plan would result in full-year OOP of 24.8 billion yen, marking the fourth consecutive year of record highs, and operating margin reaching 10% for the first time. Next on page 27 is the analysis of the first half results. As noted on the left, net sales were 112.1 billion down by 1.4 billion yen year-on-year and falling short of the July forecast by 2.8 billion due to reduced construction site operations in Japan caused by the intense heat and sluggish Indian construction market overseas. The OP waterfall chart on the right shows a significant decline in both volume and mix due to lower sales that I explained earlier. Furthermore, as communicated in July, we recorded repair costs for specific products as one-off charge. We also made steady progress in expanding sales of prioritized products and getting acceptance on new pricing. While striving to control fixed costs, the OP fell short by 400 million yen. Nevertheless, excluding the one-time repair cost of 500 million yen, the result exceeded the previous year. Next, page 28 shows the analysis for the revised second half plan. On the left is the sales projection of 135.1 billion, an year-on-year increase of 8.1 billion yen. Growth will be driven by key products in our growth-driving businesses, fire-resistant pipes, fire-resistant and non-flammable materials, pipeline renewal products and FFV or sleepers for the overseas market. As shown on the right, OP is projected to grow by 2.3 billion yen a year to 16.7 billion yen. We expect the market to remain largely unchanged from the first half. While FWACS will be unfavorable for the coordinated PVC business, we will rigorously maintain spreads and grow volume, focusing on key products from the growth-driving businesses. Lastly on page 29 is a snapshot of the three strategic fields. For pipe systems at top left, the plan calls for sales decline in the first half and the sales growth in the second half. The first half was challenging for pipe materials due to chronic labor shortages and longer construction periods caused by extreme heat, while CPVC faced intensified competition from subdued construction demand in India. For the second half, we aim to expand sales of prioritized products and increase market share with new CPVC formulations. 5-2 in Thailand for the CPVC resin compound is scheduled for completion in January 2026. In the building and infrastructure composite materials at upper right, model sales growth in the first half and concrete growth in the second half are projected. In the first half, fire-resistant non-flammable materials and overseas FFU performed steadily, but construction materials faced challenges due to lower housing starts. In the second half, for fire-resistant non-flammable materials, we'll focus on new customer acquisitions and launching three new products. For railway sleeper FFU, We aim to expand adoption primarily in Europe and the U.S. Infrastructure renovation at bottom left is expected to achieve sales growth in both halves. Aqua systems saw steady progress on large-scale plant equipment projects. Pipeline renewal will focus particularly on securing projects in Japan arising from the results of special inspections. Bottom right are the growth areas, and sales of prioritized products grew steadily in the first half, owing to firm trends in fire-resistant, earthquake-resistant polyethylene pipes. With successful design inactivities, we expect further growth in the second half. Overseas, sales declined in the first half due to challenges with chlorinated PVC in India, but we aim for recovery in the second half with new compound products. In the west, we anticipate growth driven by FFU. Sales for growth-strapping businesses are outstated. That concludes my explanation. Thank you.

I am Yamashita. I assumed the position of President of Sekisei Medical in July this year. Now, I will explain the overview of medical business. First, page 31 shows the performance trends. And second half revised plan. For the first half of FY25, actual sales was 44.3 billion yen and OP was 4.5 billion yen, indicating a YOY decrease in both sales and profit. In the first half diagnostic business, demand for test kits remained sluggish due to delayed timing of infectious disease and the worst unexpected deterioration of overseas market, resulting in performance below the July forecast. For the second half of FY25, we anticipate a slight drop in demand for infectious disease testing in Japan and the U.S. compared to our April projections. We also expect that China market to stay sluggish. Consequently, we have revised down our second half sales forecast to 50.3 billion NLP to 6.9 billion yen from the April plan. Next, page 32. I will explain the result analysis for the first half. Sales was 44.3 billion yen down by 3.6 billion yen year on year. OP was 4.5 billion yen, a decrease of 1.4 billion yen. Analysis of OP is shown to the right. For domestic diagnostics, demand for test kits decreased due to the delayed timing of infectious disease. For overseas diagnostics, the termination of a U.S. government project that existed last fiscal year combined with the delayed timing of the infectious disease impacted result. In China, the health care cost containment measures also had impact on result. The pharmaceutical science business remains solid, but some projects have shifted to the second half. Again, under such circumstances, we've controlled fixed cost. However, on revenue and the profit side, we've seen decline falling below the July forecast. Page 33 is the revised plan for the second half. For the sales, we have revised the plan to 50.3 billion yen, down by 1 billion yen from the previous fiscal year. For OP, we have revised the plan to 6.9 billion yen, an increase of 100 million yen. Regarding the analysis of OP, domestic testing demand centered on infectious disease has declined slightly. And for overseas diagnostics business, the U.S. has revised downward its forecast for infectious disease outbreaks compared to the April plan while China continues to be impacted by healthcare cost containment measures. For pharmaceutical science business, we expect profit growth due to steady sales of key APIs and the carryover of the project delayed from the first half. We plan to control fixed cost in the second half to secure profit growth. Finally, page 34 shows overview by business. First, regarding the domestic diagnostics in the upper left, demand for testing kits in the first half fell short of expectations due to the delayed spread of infectious diseases. In the second half, we'll continue to capture testing demand, focusing primarily on immunology items. overseas diagnostics in the upper right. The first half was significantly impacted by the delayed timing of the infectious diseases in the U.S. and the deterioration of China market. For the second half, we'll focus on sales expansion of new infectious disease products in U.S. and controlling the fixed cost while prioritizing a cost reduction in China. Finally, pharmaceutical science in the lower left. In the first half, sales of key APIs and contract testing exceeded last year's result. We'll continue to focus on new business acquisition in the second half. That concludes my part in medical business.