Sekisui Chemical Co., Ltd.

I am Shimizu. Thank you very much for joining us today despite your busy schedule. Now, let me begin my presentation. Page 1. Here, we have summarized the key points of today's presentation, especially the message I would like to convey. First, regarding our performance for the first half. We started the first half amid an uncertain market environment due to the worsening situation in the Middle East. Against such circumstances, we steadily addressed raw material and component procurement constraints and promptly passed on higher costs to prices. Thank you for watching. M&A investment centering housing businesses in growth-expected areas also progressed steadily, and Nishida will explain about this later on, but regarding LB business, we've decided to withdraw. For the second half... We anticipate a sudden reaction to the front-loaded demand of the first half. While focusing on the development and preparations for further growth from the next fiscal year onward, we expect increased sales and OP. For the full year, we aim for a substantial increase in sales and profit, record full-year profit with net sales of 1 trillion and 491 billion yen, NOP revised upward by 8 billion yen from the April plan to 123 billion yen. The last part of this page is concerning shareholder returns. Based on our first half result, we will set the interim dividend at 41 yen per share, an increase of 1 yen from the July forecast. We plan an annual dividend of 82 yen, an increase of 2 yen, marking 17 consecutive periods of increased dividend. We'll continue to aim for both aggressive investment and returns. Moving on to page 2, I would like to explain the progress of our film-type pyroviscite solar cell business. As for sales, starting from this fiscal year, we've delivered a total 8 units to 4 municipalities, focusing mainly on metal roof of public facilities with low load-bearing capacity, as shown here. In addition, we've decided to invest 9.5 billion yen in production technology innovation for further performance improvement and cost reduction. We'll continue full efforts to establish the Sakai 100 MW line toward product supply launch in the first half of FY2027. That concludes my presentation. Thank you very much.

Hello, I am Nishida. Next, I will explain our first half results. Page 3 shows the actual exchange rates. Page 4 is the overview of our first half financial results. In the first half, net sales, operating profit, and ordinary profit all reached record highs. We recorded 5.1 billion yen in extraordinary losses to replace defective batteries sold in the past. and 2.6 billion yen for asset disposal, mostly inventories, and other costs related to our withdrawal from this business. And this was mostly recorded in the first quarter. As a result, net profit was 34.8 billion yen, up 3.1 billion yen year over year. Next please go to page 5. This page shows first half results by segment. All segments achieved higher sales and profits. On a company-wide level, both sales and profits rose significantly, exceeding our July forecast. Operating profit reached record highs in high-performance plastics, urban infrastructure and environmental products, and company-wide. As mentioned earlier, we decided to exit the LB business in the other segment after assessing its profitability and future prospects. We will explain each segment in more detail later. Page 6 breaks the results down by the first and second quarters. In high-performance plastics and urban infrastructure and environmental products, the second quarter demand pullback was milder than expected. For housing, profits were weighed towards the first half last year but are expected to shift to the second half this year. Partly due to opening order backlogs, medical profit declined in Q2. Both were broadly in line with our July forecast. Next, page 7 analyzes our first half results. On the left, sales increased by 71.9 billion yen year-on-year to 701.7 billion yen. On the right, higher raw material costs from the worsening situation in the Middle East were offset by higher selling prices improving margins. We also captured strong demand for high-value added products, including electronics and aircraft-related products in high-performance plastics. By responding effectively to raw material procurement difficulties and demand brought forward, we achieved a substantial increase in volume and product mix. Cost control also contributed, and results came in well above our July forecast. From page 8, I will discuss our revised plan for the second half. We assume this exchange rate as you can see. Page 9 shows our market assumptions. In the top left, smartphone shipments were below the previous year's level in Q2 as expected. We expect a slight recovery from Q3 onward, but shipments are still forecast to remain below last year. At center left, we expect the semiconductor market to remain at a high level. In the bottom left, global automobile production was broadly in line with expectation in Q2, but from Q3 onward, we expected to be below both our previous assumptions and last year's level. In the top right, housing visitors. Showroom visits declined in the first half, and overall visitors were below last year's level. We expect this trend to continue from Q3 onward. Housing starts are expected to increase slightly year on year this fiscal year, but in the mid-term, the gradual downward trend remains unchanged. In the bottom right, domestic NAFTA prices turned downward in Q2, but are still expected to be well above our initial assumptions. Page 10 shows the revised second half plan by segment. We expect net sales and profits to increase in the three segments other than urban infrastructure and environmental products company as well as company-wide with record high profits. We expect some pullback in high-performance plastics and urban... For the second half, we plan sales of ¥789.3 billion and operating income of ¥62.6 billion, aiming for record highs in both. Other segment is as shown. We will continue upfront investments slightly above our April plan. Page 11 analyzes the revised second half plan. On the left, sales are projected to increase by 109.8 billion yen to 789.3 billion yen. This increase includes approximately 55 billion yen from new M&A in the housing business this fiscal year. On the right is operating profit. Volume and mixer expected to fall short of the April plan due to a pullback from the first half level and fewer housing units sold. However, we expect year-on-year growth led by high-performance plastics. We expect higher raw material costs to continue, but will seek to offset them through selling prices. We expect fixed costs to rise due to spending in growth areas, including M&A-related expenses. Meanwhile, exchange rates and the impact of new M&A on the left-hand side are expected to contribute positively. Overall, our revised plan is operating profit of ¥62.6 billion up ¥1.5 billion year-over-year. Page 12 shows our revised full-year plan. We expect sales and profits to increase in every segment and company-wide. We are also raising our operating income forecast from the April plan. High-performance plastics, urban infrastructure and environmental products, and the company as a whole are expected to achieve record high profits. Page 13 summarizes our full-year profit plan. We aim for record high operating profit of 123 billion yen and ordinary profit of 122 billion yen. Despite this year's extraordinary losses and last year's gains from share sales, we expect net profit to rise to 76 billion yen. We plan to raise the annual dividend by ¥1 from our April plan to ¥82 per share, making the 17th consecutive year of dividend increase. Finally, page 14 shows our consolidated performance trends. In this first year of our midterm plan, we will steadily progress towards our FY28 operating profit target of ¥150 billion. With EBITDA expected to reach another record high, we believe our earnings power to steadily strengthening. We will continue to allocate management resources to investments that lay the groundwork for future growth. Thank you very much.

I am Asano, president of the high-performance plastic company. Thank you for your time today. I will now explain the overview of our company. First, please look at page 16. This shows our company's performance trend since FY 2022. For the first half of FY2026, the electronics field was driven by robust semiconductor demand. The mobility field grew on firm aeronautical applications, and the industrial field saw front-loaded demand due to worsening conditions in the Middle East, resulting in increased sales and profit across all three fields, with the first half result reaching record highs of 264.2 billion yen, Net sales and 38.3 billion yen in OP. Now, on the other hand, for second half FY26, gross markets in the electronics and mobility fields are expected to remain firm, similar to the first half. And in the industrial field, despite a negative rebound to the first half front-loaded demand, we aim to increase net sales and OP year-on-year, Next, page 17 explains the first half Fi26 performance and YOY variance. First, regarding volume and mix, we achieved growth exceeding July forecast in all three strategic fields. Growth was particularly driven by semiconductor-related products in the electronics field and aeronautical components in the mobility field. In the industrial field, general consumer goods such as tapes and adhesives also grew more than expected. Compounded by front-loaded effect to secure products ahead of the worsening Middle East conditions. And higher raw materials costs from soaring NAFTA prices were offset by agile selling price improvements, and fixed costs were compressed below July forecast, resulting in a YOY sales increase of 40.6 billion yen to 264.2 billion yen and OP increase of 10 billion yen to 38.3 billion yen. Next, page 18 explains the variance compared to the previous year for the second half of FY2026 revised plan. As for volume and mix, while we expect a reaction to the first half demand in social infrastructure field who is renamed from the industrial field starting in the second half, the electronics field can expect continued expansion of related products driven by robust semiconductor demand In the mobility field, in addition to capturing firm demand for aeronautical components, we expect growth in NHPP films centering on HUD wedge-shaped films, supported by increased adoption of color and design film for EVs in the auto market. On the other hand, regarding raw materials cost, while selling price improvement progressed in the first half, NAFTA price may remain high due to worsening Middle East conditions, and we factor in worsening impact from U.S.-Canada tariff effect, expecting impact amount to be larger than the first half. We've also factored in an increase in fixed cost resulting from Bringing forward gross preparations for sales expansion from the next fiscal year to respond to raising semiconductor demand for which further market expansion is expected. Consequently, our revised plan targets net sales of 266 billion yen, YOY increase of 33 billion yen, NOP of 33.2 billion yen, YOY increase of 2.2 billion yen, aiming for record high profits in both second half and full year. Finally, page 19 explains net sales in three strategic fields and trends in KPI. First, electronics field. While products for LCD remain firm, semiconductor market is expanding rapidly and we expect significant growth in the second half following the first half. We'll focus particularly on increasing demand and market share in the non-LCD field centering on high-performance semiconductors as well as on winning new orders. We'll also work to further expand heat dissipation materials as their adoption progresses in semiconductor inspection equipment and electrical components. On the other hand, in the mobility field, which sees continued weakness in automobile production volume, mainly in China, first half sales struggle to expand for NHPP films other than HUD wedge-shaped films. However, from the second half onward, since the number of vehicle models adapting color and design films is expected to increase, we'll continue to focus on expanding the sales of NHPP films centering on HUD films. In aeronautical applications, customer production volume increases, higher added value, and the acquisition of new air mobility customers are progressing smoothly and further sales expansion is anticipated. In the social infrastructure field, although a reaction to the first half front-loaded demand is expected for the general consumer goods, we expect a certain growth in the second half as well, I am Yoshida from the housing company. I would like to start my presentation. Please turn to page 21. First, I will review the first half results and the revised plan for the second half.