Message from the President

Dear shareholders and investors,

In the second quarter of fiscal 2019 (January 1, 2019–June 30, 2019), the world economy showed deepening sense of deceleration due mainly to a contraction in trade caused by intensifying U.S.-China trade friction, slowing economic growth in China, prolonged political turmoil in Europe, and rising geopolitical risks in the Middle East even various countries came out economic stimulus policy . Consequently, consolidated operating results for the second quarter of fiscal 2019 are as follows: net sales decreased ¥13,963 million, or 4.6%, compared with the previous fiscal year to ¥287,419 million; operating income fell ¥8,348 million, or 23.0%, to ¥27,921 million; ordinary income decreased ¥9,885 million, or 28.6%, to ¥24,685 million; and net income attributable to owners of the parent dropped ¥9,334 million, or 41.3%, to ¥13,254 million.

The Kuraray Group launched the medium-term management plan “PROUD 2020” from fiscal 2018. In fiscal 2019, the second year of the plan, the Group aims to achieve its long-term vision of becoming a “Specialty Chemical Company, growing sustainably by incorporating new foundational platforms into its own technologies.” We will steadily take specific measures related to the key management strategies underlined in the plan. We will also continue working to establish a new business portfolio from a medium- to long-term perspective.

In addition, the distribution of profits to shareholders is one of the Company’s top management issues. Kuraray will continuously and stably pay out dividends, taking into consideration business performance and financial standing while carefully securing internal reserves, which are its primary source of funds for business development.

During "PROUD 2020," the Medium-Term Management Plan for fiscal 2018 through fiscal 2020, the Company will uphold a basic policy of increasing the distribution of profits through continuous improvement in business results. It has set targets of a total return ratio of 35% or more, reflecting net income attributable to owners of the parent, and annual dividends per share of ¥40 or higher.

On behalf of Kuraray, I would like to extend our gratitude for your continued understanding and generous support.

August 8, 2019
Masaaki Ito
Representative Director and President