Dear Shareholders and Investors
Currently, the spread of the novel coronavirus is affecting regions around the globe. We hereby express our wholehearted sympathy to all those infected with the coronavirus and those who face significant hardship and inconvenience due to the restrictions on daily life. We also wish to thank frontline medical practitioners, government officials and municipal staff and express our deep respect and sincere gratitude for their dedication in a grueling battle against the unprecedented pandemics.
In the fiscal year ended December 31, 2020 (“fiscal 2020”), the global economy rapidly declined due to the worldwide spread of COVID-19 at the beginning of the year as the prolonged trade war between the United States and China and emerging geopolitical risks around the globe caused global trade to shrink.
Amid this environment, to support industrial supply chains, the Group maintained business activities after ensuring safety and taking thorough measures to prevent the spread of infection.
The Group’s long-term vision, Kuraray Vision 2026, is to become a “Specialty Chemical Company, growing sustainably by incorporating new foundational platforms into its own technologies.” With the aim of realizing this vision, we will steadily take specific measures in line with the key management strategies underlined in the medium-term management plan “PROUD 2020.” Through these efforts, we will also continue working to establish a new business portfolio from a medium- to long-term perspective.
In fiscal 2020, demand for products used for electric, electronic, and food packaging applications remained steady even during the pandemic. However, demand for products for automotive and construction applications plunged, and, despite gradually recovering from the second half of the fiscal year, demand for the full year was much lower than in the previous year. Consequently, consolidated operating results for fiscal 2020 are as follows: net sales decreased ¥34,009 million, or 5.9%, compared with the previous fiscal year to ¥541,797 million; operating income fell ¥9,831 million, or 18.1%, to ¥44,341 million; ordinary income decreased ¥8,530 million, or 17.7%, to ¥39,740 million; and net income attributable to owners of the parent totaled ¥2,570 million (compared with net loss attributable to owners of the parent of ¥1,956 million in the previous fiscal year).
In fiscal 2020, Kuraray recognized a loss on litigation of ¥23,196 million which has been classified as an extraordinary loss mainly in connection with a fire in May 2018 at a group subsidiary in the United States.
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.
January 1, 2021
Representative Director and President