Message from the President

Dear Shareholders and Investors

In the second quarter of fiscal 2018 (January 1, 2018–June 30, 2018), the world economy grew favorably overall, especially in Europe and the United States. However, the outlook remains murky because of the Trump administration’s sanctions and tariffs under its America-first policy and the retaliatory measures of affected countries.

In the chemicals industry, although demand continued to expand, buoyed by favorable economic conditions in developed and emerging countries, corporate profits were held down, partly due to higher raw material and fuel costs.

Consequently, cumulative consolidated operating results for the second quarter of fiscal 2018 are as follows: net sales rose ¥50,042 million, or 19.9%, compared with the previous fiscal year to ¥301,382 million; operating income grew ¥407 million, or 1.1%, to ¥38,188 million; ordinary income decreased ¥48 million, or 0.1%, to ¥36,490 million; and net income attributable to owners of the parent fell ¥387 million, or 1.6%, to ¥23,822 million.

The Kuraray Group launched the medium-term management plan “PROUD 2020” from fiscal 2018. It 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 9, 2018
Masaaki Ito
Representative Director and President