#1☑ OSAKA SODA 1H FY2023 Presentation Material - Results for 1H FY2023 & New Medium-Term Management Plan - Something Better with Chemicals December 6, 2023 OSɅKɅ SODA CO., LTD.#2Recovery Status: Main Equipment Malfunctions in AC Production Facility Situation to Date April 4 Main equipment of Allyl Chloride (AC) manufacturing facility at Mizushima Plant was suspended due to malfunctions May 8 Resume production of some products June 13 Partial repairs to improve manufacturing capacity to approx. 70% July 27 Recurrence of malfunctions in main AC production equipment August 11 Resume production of some products November 21 Restored of manufacturing capacity to approx. 70% Future Outlook In March 2024, AC production facilities will be fully restored during the regular maintenance. We apologize for any inconvenience and concern this may cause, and will continue to work toward a full recovery as soon as possible. Something Better with Chemicals OSAKA SODA 1#3Results for 1H FY2023 Something Better with Chemicals ☑ OSAKA SODA#4Earnings Trends (Million of yen) 60,000 50,000 40,000 Lower sales and profits due to the impact of main equipment malfunctions in AC production facility and sluggish demand in Japan and overseas 53,026 30,000 4,952 5,190 20,000 10,000 Operating income (right scale) I Net income (right scale) Ordinary income (right scale) -Net sales (left scale) (Million of yen) 14,000 51,915 12,000 46,622 45,178 10,854 42,157 9,722 3,497 3,698 3,191 2,474 6,158 5,694 4,421 0 1H FY2019 1H FY2020 1H FY2021 Something Better with Chemicals 7,505 1H FY2022 6,020 4,917 10,000 8,000 6,000 4,042 4,000 1H FY2023 2,000 0 * The Accounting Standard for Revenue Recognition has been applied since FY2021 OSAKA SODA 3#5Overview of Consolidated Financial Results The impact of production problems was ¥3.5 billion in net sales and ¥3.3 billion in operating income Each stage of profit declined YoY but exceeded the initial forecast 1H FY2022 1H FY2023 (YoY) (Million of yen) to sales (A) to sales Change %Change (YoY) Initial forecast (B) Achievem ent rate Change (A)-(B) Net sales 51,915 46,622 (5,293) (10.2%) 51,000 91.4% (4,378) Operating income 9,722 18.7% 4,917 10.5% (4,805) (49.4%) 3,600 136.6% 1,317 Ordinary income 10,854 20.9% 6,020 12.9% (4,834) (44.5%) 4,100 146.8% 1,920 Net income 7,505 14.4% 4,042 8.7% (3,463) (46.1%) 2,800 144.4% 1,242 Earning per share ¥314.73 ¥158.91 Overseas sales 20,299 39.1% 14,540 31.2% (5,759) (28.4%) Assumptions 1H FY2022 1H FY2023 Yen / USD 130 Yen 139 Yen Average exchange rate Yen / Euro 137 Yen 151 Yen Naphtha price (Yen / KL) 83,750 Yen 64,500 Yen Something Better with Chemicals OSAKA SODA 4#6Segment (Basic Chemicals) Chlor-Alkali: Price revisions due to higher fuel and raw material prices contributed Epichlorohydrin: Affected by the shipping adjustments caused by production problems and the sluggish demand for epoxy resins Net sales Operating income (Millions of yen) Variance (Operating income, YoY) 20,986 18,266 (Billions of yen) 3,730 59 1H FY2022 X 1H FY2023 Net sales (down ¥2.7 billion YoY) Chlor-Alkali Epichlorohydrin Production problems 3.7 +2.6 (2.3) 1H FY2022 * (3.0) Sales Feedstock unit costs price (1.9) +3.5 *Figures by segment for FY2022 are approximate figures reclassified into new segments Something Better with Chemicals Production and sales volume (2.3) Fixed costs (0.1) Production problems (2.9) 0 1H FY2023 OSAKA SODA 5#7Segment (Functional Chemicals) Synthetic Rubber: Automobile productions has recovered, Alternative demand from other materials in line with stricter environmental regulations was increased in Epichlorohydrin rubber, New adoptions are increased in Acrylic rubber Synthetic Resin: Limited recovery in demand for UV inks, Demand for China is firm but for Japan, Europe, and the United States is sluggish Allyl Ethers: Demand for Silane coupling agent has been sluggish particularly for functional paints, in addition to shipping adjustments caused by production Net sales 15,201 Operating income (Millions of yen) 3,951 13,477 1H FY2022 2,107 1H FY2023 Variance (Operating income, YoY) (Billions of yen) Net sales (down ¥1.7 billion YoY) 3.9 Synthetic Rubber / Synthetic Resin (0.2) Allyl Ethers (1.5) Electrodes, etc. +0.5 1H FY2022 X Production problems (0.5) *Figures by segment for FY2022 are approximate figures reclassified into new segments Something Better with Chemicals Sales unit price Feedstock costs (0.4) +0.4 Production and sales volume (1.4) Production problems (0.4) 2.1 1H FY2023 OSAKA SODA 6#8Segment (Healthcare) Chromatography: Demand is expanded for diabetes treatments applications in Europe, the United States, and Asian markets APIs and their intermediates : Sales of nucleic acid drug substances, anti-ulcer drug intermediates, and insomnia treatment drug intermediates expanded Expansion plans: Completion of new silica gel production facility by 2024 at Matsuyama Plant, Promoting expansion plans for completion of new silica gel production facility and expansion by 2026 at Amagasaki Plant Net sales -Operating income (Millions of yen) Variance (Operating income, YoY) 5,273 5,372 2,661 2,307 1H FY2022 X 1H FY2023 Net sales (up ¥0.1 billion YoY) Chromatography* APIs and Their Intermediates +0.1 +0 2.3 1H FY2022 * * Pharmaceutical purification materials(Silica gel), analytical equipment, packed columns *Figures by segment for FY2022 are approximate figures reclassified into new segments Something Better with Chemicals Sales unit Feedstock price costs +0.2 (0.1) Production and sales volume +0.5 (Billions of yen) Fixed costs (0.3) 2.6 1H FY2023 OSAKA SODA 7#9Segment (Trading and Others) Consumer Products: Sales of Housing Facilities continued to expand from the previous fiscal year Specialty Polymers Materials: Sales of Photosensitive Resin and products for water-treatment increased steadily Functional Products: Sales of electronic materials products was sluggish Net sales -Operating income 10,454 (Millions of yen) 9,507 Variance (Operating income, YoY) (Billions of yen) 381 698 Sales Sales unit volume price +0.2 +0.1 1H FY2022 * 1H FY2023 0.6 0.3 Net sales (down ¥0.9 billion YoY) 1H FY2022 * 1H FY2023 Consumer Products +0.2 Specialty Polymer Materials +0.1 Functional Products, etc. (1.2) *Figures by segment for FY2022 are approximate figures reclassified into new segments Something Better with Chemicals OSAKA SODA 8#10Balance Sheet, Statement of Cash Flows Constructed a stable financial base, and maintained a high level of equity ratio in the 70% range Capacity building investment in the new medium-term management plan and investment for maintenance and production efficiency including strengthening of facility management, can be sufficiently supported Change from (Million of yen) 1H FY2022 FY2022 1H FY2023 1H FY2022 Total assets 138,018 138,029 146,439 8,410 Net assets 99,750 99,543 105,928 6,385 Shareholder's equity ratio 72.3% 72.1% 72.3% 0.2% Interest-bearing debt 7,172 7,664 7,673 9 Change from (Million of yen) 1H FY2022 FY2022 1H FY2023 1H FY2022 Cash flows from operating activities 5,922 9,354 5,149 (773) Cash flow from investing activities (3,005) (5,380) (815) 2,190 Cash flow from financing activities (1,339) (4,596) (1,167) 172 Cash and cash equivalents 39,288 36,843 40,450 1,162 Something Better with Chemicals OSAKA SODA 9#11Forecast for FY2023 Something Better with Chemicals ☑ OSAKA SODA#12Forecast for FY2023 Full-year earnings forecast remains unchanged from initial forecast While healthcare business is expected to grow, there are concerns about sluggish demand due to factors such as slow economic recovery in China Full recovery of AC production facilities is on schedule as originally planned, Plan to implement initiatives looking ahead to production recovery in the second half Change (YoY) FY 2022 FY2023 Forecast To sales (Million of yen) (%) To sales (%) Percentage Amount (%) Net sales 104,208 105,000 792 0.8 Operating income 15,557 14.9 10,000 9.5 (5,557) (35.7) Ordinary income 17,164 16.5 11,100 10.6 (6,064) (35.3) Net income 10,570 10.1 7,500 7.1 (3,070) (29.1) Earning per share 428.43 yen - 294.81 yen Overseas sales 39,675 38.1 37,200 35.5 (2,475) (2.6) Average Assumptions exchange rate Yen / Euro FY2022 FY2023 Yen / USD 134 Yen 137 Yen 140 Yen 150 Yen Naphtha price (Yen / KL) Something Better with Chemicals 75,500 Yen 63,500 Yen OSAKA SODA 11#13FY2024 Forecast by Segment Basic chemicals: The impact of malfunctions in AC production facilities will be mitigated Functional chemicals Maintain and expand sales share Healthcare Continue to perform strongly due to growth in demand FY2022* FY2023 Forecast Change (YoY) (Million of yen) 1H 2H Full Year 1H 2H Full Year 1H 2H Full Year Basic Chemicals 20,986 21,336 42,322 18,266 23,634 41,900 (2,720) 2,298 (422) Functional Chemicals 15,201 16,659 31,860 13,477 16,423 29,900 (1,724) (236) (1,960) Net sales Healthcare 5,273 5,002 10,275 5,372 6,228 11,600 99 1,226 1,325 Trading and Others 10,454 9,296 19,750 9,507 12,093 21,600 (947) 2,797 1,850 Total 51,915 52,293 104,208 46,622 58,378 105,000 (5,293) 6,085 792 Basic Chemicals 3,730 1,118 4,848 59 541 600 (3,671) (577) (4,248) Functional Chemicals 3,951 2,447 6,398 2,107 2,043 4,150 (1,844) (404) (2,248) Healthcare 2,307 2,308 4,615 2,661 2,689 5,350 354 381 735 Operating income Trading and Others 381 607 988 698 452 1,150 317 (155) 162 Company-wide, (648) (645) (1,293) (609) (641) (1,250) 39 4 43 eliminations Total 9,722 5,835 15,557 4,917 5,083 10,000 (4,805) (752) (5,557) *Figures by segment for FY2022 are approximate figures reclassified into new segments Something Better with Chemicals OSAKA SODA 12#14Segment (Basic Chemicals) Basic chemicals: The impact of production problem will be mitigated and production will recover Chlor-Alkali Secure sales volume through a sales policy that responds to fluctuations in fuel and raw materials prices Epichlorohydrin: Increase sales volume by eliminating shipping adjustments due to production problems Net sales -Operating income 42,322 (Millions of yen) 41,900 Variance (Operating income, YoY) (Billions of yen) 34,939 4,688 4,848 600 FY2021 X FY2022 X FY2023 Forecast 4.8 Net sales (down ¥0.4 billion YoY) Chlor-Alkali Epichlorohydrin Production problems +6.4 (2.1) (4.7) FY2022 * Sales unit price +3.3 Feedstock costs (0.4) Production and sales volume (2.6) Fixed costs (0.2) Production problems (4.3) 0.6 *Figures by segment for FY2021 and FY2022 are approximate figures reclassified into new segments Something Better with Chemicals FY2023 Forecast OSAKA SODA 13#15Segment (Functional Chemicals) Synthetic Rubber Automotive manufacturing volume will continue to recover, focus on acquiring new adoptions in Japan and overseas in Acrylic Rubber Synthetic Resin Capture recovered demand for UV ink and insulating varnishes, mainly in China Allyl Ethers: Expand sales for Silane coupling agent such as functional paints Net sales -Operating income 31,860 (Millions of yen) 29,900 Variance (Operating income, YoY) 25,735 6,398 (Billions of yen) 4,714 Production 4,150 Feedstock and sales Sales unit price (1.7) cost volume Fixed +0.8 (0.7) costs (0.1) FY2021 X FY2022 X FY2023 Forecast 6.3 Net sales (down ¥1.9 billion YoY) Synthetic Rubber/Synthetic Resin +6.0 Allyl Ethers (0.9) Electrodes, etc. (1.0) Production problems (0.6) FY2022 X *Figures by segment for FY2021 and FY2022 are approximate figures reclassified into new segments Something Better with Chemicals Production problems (0.5) 4.1 FY2023 Forecast OSAKA SODA 14#16Segment (Healthcare) Chromatography: Expand sales for diabetes and the rapidly expanding obesity medications utilizing the enhanced capacity of Amagasaki plant, focus on the sales of a new lineup of packed columns APIs and their intermediates: Increase orders due to new facilities (PI-3) at Matsuyama Plant Net sales Operating income (Millions of yen) Variance (Operating income, YoY) 11,600 10,275 Sales 8,224 3,375 5,350 Production and sales volume +1.2 (Billions of yen) Fixed costs (0.5) 4,615 Unit Feedstock price cost +0.1 (0.1) FY2021 X FY2022 X FY2023 Forecast 4.6 Net sales (up ¥1.3 billion YoY) Chromatography* APIs and Their Intermediates +0.8 +0.5 FY2022 * * Pharmaceutical purification materials (silica gel), analytical equipment, packed columns *Figures by segment for FY2021 and FY2022 are approximate figures reclassified into new segments Something Better with Chemicals 5.3 FY2023 Forecast OSAKA SODA 15#17Segment (Trading and Others) Consumer Products Sales of Housing Facilities will remain strong Specialty Polymer Materials: Sales of photosensitive resin increased due to recovery in printing demand Basic Chemical Products Expand sales of new products for semiconductors, in addition to price revisions that responds to fluctuations in raw material prices Net sales Operating income (Millions of yen) 19,186 19,750 21,600 812 988 1,150 Variance (Operating income, YoY) (Billions of yen) FY2021 X FY2022 X FY2023 Forecast 0.9 Net sales (up ¥1.8 billion YoY) Consumer Products Specialty Polymer Materials Basic chemical Products, etc. +0.2 FY2022 X +0.3 +1.3 Sales Sales volume unit price +0.1 +0.1 *Figures by segment for FY2021 and FY2022 are approximate figures reclassified into new segments Something Better with Chemicals 1.1 FY2023 Forecast OSAKA SODA 16#18Shareholder Returns In FY2024, plan to continue an annual dividend at ¥90 which was increased in FY2023 During the new medium-term management plan, we aim to maintain stable dividends and to achieve a total shareholder return ratio of 40% by utilizing the stock buy backs (Yen) (%) 100 Annual dividend per share (left scale) I Dividend increase (left scale) ☐ Payout ratio (right scale) 100 90 90 90 90 80 80 80 70 70 65 65 65 60 580 57.5 55 2650 50 40 40 30.5 26.8 25.8 30 21.9 23.5 25.3 30 19.8 21.0 20 20 10 10 0 0 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 (plan) * Dividends per share before FY2017 are converted to figures after the reverse stock split in October 2017 Something Better with Chemicals OSAKA SODA 17#19New medium-term management Shape the Future - 2025 Something Better with Chemicals ☑ OSAKA SODA#20To realize "Our ideal image" In 2021, we formulated a long-term vision based on the "Our ideal image" that marks the 120th anniversary of our founding ■ 5 years to implement the realization of Our ideal image which is a milestone of our vision for 2025 To putting the philosophy system into practice and rooting it in the corporate culture Build a resilient and flexible business foundation supported by the Chemicals, Functional Chemicals and Healthcare businesses Create next-generation pillars of earnings in the fields of Mobility, Information and communication, Environment and energy, and Health and healthcare Become a company where employees can fully demonstrate their abilities To contribute to the realization of a safe and affluent society through our creative technologies and innovative products Be a corporate group that provides new value to society through chemistry MISSION Group Mission Statement FY2025 Our vision Something Better with Chemicals 120th anniversary FY2035 Our ideal image VISION Vision Statement VALUE Conduct Guidelines Human Resources Policy OSAKA SODA 19#21Challenges to realize "Our vision" The previous 2 year mid-term management plan was set as a “period for accumulating power" to realize our vision Under the new mid-term management plan, We will strive to achieve our vision in 3 years Our vision for FY2025 For the Basic chemicals business, strengthen resistance to changes in the business environment and generate stable profit by reinforcing existing businesses, creating new businesses, and expanding the scale of business For the Functional chemicals business, maintain and expand the market share of global niche-top products as Osaka Soda's growth engine by expanding existing businesses and developing new applications and materials For the Healthcare business, expand into growth fields such as biopharmaceuticals in response to changes in pharmaceutical modalities Establish a development system for the continuous launch of new products Utilizing the foundation built in EMPOWER THE NEXT-22 and working Shape the Future-2025 on Continuous strengthening of our base in existing businesses, (FY2023 to FY2025) EMPOWER THE NEXT-22 (FY2021 to FY2022) Strengthening of new product creation capabilities, and Promotion of sustainability management, we will realize our vision for FY2025 Building a foundation for sustainable growth under the 4 basic policies of Building a resilient business foundation, Promotion of market-in-type development, Efforts to achieve the SDGs, and reforming corporate culture and organizational culture Something Better with Chemicals OSAKA SODA 20#22Summary of EMPOWER THE NEXT-22 Built a foundation to challenge our vision, worked on identifying issues and formulating measures to achieve Building a resilient business foundation Positioned basic chemicals, functional chemicals and healthcare as a core business and promoted resilience strategy ✓ Commencement of divisional organizational management ✓ Expansion of manufacturing capacity (Allyl Ethers, Healthcare) Challenges Further strengthening of 3 core businesses and expanding the scale Efforts to achieve the SDGs Aimed to build a system that contributes to the realization of a sustainable global environment through our corporate activities ✓ Establishment of a system for promoting sustainability (basic policy and committee) ✓ Settings materiality and KPI Challenges Promotion of sustainability measures and expand of disclosure Promotion of market-in-type development Aimed to build a system for early market launch by understanding customer needs through collaboration between business division and R&D division Implementation of progress and revision of development themes based on the DR system ✓ To establish an internal framework for promote development themes Challenges Improvement of management ability Strengthening Company-wide Efforts for Market-In-Type Development Reforming corporate culture and organizational culture Reformed our business system and personnel system, and raised the level of our organizational and human resources capabilities through business reform activities Promoting the Reform of Corporate Cultures and Organizational Cultures under the new corporate philosophy system ✓ Revisions to the personnel system and Renewal personnel training policies Start updating the core system Challenges Establishment of business reform activities in each division Something Better with Chemicals OSAKA SODA 21#23Shape the Future - 2025 Promote important measures based on basic policies and aim to achieve record-high performance in FY2025 Performance targets (FY2025) Net sales ¥123 billion (million of yen) 140,000 Net sales (left scale) Operating income (right scale) 120,000 Operating income ¥18 billion ROE 10.0% or more 100,000 Assumptions 80,000 Yen / USD ¥130 Yen / Euro ¥140 Naphtha price (Yen / KL) ¥63,000 FY2020 FY2021 FY2022 EMPOWER THE NEXT-22 (million of yen) 20,000 16,000 Achieving record-high Performance 12,000 FY2025 Shape the Future-2025 8,000 Basic Policies *Adopted the Accounting Standard for Revenue Recognition from FY2021 1. Continuous strengthening of our base in existing businesses Expand our business base by generating stable cash from existing businesses and actively investing in growth areas 2. Strengthening of new product creation capabilities ➤ Strengthen company-wide efforts to further promote market-in-type development 3. Promotion of sustainability management Continuously enhance our corporate value by promoting sustainability measures and expanding disclosure to stakeholders Something Better with Chemicals OSAKA SODA 22#24Basic Policy 1: Continuous strengthening of our base in existing businesses 1 Basic chemicals Resilience Strengthening facility management and invest in renewal and maintenance Maintain and expand sales share through our full-scale production capabilities. Business environment Basic chemicals Chlor-Alkali Epichlorohydrin Measures to address changes in the domestic electricity situation (energy and power saving) Reducing GHG emissions Domestic production of steel, pulp, paper, and petroleum refineries decreases year by year Market conditions will gradually increase toward 2025 Increase toward 2025, although the demand for epoxy resins is linked to economic fluctuations (million of yen) 60,000 (million of yen) 12,000 Net sales (left scale) Opretaring income (right scale) 49,500 42,322 9,000 40,000 34,939 6,000 20,000 5,300 4,688 4,848 3,000 0 0 FY2021* * FY2022* figures reclassified into new segments FY2025 (Target) Promotion of locally based sales activities Important measures Optimization of production through balance management at 4 electrolysis plants Sales strategy that flexibly responds to fluctuations in fuel and raw material prices Build efficient supply chain Energy saving through process improvements Promotion of DX production Reduce costs by improving logistics efficiency and strengthening the system Strengthen of facility management Optimization of production lines when updating important facility ✓ linstallation of high efficiency equipment Production efficiency Improvement of electricity consumption ✓ Development of production technologies to improve AC/EP yield Something Better with Chemicals OSAKA SODA 23#25Basic Policy 1: Continuous strengthening of our base in existing businesses 2 Functional chemicals Resilience Business expansion Cultivation of markets for global niche-top products, development of new applications Expansion of business scale by sales of Acrylic Rubber and Non-phthalate Allyl Resin (million of yen) 60,000 (million of yen) 12,000 Business environment Allyl Ethers Market of epoxy silane coupling agent expands at an annual rate of 3-4% 45,000 Net sales (left scale) Opretaring income (right scale) 39,700 9,000 31,860 Synthetic Rubber • Global automobile production recovered to 97 million by 2025 30,000 25,735 6,000 6,800 6,398 4,714 15,000 3,000 Synthetic Resin Replacement of oil-based with UV is progressing in offset ink market Limited impact of digitization and paperless operations 0 0 FY2021* FY2022* * figures reclassified into new segments FY2025 (Target) Expansion of Allyl Ethers's capacity Expand sales of Synthetic Rubber Important measures Development of new applications and expansion of new grades Strengthen technical support system and expand market shares in Acrylic Rubber ➤ Improve profitability of compound business in the North American Expand sales of Synthetic Resin Capture the demand of food packages painting for the U.S. and Europe through Non-phthalate Allyl Resin Something Better with Chemicals OSAKA SODA 24#26Basic Policy 1: Continuous strengthening of our base in existing businesses 3 Healthcare Business expansion Strengthening profitability in Pharmaceutical Purification Materials / APIs and their intermediates by capturing the growing demand in recent years Increase production capacity in preparation for future strong demand Business environment (million of yen) 12,000 (million of yen) 20,000 I Net sales (left scale) Opretaring income (right scale) 16,500 9,000 Pharmaceutical Purification Material Diabetes medications (including GLP-1 receptor agonists) grows at an annual rate of 10% 15,000 Obesity medications continue to high growth potential ● Expect to biosimilars enter the market 10,275 Growth of purification separation materials market for medium-molecular drugs 10,000 6,000 8,224 6,000 Global pharmaceutical market expands at an annual rate of 3-6% 4,615 5,000 3,000 3,375 APIs and intermediates ● Accelerating the return of procurement to Japan in APIs and intermediates due to quality issues and stricter environmental regulations Development of medium-molecular drugs is progressing 0 0 FY2021* FY2022* FY2025 (Target) * figures reclassified into new segments Important measures [Pharmaceutical Purification Materials] Capture growing Slica gel demand Become the global de facto standard by strengthen global operations and branding Expand production capacity to meet future demand increases Development and commercialization of Polymer gel [APIs and their intermediates] Fully operate of new facility "PI-3" Implementation of next facility enhancements Strengthening the high-potency pharmaceutical business Advance into the biopharmaceutical business Something Better with Chemicals OSAKA SODA 25#27Basic Policy 1: Continuous strengthening of our base in existing businesses 4 Strengthening information gathering capabilities Expanding business areas and strengthening profitability in domestic and Trading and Others overseas Important measures Strengthening profitability and information gathering capabilities in overseas subsidiaries (million of yen) 25,000 (million of yen) Net sales (left scale) -Opretaring income (right scale) 2,500 19,750 19,186 20,000 Promotion of mass production of semi-solid batteries build a business of semi-solid batteries assembly using special polyether 15,000 2,000 17,300 1,500 Expand the consumer products business 10,000 1,200 1,000 988 812 5,000 500 Strengthening Housing Facilities planning and development of capabilities by using Chinese base Sales of newly developed Photosensitive resin products Expand sales of related products and strengthen business including technical services Improve profitability in basic chemical products Something Better with Chemicals 0 FY2021* FY2022* * figures reclassified into new segments 0 FY2025 (Target) OSAKA SODA 26#28Basic Policy 2: Strengthening of new product creation capabilities Further promote market-in-type development and develop products that will become pillars of the next generation of earnings Aiming to accelerate development and build a development system to continuously launch new products Improving Development Management Capabilities ➤ Organizational structure, Human resource management • Strategic resource allocation using skill maps • Training plans suitable for each job class Strengthening thematic progress management ⚫ Development theme progress management through Design Review (DR) ➤ Putting development infrastructure in place ⚫ Spreading knowledge management through the introduction of development support systems Strengthening Company-wide efforts for Market-In-Type Development Each business division, Corporate department and Development & Commercialization Division explore development themes from their own perspectives Development & Commercialization Division Market-in-type themes based on 7 core technologies [Theme progress management using DR] Planning FS Exploring Develop -ment Commer -cialization 11 Something Better with Chemicals Each Business Divisions Selecting highly accurate themes based on customer needs Themes that take advantage of Osaka Soda's strengths Corporate Department Discovering themes through the external resources OSAKA SODA 27#29Basic Policy 2: Strengthening of new product creation capabilities Selected development themes that enable us to show our creative technologies capabilities in 4 key areas Promote the commercialization of development themes created in the previous mid-term management plan and cultivate new development themes Environment and Energy Materials for storage batteries Mobility New normal materials for automotive New grades of acrylic rubber Sensor and actuator materials Polymer alloy materials, etc. Health and Main themes Polymer electrolytes for LIB (special polyether) High ion conductive materials for all solid-state batteries Main themes SiO-based anode binders, etc. Information and Communication Semiconductor peripheral 10 materials Main themes Silver nanoparticles for die bond materials (for SiC and GaN-based power semiconductors) Carbon nanotubes, etc Healthcare Biopharmaceutical materials Long and healthy life Main themes OSAKA SODA COSAKA SODA COSAKA SODA HPLO Column New columns (size exclusion, alkali resistance) Anti-aging materials New purification materials for biopharmaceuticals Protein drugs (CDMO), etc. Something Better with Chemicals OSAKA SODA 28#30Basic Policy 3: Promotion of sustainability management Continuous improvement of corporate value by promote various measures and enhance disclosing to stakeholders Stable supply of products that support the industrial infrastructure Stable supply of products that contribute to the realization of a secure and affluent society Planning and implementation of environmental impact reduction Disclosure Reducing greenhouse gas emissions and waste landfill rate Reduction of resource consumption by improving production efficiency Development of new products using our creative technologies Provide new value that contributes to the realization of a sustainable society Utilization of human resources Promotion of health management Promotion of women's active engagement and activation of senior human resources Strengthening of human resources Main Activities ΚΡΙ Promotion of women's active engagement Reducing of greenhouse gas emissions Reducing of industrial waste landfill rate Increasing the ratio of female manager, including section chiefs by 1.5x by FY 2025 Reduce CO2 emissions by FY2030 (SUM of Scope1+Scope2, vs FY2013) Final industrial wastes landfill rate of FY2030 Something Better with Chemicals FY2022 Performance Target 6.3% 8.7% or more 11% 30% 6.3% Less than 1% OSAKA SODA 29#31Toward eliminate production problems Following the occurrence of main equipment malfunctions in AC production facility at the Mizushima Plant, we will implement (1) Improving facility management level (2) Strengthening of supply stabilization, from a business continuity plan perspective Improve Diagnostic Technology Enhance non-destructive testing Review deterioration diagnosis items Acquire and improve diagnostic techniques Facility Management Updated facility management system in FY2021 Update Facilities/Equipment Optimize production lines for large-sized critical equipment Implement improved maintenance (Increase efficiency and life span) Enhance Cycle Management Reset and standardize maintenance cycles Reset and standardize device update cycles Spare Equipment and Parts Management Standardize retention indicators Shared use of spare parts (1) Improving facility management level Strengthen management by select the most important equipment that has a significant impact on production Expand spare parts for the most important equipment Shorten and clarify update cycles (2) Strengthening of supply stabilization Implement company-wide measures such as tightening operational management and improving skills Clarify proper operating ranges based on analysis through flow simulations Strengthening early recovery system (Double tracking, installation of spare equipment, etc.) Investment for enhancing facility management: ¥1.5 billion (3 years) Something Better with Chemicals OSAKA SODA 30#32Investment plan In addition to a total investment plan of ¥25 billion, ¥20 billion is set as an investment and financing facility for M&A, alliances, etc. Plans for strategic investments in Healthcare business and other manufacturing capacity expansion, R&D, and information infrastructures In Investment for maintenance and production efficiency, strengthen facility management such as preventative maintenance in addition to regular maintenance . • Investment for maintenance and production efficiency Renewal of electrolysis facility Replacement of deteriorated facilities at each plant, etc. Something Better with Chemicals Investment for maintenance Strategic investment and production efficiency ¥9.5 billion ¥15.5 billion • Strategic investment Slica Gel production facility (Matsuyama) Slica Gel production facility (Amagasaki 2 term reinforced) High potency APIs and their intermediates mass-production facility Allyl Ethers production facility (Reinforcement) Core system Battery Research facility, etc. OSAKA SODA 31#33☑ OSAKA SODA Contact Osaka Soda Co., LTD. Public Relations Group, Corporate Planning Department TEL: 06-6110-1560 This document is not prepared for the purpose of soliciting investment in securities issued by us. All information contained in this document represents our views as of the time of preparation of this document. Please note that we do not guarantee or promise accuracy and completeness. Something Better with Chemicals