Sekisui 02

Presentation of Financial Results for 2Q of FY2008 (Fiscal Year Ending March 31, 2009)

Sekisui Chemical Co., Ltd. Naotake Okubo, President 28 October, 2008

FY2008 The First-half Results Summary of Profit and Loss

(Billions of yen)

FY2008

FY2007

FH Actual

FH Actual

Difference

Difference from the Plan

FY2008 FH Plan

472.9

467.8

5.1

468.0

4.9

Operating Income

18.3

17.9

0.4

19.0

-0.7

Recurring Income

19.2

18.5

0.6

19.0

0.2

9.5

17.9

-8.4

8.0

1.5

7

7

0

7

0

Net Sales

Net Income

Dividend （yen / share）

SEKISUI CHEMICAL GROUP

-

1-

FY2008 The First-half Results Net Sales & Operating Income by Company FY2007 FH Actual

FY2008 FH Actual Ope. Inc.

Net Sales

(Billions of yen)

Difference

Net Sales

Ope. Inc.

Net Sales

Ope. Inc.

FY2008 FH Previous Plan Net Sales

Ope. Inc.

Housing

211.9

8.6

210.8

6.2

1.1

2.4

208.0

8.0

UIEP

109.2

-0.3

109.0

1.4

0.2

-1.7

110.0

-0.5

HPP

141.2

10.7

137.3 11.6

3.9

-0.9

141.0 12.5

Others

23.0

-0.6

23.1 -1.2

-0.1

0.6

23.0

-1.0

Eliminated or Not Attributed

-12.3

-0.2

-12.3 -0.2

0.0

-0.0

-14.0

0.0

Total

472.9

17.3

467.8 17.9

5.1

0.4

468.0 19.0

*UIEP: Urban Infrastructure & Environmental Products Company *HPP: High Performance Plastics Company SEKISUI CHEMICAL GROUP

-

2-

-

3-

FY2008 Annual Plan Net Sales & Operating Income by Company FY2008 Revised Plan

FY2007 Actual

Ope. Inc.

Sales

(Billions of yen)

Difference Ope. Inc.

Sales

Sales

Ope. Inc.

FY2008 Previous Plan Sales

Ope. Inc.

Housing

436.0

20.0

420.0

14.1

16.0

5.9

428.0

20.0

UIEP

243.0

5.0

233.8

6.1

9.3

-1.1

245.0

7.5

HPP

294.0

24.5

280.5

24.5

13.5

0.0

295.0

28.0

Others

50.0

-2.0

48.5

-1.4

1.5

-0.6

49.0

-1.5

Eliminated or Not attributed

-27.0

-

-24.1

-0.3

-2.9

0.3

-28.0

-

Total

996.0

47.5

958.7

43.0

37.3

4.5

989.0

54.0

FY2008 Dividend （yen / share）

FY2007

Difference

FY2008 Previous Plan

FH

SH Plan

FH

SH

FH

SH

FH

SH

7

8

7

8

0

0

7

8

SEKISUI CHEMICAL GROUP

FY2008 The Summary of FH  Recovery of the housing orders - Successful differentiation achieved by appealing the high performance features - Realization of good effect by the wide-area sales system introduced in FY2007  Hard struggling caused by the deteriorated business environment at domestic and abroad - The continued soaring in raw materials price compressed the profitability beyond our assumption - The hardship in securing quantity caused by the decreased demands for construction and IT etc.  Positive implementation of strategic investments - Progressing the positive expansion of strategic business fields - Progressing the basis-development for exploiting the new frontiers of growth

Housing orders received in number of structures : FH2008 105% year-on-year Ratio of installation of photovoltaic generation systems FH2008: 50%

Delay in price-shifting in certain businesses and products against the soaring raw materials prices

Interlayer film business: Decision on the increase of production capacity in Japan and China Pipe restoration business: Acquired the company of pipe restoration business in Europe (July)

SEKISUI CHEMICAL GROUP

-

4-

-

5-

Priority Measures for the SH of FY2008 Reinforcing Profitability under the Severe External Environment

 Complete shifting of the rises price of raw materials to the selling price  Intensive reduction of costs by the Manufacturing Development Innovation - Realizing the cost reduction of 7 billion yen (prospect for FY2008) by means of multiple activities: “productivity improvement”, “quality improvement” and “Elimination of claims & construction mistakes”

 Fixed cost reduction by promoting the structural reform & the streamlining of organization - Personnel reduction & shifting to growth fields and implementing the elimination and integration of sales bases (UIEP) - Starting the unified management of production & sales in Kyushu (Oct. Housing) - Retiring from the low-profitability business （Oct. HPP）

Making Strategic Moves and Further Growth for Priority Expansion of High Value Added Businesses

 Increasing the market share by expanding sales of high-performance housing - Housing order-taking in number of structures for SH of FY2008 is to be 100% year-on-year - Putting on market the new houses pursuing highly-industrialized specifications in the name of “CRESCASA”

 Reinforcing the world-wide basis of the pipe restoration business and materializing the business

- Structuring the world-wide value-chain by acquiring the European enterprise.; Realizing the synergy with SPR Americas and SPR Americas and Heitkamp.

 Further expansion of interlayer film business, and entering into overseas markets with medical business - Further increase in sales of high-performance interlayer film with new products - Structuring the basis for overseas expansion of ADME & Tox. research business

 Decision of increasing the production capacity of the IT related products (High valueadded tape & film) - Establishing the new production base (Taga Plant) for the clean sheet & film for optical and electronics fields SEKISUI CHEMICAL GROUP

High Performance Plastics Company-1 Prospect for FY2008 We will maintain and enhance the profitability, despite the influence of highly-priced raw materials and the deterioration of market in and out of Japan (Building related and IT-related business) AT: In the decrease in automotive production, the interlayer film business has been favorably expanded owing to the effect of the increased production capacity.

However, the profitability came down under the influence of high-priced raw materials.

IT: Even under the influence of the deteriorated liquid-crystal market situation we secured the sales turnover on the same level as previous year, owing to the increase in sales of the growth-expected products.

MD: Profitability was improved by selection and concentration.

Diagnostics regent remained on the same level, and Pharmaceuticals and ADME & Tox. research showed the growth.

FY2008 Revised Annual Plan : Analysis of Operating Income (year-on- year)

15

(Billions of yen)

10.4

10

Sales Quantity & Composition Depression of construction related business Depression in IT related business

5

6.4

0

0

Increase in Selling Price

Total -5

2.1

-3.1

-2.2

Raw CR Fixed Cost Materials etc.

Foreign Exchange etc.

Impact of soaring

Quick response to the high-priced raw materials

raw material prices

-10

FY2008 Previous Plan

-13.6

-15

ď ŽReinforcing profitability - Strict implementation of product price increase - Strengthening the purchasing power ď ŽStrict implementation of the structural reform of low-profit businesses - Transfer of Sign System business - Expanding the high-valued products -

SEKISUI CHEMICAL GROUP

6-

High Performance Plastics Company-2 Business Expansion Overseas Sales

Sales in the Strategic Business Fields (Billions of yen)

200

44% 150 109.0 [45.6] 100

24.4

[ 5.7]

27.0

[12.6]

Sales Ratio in Strategic Business Fields [ within HPP Company ]

48% 134.5 [65.1] 37.1 [17.8]

29.7 [14.3]

49%

144.0 MD

37.8

[27.3]

[33.0]

FY2006

FY2007

74.3

[35.5]

72.5

FY2008 A

FY2008

100

Note: Figures in [ ] are the result in FH

Revised Plan Previous Plan

Priority expansion of high-value-added products.

42%

94.9

Operating Income Ratio: 57%

43%

42%

127.6

124.3

28.0

27.4

26.2

22.2 40.7

Increasing production capacity 50 of interlayer film in Japan and China.

(Operation staring in Oct. 2009) New product of interlayer film is to be put on market (Wedge-shaped film integrated in a car roof)

0

39%

Percentage of 117.0 Overseas Sales to Total Sales

Taga Plant (IT products main production base) newly established

33.6 [15.0] IT AT

67.8

Expansion of overseas business with ADME & Tox. Research (Licensing-out to XenoTech LLC. in U.S.)

31.7

50 57.6

150

49%

144.4 [68.5] 38.5 [17.9]

(Billions of yen)

America

45.0

42.0 Europe

32.0

40.8

50.2

54.6

54.8 Asia

0 FY2006

FY2007

FY2008

Revised Plan

FY2008

Previous Plan

Further exploitation of growth frontiers.

SEKISUI CHEMICAL GROUP

-

7-

Urban Infrastructure & Environmental Products Company-1 Prospect for FY200 8 FY2008 Despite severe environment for attaining the quantity due to the delayed housing starts recovery, the stagnant demand in the world recession, we are reinforcing the profit earning constitution by promoting efficiency.

 We had hard fights of sales quantity in mainly core business by the delayed housing starts recovery  Against the soaring raw material prices in the FH, the shifting to the selling price was delayed in the general purpose PVC products.  As a result of acquiring the pipe restoration business company in Europe, each of the companies in the three priority business fields attained the sale turnover on the level of 10 billion yen in terms of annual sales.

FY2008 Revised Annual Plan : Analysis of Operating Income (year-on- year)

5 (Japan) (Overseas)

2.5 0 Total

-2.5 -5

(Japan) (Overseas)

1.4 2.5

0.8

-0.9 -0.1

Increase in Selling Price

-1.1

CR etc.

Sales Quantity

Reinforcing the profitability of domestic business - Completion of price increase - Finishing-up of the structural reformation

0.2

-0.5

Reorganization of sales system and Personnel shift to the growth areas

Newly Consolidated

Fixed Cost

- Expansion of the growth products Accelerating the exploitation of the growth frontiers - Stronger-tackling the Stock Business - Effective utilization of the acquired basis (M&A)

Subsidiaries

Raw Materials

The delayed recovery of housing starts The stagnation of overseas demands

-4.5 FY2008 Previous Plan

-7.5

-

SEKISUI CHEMICAL GROUP

8-

Urban Infrastructure & Environmental Products Company-2 Promotion of Portfolio Reformation

Overseas Sales < > Effect by newly consolidated subsidiaries

Net Sales and Operating Income Plan by Portfolio (Billions of yen) FY2008

Portfolio FH Water Supply & Sales 66.1 Drainage, Building Core Ope. Material, 0.5 Home Techno Income Environmental Sales 5.2 Civil Engineering Growth Ope. (Aged pipe restoration) Income -1.0 Plant Materials （Sheet Business Sales 20.9 etc.） Expansion Infrastructure Ope. Composite 1.9 Materials Income （RCP・FFU etc.） Strength -ening Bases

Aqua System, Roofing Materials

FY2007

Revised Previous Annual Annual Plan Plan

141.9

FH

Annual

143.7 68.8 140.8

Difference from Previous Year FH

Revised Annual Plan

-2.7

1.1

2.9

5.1

2.5

4.8

-2.0

-1.9

22.6

17.3

3.2

10.8

2.0

11.8

0.9

0.8

-0.7

0.4

-0.3

0.6

45.7 18.6

43.2

2.4

-0.5

42.7

50

5.1

1.8

5.1

0.0

-0.3

Sales

9.0

20.4

20.4

8.8

19.9

0.2

0.5

Ope. Income

0.0

0.3

0.3

-0.1

0.1

0.1

0.2

SEKISUI CHEMICAL GROUP

(Pipe restoration business）

Allen + KDX

(Sheet business）

40

Percentage of Overseas Sales

30

Functional Materials Pipe Restration Water Environment

8%

20

18.2

6%

12.9 10

6.6

0

5.4

39.1 16.8 <1.1>

29.4 14.8 <3.6> 1.2

1.2 13.4 6.9

16% 15%

13%

10.1 0.9

4.8

Heitkamp + SSPRA +CPT

(Billions of yen)

37.5

17.5 <1.2>

10.8 <8.6>

5.5 <3.2>

11.5 <0.3>

14.5 <0.8>

FY2005 FY2006 FY2007 FY2008 FY2008

Revised Previous Plan Plan

Pursuing the M&A synergy -

9-

Housing Company-1 FH

Prospect for FY2008

Housing orders (structures): 105% year-on-year Living Environment business Sales: 107% year-on-year Housing orders (structures): 100% year-on-year Living Environment business Sales: 107% year-on-year

SH

Housing orders was favorable in FH, therefore annual operating income plan may be achievable

 Further implementing the differentiation - FH Actual: Ratio of houses with photovoltaic generation systems 129% year-on-year by appealing high performance features - SH Plan: Warm Airy 104％ year-on-year  Capturing deeply into the price - FH: Newly launched models “bj new” and “Grand To You WS” volume zone enjoying with good reputation - SH: The new model to be on market “CRESCASA” aiming at the order increment

 Growth of Living Environment business - FH Actual: Sales of priority materials 114％ year-on-year and further improvement in profitability - SH Plan: Sales of priority materials 116％ year-on-year 10

FY2008 Revised Annual Plan : Analysis of Operating Income (year-on- year)

Housing

(Billions of yen)

5.9 Increase in Sales of Living Environ.

-0.1

CR etc.

Housing Sales Factor

6.6

2.8

2.1

Total -5

Ratio of Highigh-Performance Specifications Installation Tiled exterior wall Photovoltaic generation systems Warm Airy

60

5

0

70 (%)

Living Environ.

55 50

55

54

54

53

Fixed Cost

40

50 50

46

-1.6

Housing Materials

56

43

39

FY2008 Previous Plan

-3.9

30 FH2005

FH2006

FH2007

FH2008

-

SEKISUI CHEMICAL GROUP

10 -

Housing Company-2 Strategies for capturing orders for SH2008 SH2008 <Prospect on Market Environment> - The market may remain stagnant mainly in the rebuilding of houses.

- The customers’ desire for houses may probably step back due to the lack in incentives and the unfavorable business outlook.

(The anxiety over the future, caused by the increasing financial crises originated in USA, and the depression of real estate business)

Targeted Market

Specs. for Differentiation

Products Strategy Thoroughly implementing the differentiation with

“Grand To You” series

‘Parfait’ series

Parfait MasterDesign 2.0

“Domani” series

Zero Utility Cost

Demand Creation

“The Warm-Heim Campaign” will be expanded and implemented from Nov. 2008 to Feb. 2009

the high performance

Increasing our share by capturing the volume zone

“The products giving customers the feeling of cost-performance”

“Grand To You WS” (launched in May)

Indicating

“Grand To You” series FH 130% year-on-year

Performance

Highly Industrialized Product

of each house

The lineups completed

“CRESCASA” on sale throughout Japan in Oct.

New Construction

Complex Housing

Reinforcing the sales system with exclusive staff

“Desio” series “bj new” (launched in Apr.)

“bj” series FH 117% year-on-year

High performance apartments, LETOIT series SEKISUI CHEMICAL GROUP

CRESCASA

New model for apartment; “Letoit Duet” (Launched in Sep.)

Warm Airy

Rebuilding

“Make it visible” visible”

Tiled exterior wall -

11 -

The Financial Results for the First Half of FY 2008 Naofumi Negishi Director , CFO

FH2008 Financial Results Number of Consolidated Subsidiaries As of Sep. 30, 2008 As of March 31, 2008

Consolidated Companies Affiliates

130

130

8

8

Difference

+2 Newly consolidated subsidiaries -2 Separated, Integration

Influence of Difference in the Number of Consolidated Subsidiaries (Billions of yen)

Allen +1.1 [consolidated from 2Q of FY2007],

Net Sales

+2.2 Heitkamp +1.1

Operating Income

-0.2 Heitkamp -0.2

Note: Influence on net sales and operating income for FH2008 SEKISUI CHEMICAL GROUP

-

13 -

FH2008 Financial Results Summary of Profit and Loss

(Billions of yen)

FH2008 Net Sales Gross Income of Sales Gross Income Rate Selling, Gen. & Admin. Expense

Operating Income Investment Income or Loss by Equity Method Other Non-operating Income & Expenses

Recurring Income Extraordinary Income Extraordinary Expenses Income before Income Taxes Corporate Income Tax etc.

Income for Minority Shareholders Net Income

FH2007

Difference

472.9 129.3 27.3% 111.0 18.3 0.5 0.4 19.2 3.8 15.4 5.5 0.4 9.5

467.8 134.3 28.7% 116.4 17.9 -0.5 1.2 18.5 23.6 11.0 31.2 13.1 0.1 17.9

7

7

Dividend（yen / share） * Excluding the influence from newly consolidated subsidiaries

5.1 *2.9 -5.0 -1.4% -5.4 0.4 *0.6 1.0 -0.8 0.6 -23.6 -7.2 -15.8 -7.6 0.2 -8.4 0

SEKISUI CHEMICAL GROUP

-

14 -

-

15 -

FH2008 Net Sales and Operating Income by Company Net Sales and Operating Income by Company (Billions of yen)

FH2008

FH2007

Net Sales Ope. Inc.

Difference

Net Sales Ope. Inc. Net Sales Ope. Inc.

Housing

211.9

8.6

210.8

6.2

1.1

2.4

UIEP

109.2

-0.3

109.0

1.4

0.2

-1.7

HPP

141.2

10.7

137.3

11.6

3.9

-0.9

Others

23.0

-0.6

23.1

-1.2

-0.1

0.6

Eliminated or Not Attributed

-12.3

-0.2

-12.3

-0.2

0.0

-0.0

Total

472.9

18.3

467.8

17.9

5.1

0.4

*UIEP : Urban Infrastructure & Environmental Products Company *HPP : High Performance Plastics Company SEKISUI CHEMICAL GROUP

FH2008 Total Company Net Sales & Operating Income FH2008

Total Company

(Billions of yen) Difference

FH2007

Net Sales

Ope. Inc.

Net Sales

Ope. Inc.

Net Sales

472.9

18.3

467.8

17.9

5.1 *2.9

Ope. Inc.

0.4 * 0.6

* Excluding the influence from Newly consolidated subsidiaries

Analysis of Operating Income (year-on- year) 4.2

5 0.4 0

Total

3.4

2.8

(Billions of yen)

Foreign Exchange

CR etc.

Sales Factor Raw Materials, Housing Materials

-5

-10

Fixed Cost

-0.9

-9.1 SEKISUI CHEMICAL GROUP

-

16 -

-

17 -

FH2008 Net Sales and Operating Income by Company (Billions of yen)

Housing

FH2008 Net Sales

FH2007

Ope. Inc.

Net Sales

Difference

Ope. Inc.

Net Sales

Ope. Inc.

House Sales

163.1

6.7

165.3

5.1

-2.2

1.6

Living Environment [Fami-S only]

48.8 [32.8 ]

1.9 [1.4]

45.5 [31.4]

1.1 [0.8]

3.3 [1.4]

0.8 [0.6]

Total

211.9

8.6

210.8

6.2

1.1

2.4

Analysis of Operating Income (year-on- year) 5.0 (Billions of yen)

Decrease in Sales -1.0 Composition etc. -1.2

2.5 2.4

0.0

-2.2

Increase in Sales of Living Environ. CR etc.

1.3 1.0

Total -2.5 -5.0

Housing Sales Factor

-1.2 Housing Materials

SEKISUI CHEMICAL GROUP

Housing 3.7 Living Environme nt -0.2 Fixed Cost

FH2008 Sales and Operating Income by Company (Billions of yen)

FH2008

UIEP

FH2007

Difference

Net Sales

Ope. Inc.

Net Sales

Ope. Inc.

Net Sales

109.2

-0.3

109.0

1.4

0.2 *-2.0

Ope. Inc.

-1.7 *-1.5

* Excluding the influence from Newly consolidated subsidiaries

Analysis of Operating Income (year-on- year)

2.5

Newly Consolidated Subsidiaries

(Billions of yen)

0.7 0.0 Selling Prices

Total

CR etc.

Raw Materials

-1.1

-1.7

-2.5

0.7

0.7

Sales Quantity & Composition

-0.2

Fixed Cost

-2.5

-5.0 SEKISUI CHEMICAL GROUP

-

18 -

-

19 -

FH2008 Sales and Operating Income by Company (Billions of yen)

FH2008

HPP

FH2007

Difference

Net Sales

Ope. Inc.

Net Sales

Ope. Inc.

Net Sales

Ope. Inc.

141.2

10.7

137.3

11.6

3.9

-0.9

Analysis of Operating Income (year-on- year) 5.0 (Billions of yen)

2.5 0.0

-5.0

2.9

Sales Quantity & Composition

1.0

-0.9 Total

-2.5

2.9

Increase in Selling Price

Raw Materials

CR etc.

-1.4 Fixed Cost

-0.9 Foreign Exchange

-5.4

-7.5 SEKISUI CHEMICAL GROUP

FH2008 Financial Results Non-operating Income & Expense FH2007

FH2008 Investment Income and Expenses by Equity Method Financial Income and Expenses

(Billions of yen)

0.5

1.6

Difference

-0.5

Remarks on main Difference

1.0 -0.4 Received -0.5 (Sekisui House -0.4 ) Paid 0.1

2.0

Miscellaneous Income and Expenses etc.

-1.2

-0.9

-0.3

Total

0.9

0.7

0.2

Misc. Income

-0.3

Misc. Exp.

-0.0

SEKISUI CHEMICAL GROUP

-

20 -

-

21 -

FH2008 Financial Results Extraordinary Income and Expenses

(Billions of yen)

FH2008

FH2007

Difference

Gain on Sale of Investments in Securities

-

23.1

-23.1

Proceeds from Business Transfer

-

0.5

-0.5

-

23.6

-23.6

Structural Improvement Expenses

2.8

6.9

-4.1

Loss on Valuation of Equity Securities for Nonconsolidated and Affiliates

0.5

-

0.5

-

3.1

-3.1

0.6

1.0

-0.5

Total Extraordinary Expenses

3.8

11.0

-7.2

Total Extraordinary Income and Expenses

-3.8

12.6

-16.4

Total Extraordinary Income

Loss on Revaluation of Inventories (Lower-of-Cost-or-Market Method) Loss on Sale or Disposal of Property, Plant and Equipment

SEKISUI CHEMICAL GROUP

FH2008 Financial Results Balance Sheets (Assets)

(Billions of yen) As of Mar. 31, 2008

As of Sep. 30, 2008

Difference

31.5

30.3

1.2

Account Receivable on Sales

156.9

168.4

-11.5

Inventories

124.6

116.2

8.4

30.8

27.5

3.3

249.8

243.5

6.3

26.5

27.4

-1.0

Investment Securities

139.8

133.2

6.6

Investments & Other Assets

35.8

36.3

-0.5

795.7

782.9

12.8

Cash & Deposits

Other Current Assets Tangible Fixed Assets Intangible Fixed Assets

Total Assets

Housing work in progress +4.6 Products inventories +1.3

Receipt of goods +11.7 Depreciation -13.5 Influence of Foreign Exchange -2.3 Lease accounting applied + 10.5

Nonconsolidated subsidiaryâ&#x20AC;&#x2122;s stocks +8.5 Other investments, sellout and redemption -2.0

SEKISUI CHEMICAL GROUP

-

22 -

-

23 -

FH2008 Financial Results Balance Sheets (Liabilities & Net Assets) As of Sep. 30, 2008

(Billions of yen)

As of Mar. 31, Difference 2008

No Interest Bearing Liabilities

319.3

321.8

-2.5

Interest Bearing Liabilities

105.7

92.1

13.6

Total Liabilities

425.0

413.9

11.0

Capital Stock etc.

209.3

209.4

-0.0

Retained Earnings

159.3

154.1

5.3

Treasury Stock

-10.8

-10.8

0.0

-0.9

-0.9

0.0

9.4

9.8

-0.4

Other Net Assets

4.4

7.5

-3.1

Total Net Assets

370.7

368.9

-1.8

Total Liabilities, Net Assets

795.7

782.9

12.8

Unrealized Holding Gain on Securities Minority Shareholdersâ&#x20AC;&#x2122; Interests

SEKISUI CHEMICAL GROUP

Loan payable -3.6 Commercial paper +6.0 Lease accounting applied +11.3

Current net income Dividend payment

+9.5 -4.2

Foreign currency translation adjustment - 3.2

FH2008 Financial Results Consolidated Cash Flows (Billions of yen)

FH2008

FH2007

Cash Flows from Operating Activities

27.4

13.0

Cash Flows from Investing Activities

-21.1

29.6

Cash Flows from Financing Activities

-4.9

-36.3

0.9

7.1

31.1

34.7

2.0

38.2

Net Increase (Decrease) in Cash & Cash Equivalents Cash & Cash Equivalents at End of Term Free Cash Flow

= Cash Flows from Operating Activities + Cash Flows from Investing Activities - Dividends Paid

SEKISUI CHEMICAL GROUP

-

24 -

-

25 -

FH2008 Financial Results Depreciation and Capital Expenditure (Billions of yen)

Depreciation FH2008

FH2007

Capital Expenditure Difference

FH2008

FH2007

Difference

Housing

4.4 [1.7]

2.7

1.7

3.1 [1.2]

3.2

-0.0

UIEP

3.5 [0.1]

3.3

0.2

3.1 [0.1]

4.2

-1.1

HPP

8.4 [0.9]

6.7

1.7

7.1 [0.5]

8.6

-1.5

Others

1.1 [0.2]

0.8

0.3

1.1 [0.1]

0.9

0.3

Eliminated or Not Attributed

0.3 [0.0]

0.3

-0.0

0.5 [0.0]

0.2

0.4

17.7 [3.0]

13.8

3.9 15.0 [1.8]

17.0

-2.0

Total

* ( ) : the amount influenced by the change of depreciation method

SEKISUI CHEMICAL GROUP

FY2008 Profit Plan (Billions of yen) FY2008 996.0 274.1 27.5% 226.5 47.5

Net Sales Gross Income of Sales Sales Income Rate Sales and Gen. & Admin. Expenses

Operating Income Income/Loss from investment in Equity Method companies Other Non-operating income/Expense

Recurring Income Extraordinary Income Extraordinary Loss Income before tax Corporate income tax etc.

Income for minority shareholders

Net Income

Dividend （yen/share）

FY2007 958.7 272.8 28.5% 229.8 43.0

Difference 37.3 *26.6 1.3 -0.9% -3.2 4.5

1.4

0.6

0.9

-2.9 46.0 9.7 36.3 12.4 0.9 23.0

-5.0 38.5 23.6 17.2 45.0 19.9 0.7 24.3

2.1 7.5 -23.6 -7.5 -8.7 -7.5 0.2 -1.3

15

15

0

* Excluding the influence from newly consolidated subsidiaries SEKISUI CHEMICAL GROUP

-

26 -

-

27 -

FY2008 Plan Net Sales and Operating Income Net Sales and Operating Income by Company (Billions of yen)

FY2008 Plan

FY2007 Actual

Net Sales Ope. Inc. Net Sales Ope. Inc.

Difference Net Sales

Ope. Inc.

Housing

436.0

20.0

420.0

14.1

16.0

5.9

UIEP

243.0

5.0

233.8

6.1

9.3

-1.1

HPP

294.0

24.5

280.5

24.5

13.5

0.0

Others

50.0

-2.0

48.5

-1.4

1.5

-0.6

Eliminated or Not Attributed

-27.0

-

-24.1

-0.3

-2.9

0.3

Total

996.0

47.5

958.7

43.0

37.3

4.5

SEKISUI CHEMICAL GROUP

FY2008 Plan Total Company Sales and Operating Income (Billions of yen)

FY2008 Plan

Total Company

FY2007 Actual

Difference

Net Sales

Ope. Inc.

Net Sales

Ope. Inc.

Net Sales

996.0

47.5

958.7

43.0

37.3

Ope. Inc.

4.5

*26.6 * Excluding the influence from Newly consolidated subsidiaries

Forecast Analysis of Operating Income (year-on- year) 25.0

20.3

(Billions of yen)

12.5

6.3

4.5

1.9

CR etc.

0.0 Total

Sales Factor

Fixed Cost

-12.5

Raw Materials, Housing Materials

-25.0

-22.0

-2.0 Foreign Exchange

SEKISUI CHEMICAL GROUP

-

28 -

-

29 -

FY2008 Plan Sales and Operating Income by Company (Billions of yen)

Housing

FY2008 Plan

FY2007 Actual

Difference

Net Sales Ope. Inc. Net Sales Ope. Inc. Net Sales

Ope. Inc.

House Sales

336.0

16.5

326.7

11.1

9.3

5.4

Living Environment [Fami-S only]

100.0 [67.4]

3.5 [2.5]

93.3 [63.5]

3.0 [2.1]

6.7 [3.9]

0.5 [0.4]

Total

436.0

20.0

420.0

14.1

16.0

5.9

Forecast Analysis of Operating Income (year-on- year) 7.5 (Billions of yen) 5.9

Increase in Sales of Living Environ.

Increase in Sales +3.2

5.0

Composition etc. -3.3

-0.1

-2.5 -5.0

6.6 Living Environment

-1.6

0.0 Total

CR etc.

2.8

2.1

2.5

Housing

Housing Sales Factor

Housing Materials

Fixe d Cost

-3.9 SEKISUI CHEMICAL GROUP

FY2008 Plan Sales and Operating Income by Company (Billions of yen)

FY2008 Plan

UIEP

FY2007 Actual

Difference

Net Sales

Ope. Inc.

Net Sales

Ope. Inc.

Net Sales

Ope. Inc.

243.0

5.0

233.8

6.1

9.3 *-0.7

-1.1

* Excluding the influence from Newly consolidated subsidiaries

Forecast Analysis of Operating Income (year-on- year)

5.0 (Billions of yen)

Sales Quantity & Composition

2.5

2.5

1.4

0.0 Total -1.1

-2.5

Selling Prices

-1.0

0.2

0.3 Fixed Cost

Raw Materials

-5.0

Newly Consolidated Subsidiaries

CR etc.

-4.5 SEKISUI CHEMICAL GROUP

-

30 -

-

31 -

FY2008 Plan Sales and Operating Income by Company (Billions of yen)

FY2008 Plan

HPP

FY2007 Actual

Difference

Net Sales

Ope. Inc.

Net Sales

Ope. Inc.

Net Sales

294.0

24.5

280.5

24.5

13.5

Ope. Inc.

0.0

*12.8 * Excluding the influence from Newly consolidated subsidiaries

Forecast Analysis of Operating Income (year-on- year) 15.0

(Billions of yen)

10.0 5.0

-10.0

& Composition

6.4

CR etc.

Total

Foreign Exchange

2.1

0.0

0.0 -5.0

10.4 Sales Quantity

Increase in Selling Price

Raw Materials

Fixe d Cost -3.1

-2.0

Newly Consolidated Subsidiaries

-0.2

-13.6

-15.0 SEKISUI CHEMICAL GROUP

FY2008 Plan

(Billions of yen)

FY2008

FY2007

Difference

Depreciation

37.0 [6.0]

30.0

7.0

Capital Expenditure

39.0 [4.0]

35.0

4.0

26.0

26.0

0.0

Research & Development Expenses

* [ ]: the amount influenced by Lease accounting applied

SEKISUI CHEMICAL GROUP

-

32 -

-

33 -

FY2008 Plan (Billions of yen) FY2008

FY2007

Revised Plan

Actual

Difference

FY2008 Previous Plan

996.0

958.7

37.3

989.0

Operating Income

47.5

43.0

4.5

54.0

Recurring Income

46.0

38.5

7.5

53.0

Net Income

23.0

24.3

-1.3

27.0

Sales

SEKISUI CHEMICAL GROUP

Disclaimer: This presentation may contain forward-looking statements. Such forward-looking statements are based on current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements due to changes in global economic, business, competitive market and regulatory factors.

SEKISUI CHEMICAL GROUP

-

34 -

SEKISUI CHEMICAL GROUP

-

35 -

1. Main Data in Housing Business

Housing Company Resultｓ and Plan FY2008 SH Plan

FH

211.9 163.1 155.4 7.8 48.8 32.8 2.7 13.3 6,900 5,000 4,050 950 1,900

Sales ( Billions of yen ) Housing

Consolidated

Houses Land Living Environment Refurbishing Interior-Exterior Real Estate 1) Number of houses sold (units) Detached houses Heim Two-U Housing complex

Annual Plan

224.1 172.9 165.2 7.7 51.2 34.6 2.7 13.9 7,900 5,500 4,450 1,050 2,400

436.0 336.0 320.5 15.5 100.0 67.4 5.4 27.2 14,800 10,500 8,500 2,000 4,300

FH

FY2007 SH

Annual

FY2006 Annual

210.8 165.3 158.0 7.3 45.5 31.4 3.0 11.2 6,900 5,000 4,000 1,000 1,900

209.1 161.4 154.3 7.1 47.8 32.2 2.6 13.0 7,450 5,100 4,050 1,050 2,350

420.0 326.7 312.3 14.4 93.3 63.5 5.6 24.2 14,350 10,100 8,050 2,050 4,250

430.5 339.7 326.1 13.6 90.7 61.8 5.8 23.2 15,000 10,820 8,470 2,350 4,180

2) Main data

Others

Price<Sales subsidiaries: Detached Ho.>/unit>(Mil.yen) Price<Sales subsidiaries:Detached Ho.>/Tsubo(3.3m2) (thou. yen) Floor Space(m2) Exhibition places(Unit:structure) Sales staff (No. of person) Replacement ratio(%) Referral sales ratio(%)

29.5

-

-

29.3

29.2

29.3

29.5

739

-

-

735

731

734

716

131.7 41.6 2,463 36 36

-

-

131.6 455 2,536 36 35

131.8 36 34

131.7 438 2,370 36 34

135.9 465 2,419 37 34

FH

FY2006 SH

41.6 2,400 35 34

35 34

* Replacement ratio and Referral sales ratio are based on the receipt of orders.

(Millions of yen)

2. Housing Orders FH Backlog at beginning Growth rate New orders Growth rate Sales of houses Growth rate Balance at the end Growth rate

153,000 2% 197,277 6% 190,877 -1% 159,400 11%

FY2008 SH Plan Annual Plan

159,400 10% 201,521 2% 202,521 7% 158,400 4%

398,798 4% 393,398 3% -

FY2007 SH

FH

150,000 -1% 186,646 -6% 192,346 -1% 144,300 -8%

Annual

151,500 156,700 144,300 － 2% -11% -8% － 197,786 384,432 199,356 192,829 8% 0% 3% -2% 189,086 381,432 194,156 199,529 -4% 3% -5% -3% 156,700 150,000 153,000 － 2% -1% 2% －

3. Housing Starts FH Housing starts Privately-owned houses (included in above (=A) Sales by our company Detached house sales by our co.=B

FY2008 SH Plan

Annual Plan

FH

FY2007 SH

Annual

Annual

392,184 4% 393,684 -1% (in units) FY2006 Annual

580,780

549,220

1,130,000

533,288

502,310 1,035,598 1,285,246

179,680

160,320

340,000

162,831

148,972

313,803

356,557

6,900 5,000 2.8%

7,900 5,500 3.4%

14,800 10,500 3.1%

6,900 5,000 3.1%

7,450 5,100 3.4%

14,350 10,100 3.2%

15,000 10,820 3.0%

Our share in Detached houses=B/A *The housing starts in FH of FY2008 and the above “Detached house sales” are based on a prospect.

4. Ratio of High-Performance Specifications Installation FY2008 FH SH Plan Annual Plan Photovoltaic generation systems 50% 55% 53% Tiled exterior wall (Heim type JX) 50% 54% 52% Totally electrified model 91% 89% 90% Warm Airy 56% 69% 62%

FH

43% 55% 87% 46%

FY2007 SH

45% 50% 89% 64%

Annual

43% 52% 88% 55%

FY2006 Annual

51% 55% 87% 49%