Mitsubishi Chemical : Consolidated Financial Results for the Fiscal Year Ended March 31, 2021 (Under IFRS)

May 12, 2021

Consolidated Financial Results

for the Fiscal Year Ended March 31, 2021

(Under IFRS)

Company name:	Mitsubishi Chemical Holdings Corporation	Listing:	Tokyo Stock Exchange
Securities code:	4188	URL: https://www.mitsubishichem-hd.co.jp/english
Representative:	Jean-Marc Gilson
	Representative Corporate Executive Officer, President&Chief Executive Officer
Contact:	Osamu Shimizu			TEL: [+81] (0)3-6748-7120
	General Manager, Public Relations and Investor Relations Office

Scheduled date of annual general meeting of	June 24, 2021
shareholders:
Scheduled date to commence dividend payments:	June 3, 2021
Scheduled date to file annual securities report:	June 24, 2021
Preparation of supplementary material on financial results:	Yes
Holding of financial results briefing:	Yes (for securities analysts and institutional investors)

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021)

(1) Results of Operations:

(Percentages indicate year-on-year changes.)

			Core		Operating			Net income	Comprehensive
	Sales Revenue	Operating		Net income	attributable to
		income	Income
			Income *				owners of the parent
Fiscal year ended		%			%		%		%		%		%
March 31, 2021	3,257,535	(9.0)	174,710	(10.3)	47,518	(67.1)	22,722	(73.8)	(7,557)	－	160,551	－
March 31, 2020	3,580,510	(6.8)	194,820	(38.0)	144,285	(51.0)	86,560	(60.1)	54,077	(68.1)	475	(99.8)

Reference: Income before taxes FY2020: ¥32,908 million, FY2019: ¥122,003 million

* Core operating income is calculated as operating income excluding certain gains and expenses attributable to non-recurring factors.

					Diluted	Return on equity	Ratio of income	Ratio of core
	Basic earnings				operating
		earnings per	attributable to	before tax to
	per share		income to sales
				share	owners of parent	total assets
					revenue
Fiscal year ended	Yen				Yen		%	%	%
March 31, 2021	(5.32)			(5.32)		(0.6)	0.6	5.4
March 31, 2020	38.08			35.21		4.2	2.3	5.4
Reference: Share of profit of associates and joint ventures
FY2020: ¥15,640 million, FY2019: ¥13,396 million
(2) Financial Position:
						Equity attributable	Ratio of profit	Equity attributable
	Total assets			Total equity	to owners of the	before tax to	to owners of the
						parent	total assets	parent per share
Fiscal year ended									%	Yen
March 31, 2021	5,287,228			1,571,148		1,236,339	23.4	870.40
March 31, 2020	5,132,149			1,450,829		1,170,222	22.8	824.07
(3) Cash Flows:
	Net cash provided by			Net cash provided by		Net cash provided by		Cash and cash
	(used in) operating			(used in) investing		(used in) financing	equivalents at end of
	activities			activities		activities		the period
Fiscal year ended
March 31, 2021	467,133			(217,010)		(142,773)		349,577
March 31, 2020	452,003			(87,563)		(450,523)		228,211

2. Cash dividends

		Annual dividends per share				Ratio of
						Total cash	Payout	dividends to
	First	Second	Third			ratio	equity attributable
	Fiscal		dividends
	quarter-	quarter-	quarter-	Total	(Consolid	to owners of
	year-end	(Total)
	end	end	end		ated)	parent
								(Consolidated)
Fiscal year ended	Yen	Yen	Yen	Yen	Yen		%	%
March 31, 2020	－	20.00	－	12.00	32.00	45,543	84.0	3.6
March 31, 2021	－	12.00	－	12.00	24.00	34,161	－	2.8
March 31, 2022	－	12.00	－	12.00	24.00	34,162	35.1	－
(Forecast)

3. Prospects for the Following Fiscal Year

(Percentages indicate changes in comparison with the same period of the previous fiscal year)

			Core			Operating				Net income		Earnings per
	Sales Revenue	Operating			Net income	attributable to
		income		share - Basic
			Income *					owners of the parent
		%				%			%		%			%	Yen
First Half of	1,774,000	17.9	102,500		87.6	100,500		－	60,500	－	44,000		－	30.98
FY2021
FY2021	3,660,000	12.4	230,000		31.6	216,000	354.6	140,000	516.1	97,000		－	68.29

Reference: Income before taxes

First Half of FY2021: ¥93,500 million, FY2021: ¥200,000 million

* Notes

(1) Changes in significant subsidiaries during the period

:

Yes

(changes in specified subsidiaries resulting in the change in scope of consolidation) Newly included: － Excluded : 1 (Company name) MHCS Corporation

As of July 1, 2020, MHCS Corporation is excluded from the scope of consolidation due to its extinguishment following the execution of an absorption-type merger in which Qualicaps Co., Ltd. was the surviving company and MHCS Corporation was the extinguished company.

(2) Changes in accounting policies and changes in accounting estimates

(i) Changes in accounting policies required by IFRS	:	None
(ii) Changes in accounting policies due to other reasons	:	None
(iii) Changes in accounting estimates	:	None
(3) Number of issued shares (ordinary shares)

(i)Total number of issued shares at the end of the period (including treasury shares)

(ii)Number of treasury shares

at the end of the period

(iii)Average number of shares outstanding during the period

March	1,506,288,107 Shares	March	1,506,288,107 Shares
31,2021	31,2020
March	85,865,812 Shares	March	86,230,066 Shares
31,2021:	31,2020
FY2020	1,420,256,382 Shares	FY2019	1,419,981,527 Shares

*Mitsubishi Chemical Holdings Corporation adopted a performance-based share compensation plan that uses executive compensation Board Incentive Plan (BIP) trusts. In the calculation of basic and diluted net income per share attributable to owners of the parent / Equity attributable to owners of the parent per share, Mitsubishi Chemical Holdings Corporation stocks held by BIP trust are included in treasury shares.

(Reference)

Number of Company's shares in executive compensation BIP trust:

March 31, 2021	2,994,552
March 31, 2020	3,183,648

Disclosure regarding audit procedures

Financial results reports are exempt from audit conducted by certified public accountants or an audit corporation.

Proper use of earnings forecasts, and other special matters

*The forward-looking statements are based largely on the Company's expectations and information available as of the date hereof, and are subject to risks and uncertainties which may be beyond the Company's control. Actual results could differ materially due to numerous factors. The Company's stance on forward-looking statements is described on pages [6] hereof.

*This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Contents:

1. Qualitative Information on Financial Results for the Term
(1)	Business Performance	P.	2
(2)	Financial Position	P.	5
(3)	Cash Flow Analysis	P.	5
(4)	Financial Results Forecasts for Fiscal 2021	P.	6
2. Basic Approach to the Selection of Accounting Standards	P.	6
3. Consolidated Financial Statements and Notes Concerning Consolidated Financial Statements
(1)	Consolidated Statement of Profit or Loss	P.	7
(2)	Consolidated Statement of Comprehensive Income	P.	8
(3)	Consolidated Statement of Financial Position	P.	9
(4)	Consolidated Statement of Changes in Equity	P.	11
(5)	Consolidated Statement of Cash Flow	P.	13
(6)	Notes to Consolidated Financial Statements	P.	15
(Segment Information)	P.	15
(Per Share Information)	P.	18

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1. Qualitative Information on Financial Results for the Term

(1) Business Performance

Performance Overview

The business environment in which the Mitsubishi Chemical Holdings Group operated in fiscal 2020 (April 1, 2020, through March 31, 2021; same hereafter), was significantly impacted by the global COVID-19 pandemic. This included weak demand for automotive applications and most of the market segments we serve. The first half of the fiscal year was especially weak. In the second half, demand picked up at home and abroad along with a broad base recovery in economic activities.

It was against this backdrop that sales revenue in the consolidated fiscal year under review decreased ¥323.0 billion, or 9.0%, to ¥3,257.5 billion. As a result of a weaker turnover and tight expense control, core operating income only dropped ¥20.1 billion, or 10.3%, to ¥174.7 billion. Including a significant impairment loss related to the health care domain, operating income declined ¥96.8 billion, or 67.1%, to ¥47.5 billion. In turn, income before taxes was down ¥89.1 billion, or 73.0%, to ¥32.9 billion. Net income attributable to owners of the parent fell ¥61.7 billion, to a loss of ¥7.6 billion.

Overview of Business Segments

The overview of financial results by business segment for fiscal 2020 is shown below. Segment gains or losses are stated as core operating income, which excludes gains or losses from non-recurring factors and including losses from business withdrawals, streamlining, and other factors.

In the following sections, all comparisons are with the previous fiscal year unless stated otherwise.

Performance Products Segment, Performance Products Domain

Sales revenue decreased ¥84.2 billion, to ¥1,033.9 billion. Core operating income totaled ¥61.3 billion, flat from the previous year.

Functional products sales revenue declined. This was despite demand picking up from the second half, and reflected lower sales volumes for automotive applications of high-performance engineering plastics and other offerings for advanced moldings and composites.

In performance chemicals, sales revenue decreased amid lower sales volumes for automobiles, including for performance polymers in advanced polymers and other offerings. Another downside sales volume factor includes the impact of scheduled maintenance and repairs for phenol-polycarbonate chain materials facilities in advanced polymers.

Core operating income in this segment was flat year-on-year. Although there was impact of lower sales volumes for automobiles, including for advanced moldings and composites, and scheduled maintenance and repairs of facilities for advanced polymers, there was an upturn in demand in the second half and rise in market prices for phenol-polycarbonate chain materials.

Major initiatives in the Performance Products segment during fiscal 2020:

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