Mitsubishi Chemical : Operational Summary for the First Quarter of the Fiscal Year Ending March 31, 2021

Operational Summary

for the First Quarter of the Fiscal Year Ending March 31, 2021

August 4, 2020

Mitsubishi Chemical Holdings Corporation

Table of Contents

Consolidated Financial Statements for FY2020 1Q

Statements of Operations

Sales Revenue and Core Operating Income by Business Segment

Analysis of Core Operating Income

Overview of Business Segments

Special Items

Cash Flows

Statements of Financial Positions

Page No.

4

5

6

7

11

12

13

References 1

Statements of Operations [Quarterly Data]

Sales Revenue and Core Operating Income by Business Segment [Quarterly Data]

Business Segment Information

References 2

Q1 FY2020 Business Results (MTPC)

Page No.

15

16

17

Page No.

19

Mitsubishi Chemical Holdings Corporation has adopted IFRS starting with FY2016 1Q.	2

List of Abbreviations

FY2020	April 1, 2020 - March 31, 2021
	1st Quarter (1Q):	April 1, 2020 - June 30, 2020
	2nd Quarter (2Q):	July 1, 2020 - September 30, 2020
	3rd Quarter (3Q):	October 1, 2020 - December 31, 2020
	4th Quarter (4Q):	January 1, 2021 - March 31, 2021
	1st Half (1H):	April 1, 2020 - September 30, 2020
	2nd Half (2H):	October 1, 2020 - March 31, 2021
FY2019	April 1, 2019 - March 31, 2020
	1st Quarter (1Q):	April 1, 2019 - June 30, 2019
	2nd Quarter (2Q):	July 1, 2019 - September 30, 2019
	3rd Quarter (3Q):	October 1, 2019 - December 31, 2019
	4th Quarter (4Q):	January 1, 2020 - March 31, 2020
	1st Half (1H):	April 1, 2019 - September 30, 2019
	2nd Half (2H):	October 1, 2019 - March 31, 2020
MCHC	Mitsubishi Chemical Holdings Corporation
MCC	Mitsubishi Chemical Corporation
MTPC	Mitsubishi Tanabe Pharma Corporation
LSII	Life Science Institute, Inc.
TNSC	Taiyo Nippon Sanso Corporation

3

Consolidated Statements of Operations

Exchange Rate (¥/$)

Naphtha Price (¥/kl)

Continuing	Sales Revenue
Core Operating Income *1
	Special Items
	Operating Income
*Operations
Financial Income/Expenses
(Dividend included above)
	(Foreign Exchange Gain/Loss included above)
	Income before Taxes
2	Income Taxes
Net Income from Continuing Operations
	Net Income from Discontinued Operations

Net Income

Net Income Attributable to Owners of the Parent

Net Income Attributable to Non-Controlling Interests

*1 Share of profit of associates and joint ventures included. *2 Discontinued operations not included.

107.4		109.7		(2.3)	(2%)
25,000		45,400		(20,400)	(45%)
				(Billions of Yen)
FY2020 1Q		FY2019 1Q		Difference	%
722.7		916.4		(193.7)	(21%)
15.0		70.1		(55.1)	(79%)
8.7		(0.2)		8.9
23.7		69.9		(46.2)	(66%)
(3.3)		(3.3)		0.0
[2.5]		[2.9]		[(0.4)]
[0.0]		[(0.3)]		[0.3]
20.4		66.6		(46.2)
(12.2)		(18.2)		6.0
8.2		48.4		(40.2)
-		0.5		(0.5)
8.2		48.9		(40.7)
5.2		37.8		(32.6)	(86%)
3.0		11.1		(8.1)
	5.0		(4.8)
0.2

FY2020 1H

Forecast

(Announced on May 13)

1,509.0

25.0

3.5

28.5

(10.5)

‐

‐

18.0

(7.0)

11.0

0.0

11.0

0.0

11.0

• to 1H Forecast

48%

60%

83%

Core operating income is calculated as operating income (loss) excluding certain gains and expenses attributable to non-recurring	4
factors (losses incurred by business withdrawal and streamlining, etc.).

Sales Revenue and Core Operating Income

by Business Segment

													Impact of COVID-19
														(Approximation)
									(Billions of Yen)
											FY2020 1H
					FY2020 1Q		FY2019 1Q		Difference		Forecast			FY2020 1Q
								(Announced
											on May 13)
		Total Consolidated	Sales Revenue		722.7	916.4		(193.7)	1,509.0
		Core Operating Income		15.0		70.1		(55.1)		25.0			(38.2)
		Functional Products	Sales Revenue		142.7		171.8		(29.1)		290.0
		Core Operating Income		8.7		12.6		(3.9)		8.0			(6.9)
		Performance Chemicals	Sales Revenue		82.5		104.8		(22.3)		187.0
		Core Operating Income		1.3		6.9		(5.6)		(1.0)			(6.3)
	Performance Products	Sales Revenue		225.2		276.6		(51.4)		477.0
	Core Operating Income		10.0		19.5		(9.5)		7.0			(13.2)
		MMA	Sales Revenue		52.5		77.7		(25.2)		111.0
		Core Operating Income		(1.2)		13.8		(15.0)		6.0			(5.9)
		Petrochemicals	Sales Revenue		84.2		134.7		(50.5)		161.0
		Core Operating Income		(13.6)		0.8		(14.4)		(19.0)			(10.4)
		Carbon Products	Sales Revenue		44.4		71.7		(27.3)		95.0
		Core Operating Income		(1.3)		6.0		(7.3)		1.0			(3.1)
	Chemicals	Sales Revenue		181.1		284.1		(103.0)		367.0
	Core Operating Income		(16.1)		20.6		(36.7)		(12.0)			(19.4)
	Industrial Gases	Sales Revenue		182.9		208.6		(25.7)		396.0
	Core Operating Income		13.5		21.1		(7.6)		34.0			(8.3)
	Health Care	Sales Revenue		100.2		107.9		(7.7)		186.0
	Core Operating Income		8.8		9.3		(0.5)		1.0			2.7
	Others	Sales Revenue		33.3		39.2		(5.9)		83.0
	Core Operating Income		(1.2)		(0.4)		(0.8)		(5.0)			0.0
			[Inventory valuation gain/loss]
			Performance Chemicals		(0.5)		(0.7)		0.2
			Petrochemicals		(14.3)		0.9		(15.2)
			Carbon Products		(0.5)		0.0		(0.5)
			Total		(15.3)		0.2		(15.5)

*1 All figures are approximation for reference purpose only.

*2 Starting from FY2020, the segmentation of certain businesses and consolidated subsidiaries in MCC has been reviewed. The segment information for FY2019 is accordingly restated.

5

Analysis of Core Operating Income

										(Billions of Yen)
			FY2020 1Q		FY2019 1Q		Difference
					Price	Volume	Fixed Cost	Others *1
	Total Consolidated		15.0		70.1		(55.1)	(12.2)	(36.7)	4.5	(10.7)
	Performance Products		10.0		19.5		(9.5)	0.0	(14.5)	1.6	3.4
	Chemicals		(16.1)		20.6		(36.7)	(10.3)	(9.3)	0.3	(17.4)
	Industrial Gases		13.5		21.1		(7.6)	0.6	(7.5)	0.1	(0.8)
	Health Care		8.8		9.3		(0.5)	(3.0)	(5.1)	2.5	5.1
	Others		(1.2)		(0.4)		(0.8)	0.5	(0.3)	0.0	(1.0)

*1 Items included are impacts from inventory valuation gain/loss and share of profit of associates and joint ventures etc.

Changes in	(0.9)	(1.2)	(0.1)	-	0.4
exchange rates
Changes in foreign currency	(0.7)
translation included in above

80.0

60.0

(12.2)

40.0

70.1

＋4.5

20.0

0.0

(36.7)

(10.7) 15.0

FY2019 1Q	Price	Volume	Fixed Cost	Others	FY2020 1Q	6

Performance Products Segment

								(Billions of Yen)
				FY2020 1Q		FY2019 1Q		Difference
	Functional	Sales Revenue		142.7	171.8	(29.1)
	Products	Core Operating Income		8.7		12.6		(3.9)
	Performance	Sales Revenue		82.5		104.8		(22.3)
	Chemicals	Core Operating Income		1.3		6.9		(5.6)
Performance	Sales Revenue		225.2		276.6		(51.4)
Products	Core Operating Income		10.0		19.5		(9.5)

• Analysis of Core Operating Income＞

20.0
18.0
16.0
14.0
12.0
								＋3.4
10.0		19.5
8.0							＋1.6
6.0
									10.0
4.0				(14.5)
2.0
0.0
	FY2019 1Q	Price	Volume	Fixed Cost	Others	FY2020 1Q

Estimated impact of COVID-19

(13.2) (including 6.9 in Functional Products segment and 6.3 in Performance Chemicals segment)

	Functional Products
Sales Revenue	Demand dropped mainly for automotive applications, with sales
volumes of high-performance engineering plastics declining and
	other offerings.
Core Operating	Earnings dropped amid lower sales volumes for high-
Income	performance engineering plastics and other offerings.
	Performance Chemicals
	Sales volumes were down owing to an overall decline for
Sales Revenue	automobiles, including for performance polymers, as well as
because of the impact of scheduled maintenance and repairs for
	phenol-polycarbonate chain materials facilities.
Core Operating	Earnings were down amid lower sales volumes for performance
polymers, phenol-polycarbonate chain materials, and other
Income
offerings.

• In April 2020, Mitsubishi Chemical Corporation consolidated subsidiary Mitsubishi Chemical America, Inc. entered into a definitive agreement to acquire Gelest, Inc. The transaction is scheduled for completion by year- end. This purchase will enable Mitsubishi Chemical to broaden its customer solutions by combining its advanced technologies, business resources, and customer network with Gelest's capabilities. Gelest's key strengths include its advanced molecular design and compounding technologies in silicon compounds for contact lens materials, antimicrobials, and other materials, and the extensive use of the company's metal compounds for semiconductor precursors and other materials.

7

Chemicals Segment

								(Billions of Yen)
				FY2020 1Q		FY2019 1Q		Difference
	MMA	Sales Revenue		52.5	77.7	(25.2)
	Core Operating Income		(1.2)		13.8		(15.0)
	Petrochemicals	Sales Revenue		84.2		134.7		(50.5)
	Core Operating Income		(13.6)		0.8		(14.4)
	Carbon Products	Sales Revenue		44.4		71.7		(27.3)
	Core Operating Income		(1.3)		6.0		(7.3)
Chemicals	Sales Revenue		181.1		284.1		(103.0)
Core Operating Income		(16.1)		20.6		(36.7)

• Analysis of Core Operating Income＞

22.0(10.3)

17.0
		(9.3)
12.0		20.6
7.0
					＋0.3	(17.4)
2.0
(3.0)
(8.0)
									(16.1)
(13.0)
(18.0)
FY2019 1Q	Price	Volume	Fixed Cost		Others	FY2020 1Q

Estimated impact of COVID-19

(19.4) (including 5.9 in MMA, 10.4 in Petrochemicals, and 3.1 in Carbon Products)

	MMA
Sales Revenue	With demand remaining weak, sales were down amid
deteriorating market conditions, including for MMA monomers.
Core Operating	Earnings dwindled owing mainly to smaller gap between raw
Income	materials and product prices amid weaker market conditions.

Petrochemicals

	Revenue dropped owing to lower sales volumes from a greater
Sales Revenue	impact of scheduled maintenance and repairs at the ethylene
production facility, with prices declining owing to lower raw
	materials costs and other factors.
Core Operating	Earnings decreased amid a greater impact of scheduled
maintenance and repairs and inventory valuation losses from
Income
lower raw materials prices.
	Carbon Products

Sales Revenue	Revenue was down amid lower prices as a result of reduced raw
materials costs and a drop in sales volumes from declining in
	demand for coke and other offerings.
Core Operating	Earnings were off owing to a shrinking gap between raw materials
Income	and product prices, including for export coke.

8

Industrial Gases Segment

(Billions of Yen)

			FY2020 1Q		FY2019 1Q		Difference			Industrial Gases
							Although demand for electronics-related gases
	Sales Revenue		182.9		208.6		(25.7)		Sales Revenue	remained strong, revenue was down amid lower
Industrial Gases										domestic and overseas demand.
Core Operating Income		13.5		21.1		(7.6)
								Core Operating	Earnings declined amid lower overall domestic and
									Income	overseas demand.

• Analysis of Core Operating Income＞

24.0

22.0			＋0.6
20.0
18.0
16.0
				＋0.1
14.0
	21.1		(7.5)		(0.8)
12.0
10.0
							13.5
8.0
6.0
	FY2019 1Q	Price	Volume	Fixed Cost	Others	FY2020 1Q

Estimated impact of COVID-19

(8.3)

9

Health Care Segment

							(Billions of Yen)
			FY2020 1Q		FY2019 1Q		Difference
Health Care	Sales Revenue		100.2	107.9	(7.7)
Core Operating Income		8.8		9.3		(0.5)

*Discontinued operations not included.

• Analysis of Core Operating Income＞

11.0
10.0
					＋5.1
9.0
8.0
7.0
6.0			(3.0)
5.0
	9.3			＋2.5		8.8
4.0
3.0
2.0
1.0				(5.1)
0.0
	FY2019 1Q	Price	Volume	Fixed Cost	Others	FY2020 1Q

Estimated impact of COVID-19

Health Care

	Revenue was down mainly because lower domestic
Sales Revenue	sales prices for pharmaceuticals due to National
Health Insurance drug price revisions and other
	factors.
	Earnings were unchanged despite such factor as
	lower domestic sales prices for pharmaceuticals amid
Core Operating	National Health Insurance drug price revisions. This
was because constrained activities owing to the
Income
COVID-19 pandemic suppressed spending on selling,
	general and administrative expenses, and research
	and development.

Note:

Royalty revenue from Novartis Pharma for Gilenya, a treatment agent for multiple sclerosis, was reduced, because a part of the royalty revenue was not recognized as sales revenue in accordance with IFRS 15 due to the start of arbitration proceedings.

2.7

10

Consolidated Special Items

									(Billions of Yen)
				FY2020 1Q		FY2019 1Q		Difference
		Total Special Items		8.7		(0.2)			8.9
		Gain on sale of property, plant and equipment		8.1		0.9			7.2
		Gain on sale of intercompany securities		0.9		0.4			0.5
		Loss on sale and disposal of fixed assets		(0.2)		(0.6)			0.4
		Impairment loss		(0.0)		(0.7)			0.7
		Others		(0.1)		(0.2)			0.1
		[Special Items by Business Segment]
		Performance Products		0.8		0.2			0.6
		Chemicals		(0.0)		0.0			(0.0)
		Industrial Gases		-		(0.6)			0.6
		Health Care		8.1		(0.0)			8.1
		Others		(0.2)		0.2			(0.4)

11

Consolidated Cash Flows

Net cash provided by (used in) operating activities

Income before taxes

Depreciation and amortization

Change in operating receivables/payables

Change in Inventories

Others

Net cash provided by (used in) investment activities

Capital expenditure

Sale of assets

Investment and loans receivable, etc.

Free cash flow

Net cash provided by (used in) financing activities

Interest bearing debts

Additional acquisition of consolidated subsidiaries' stocks Dividends, etc.

Net increase (decrease) in cash and cash equivalents

Effect of exchange rate changes and changes in scope of consolidation

Cash and cash equivalents at the beginning of the period

Cash and cash equivalents at the end of the period

Based on statements

of cash flows

FY2020 1Q

FY2019 1Q

70.1 103.7

20.4 67.3

59.6 59.6

14.4 22.2

12.6 (5.2)

(36.9) (40.2)

22.7 (47.3)

(60.5) (56.0)

14.62.8

68.65.9

92.8 56.4

72.3 (109.1)

190.4 (64.4)

*2	(95.8)	(1.4)
	(22.3)	(43.3)

165.1 (52.7)

0.3(9.3)

228.2 321.5

393.6 259.5

Adjusted cash flows *1

(Billions of Yen)

FY2020 1Q	FY2019 1Q

70.1 103.7

20.4 67.3

59.6 59.6

14.4 22.2

12.6 (5.2)

(36.9) (40.2)

(47.3) (57.4)

(60.5) (56.0)

14.62.8

(1.4) (4.2)

22.8 46.3

*1 Adjusted cash flows based on actual results are calculated by excluding cash flows from investment of surplus funds for explanatory purposes.

*2 ¥95.4 billion in additional acquisitions of MTPC shares

12

Consolidated Statements of Financial Positions

(Billions of Yen)

(Billions of Yen)

	Jun. 30, 2020	Mar. 31, 2020	Difference		Jun. 30, 2020	Mar. 31, 2020	Difference
Cash and cash equivalents	393.6	228.2	165.4	Interest-bearing debt	2,587.6	2,388.1	199.5
Trade receivables	621.4	698.5	(77.1)	Trade payables	334.8	398.1	(63.3)
Inventories	594.7	606.5	(11.8)	Other liabilities	765.1	895.1	(130.0)
Other current assets	137.1	216.1	(79.0)	Total liabilities	3,687.5	3,681.3	6.2
Total current assets	1,746.8	1,749.3	(2.5)	Shareholders' equity	1,232.1	1,234.5	(2.4)
Tangible and Intangible fixed assets	2,257.1	2,252.8	4.3	Other components of equity	(66.6)	(64.3)	(2.3)
Goodwill	623.2	616.8	6.4	Total equity attributable to	1,165.5	1,170.2	(4.7)
owners of the parent
Investment and other
507.6	513.2	(5.6)	Non-controlling interests	281.7	280.6	1.1
non-current assets
Total non-current assets	3,387.9	3,382.8	5.1	Total equity	1,447.2	1,450.8	(3.6)
Total assets	5,134.7	5,132.1	2.6	Total liabilities and equity	5,134.7	5,132.1	2.6
				Net interest-bearing debt *1	2,194.0	2,089.9	104.1
				Net D/E ratio	1.88	1.79	0.09
				Ratio of equity attributable to owners	22.7%	22.8%	(0.1%)
				of the parent
				ROE *2	-	4.2%	-

*1 Net interest-bearing debt (End of Jun. 30, 2020) = interest-bearing debt (2,587.6 billion yen)

- {cash and cash equivalents (393.6 billion yen) + investments of surplus funds (0.0 billion yen)} Note： Interest-bearing debt includes lease obligations.

*2 Ratio of net income attributable to owners of the parent.

13

References 1

14

Statement of Operations [Quarterly Data]

Exchange Rate (¥/$)

Naphtha Price (¥/kl)

Continuing	Sales Revenue
Core Operating Income	*1
	Special Items
	Operating Income
*Operations
Financial Income/Expenses
(Dividend included above)
	(Foreign Exchange Gain/Loss included above)
	Income before Taxes
2	Income Taxes

Net Income from Continuing Operations

Net Income from Discontinued Operations

Net Income

Net Income Attributable to Owners of the Parent

Net Income Attributable to Non-Controlling Interests

*1 Share of profit of associates and joint ventures included. *2 Discontinued operations not included.

109.7	107.7	109.3	109.1		107.4
45,400	40,200	41,300	44,800		25,000
					(Billions of Yen)
	FY2019			FY2020
1Q	2Q	3Q	4Q		1Q
916.4	911.3	903.1	849.7		722.7
70.1	60.7	50.2	13.8		15.0
(0.2)	0.0	(20.2)	(30.1)		8.7
69.9	60.7	30.0	(16.3)		23.7
(3.3)	(4.9)	(7.7)	(6.4)		(3.3)
[2.9]	[0.1]	[1.1]	[0.1]		[2.5]
[(0.3)]	[0.7]	[(2.8)]	[(1.3)]		[0.0]
66.6	55.8	22.3	(22.7)		20.4
(18.2)	(19.4)	(15.7)	1.0		(12.2)
48.4	36.4	6.6	(21.7)		8.2
0.5	16.4	-	-		-
48.9	52.8	6.6	(21.7)		8.2
37.8	43.5	(5.0)	(22.2)		5.2
11.1	9.3	11.6	0.5		3.0
5.0	3.1	2.6	2.7		0.2

15

Sales Revenue and Core Operating Income by Business

Segment [Quarterly Data]

	Total Consolidated	Sales Revenue
	Core Operating Income
		Functional Products	Sales Revenue
		Core Operating Income
		Performance Chemicals	Sales Revenue
		Core Operating Income
	Performance Products	Sales Revenue
	Core Operating Income
		MMA	Sales Revenue
		Core Operating Income
		Petrochemicals	Sales Revenue
		Core Operating Income
		Carbon Products	Sales Revenue
		Core Operating Income
	Chemicals	Sales Revenue
	Core Operating Income
	Industrial Gases	Sales Revenue
	Core Operating Income
	Health Care	Sales Revenue
	Core Operating Income
	Others	Sales Revenue
	Core Operating Income

							Impact of COVID-19
				(Billions of Yen)		(Approximation)
	FY2019			FY2020		FY2019		FY2020
1Q	2Q	3Q	4Q		1Q		4Q		1Q
916.4	911.3	903.1	849.7	722.7
70.1	60.7	50.2	13.8		15.0		(7.8)		(38.2)
171.8	175.4	172.3	160.9		142.7
12.6	13.9	9.0	4.0		8.7		(0.7)		(6.9)
104.8	105.1	104.3	103.5		82.5
6.9	7.2	5.1	4.4		1.3		(1.1)		(6.3)
276.6	280.5	276.6	264.4		225.2
19.5	21.1	14.1	8.4		10.0		(1.8)		(13.2)
77.7	72.1	59.2	53.5		52.5
13.8	11.4	0.5	(1.9)		(1.2)		(2.9)		(5.9)
134.7	137.1	137.3	125.3		84.2
0.8	1.0	1.0	(4.9)		(13.6)		(2.2)		(10.4)
71.7	63.8	62.2	48.9		44.4
6.0	2.9	1.0	(1.8)		(1.3)		(0.9)		(3.1)
284.1	273.0	258.7	227.7		181.1
20.6	15.3	2.5	(8.6)		(16.1)		(6.0)		(19.4)
208.6	210.9	208.8	215.0		182.9
21.1	23.2	22.2	21.5		13.5				(8.3)
107.9	97.4	116.6	91.2		100.2
9.3	0.5	11.0	(6.2)		8.8				2.7
39.2	49.5	42.4	51.4		33.3
(0.4)	0.6	0.4	(1.3)		(1.2)				0.0

*1 All figures are approximation for reference purpose only.

*2 Starting from FY2020, the segmentation of certain businesses and consolidated subsidiaries in MCC has been reviewed. The segment information for FY2019 is accordingly restated.

16

			Business Segment Information
	Business	Business	Business Sub-Segment
	Domain	Segment			Businesses
				Information,	Optical films, display- and semiconductor-related products
				Electronics and Displays
				High Performance Films	Packaging films, Industrial films
			Functional
			Environment and Living	Aqua and separator solutions, Infrastructure solutions and agricultural
			Products
			Solutions	materials
	Performance	Performance		Advanced Moldings	High performance engineering plastics, Fibers and textile, Carbon fiber and
		composite materials, Functional moldings and composites, Almina fiber and
	Products	Products		and Composites
		light metal products
				Advanced Polymers	Performance polymers, Engineering polymers, Sustainable resources
			Performance
			High Performance	Performance chemicals, Performance materials, Food ingredients
			Chemicals	Chemicals
				New Energy	Lithium ion battery materials, Energy transduction materials
			MMA	MMA	MMA
	Industrial	Chemicals	Petrochemicals	Petrochemicals	Basic petrochemicals, Polyolefins, Basic chemical derivatives
	Materials		Carbon Products	Carbon	Carbon Products
		Industrial			Industrial gases
		Gases
					Pharmaceuticals
	Health Care	Health Care
			Life science	17

References 2

18

Mitsubishi Tanabe Pharma Corporation

Q1 FY2020 Business Results

(April - June, 2020)

August 4, 2020

19

Q1 FY2020 Business Results

Q1 FY2020 Financial Results

	Q1	Comparison to previous year	Comparison to forecasts*1
	FY2020	Q1 FY2019	Increase	Change	Full-year	Achieved
	(decrease)
	Billion yen	Billion yen	Billion yen	％	Billion yen	％
Revenue	91.8	98.1	(6.3)	(6.5)	383.5	23.9
(Domestic)	75.7	80.8	(5.0)	(6.2)	314.1	24.1
(Overseas)	16.1	17.4	(1.3)	(7.5)	69.4	23.1
Overseas sales ratio	17.5%	17.7%			18.1%
Cost of sales	45.6	44.8	0.8	1.8	187.5	24.3
Sales cost ratio	49.7%	45.6%			48.9%
Gross profit	46.2	53.3	(7.2)	(13.4)	196.0	23.6
SG&A expense, etc.	36.6	43.6	(7.0)	(16.0)	186.0	19.7
(R&D expense)	15.3	19.9	(4.6)	(23.3)	83.5	18.3
Core operating profit	9.6
9.8	(0.2)	(1.8)	10.0	95.8
Non-recurring items*2	8.1	(0.1)	8.2	-	7.0	115.6
Operating profit	17.7	9.6	8.0	83.6	17.0	103.9
Financial income and loss*2	0.2	(0.4)	0.6	-
Net profit attributable to owners of the Company	11.5	6.9	4.6	67.1	8.5	135.3
Average exchange rate US$	¥107.38	¥109.67			¥108.00

*1 Announced on May 13, 2020 *2 Brackets indicate expense and loss

20

Q1 FY2020 Business Results

Details of Revenue

			Q1	Comparison to previous year	Comparison to forecasts*
			FY2020	Q1 FY2019	Increase	Change	Full-year	Achieved
			(decrease)
			Billion yen	Billion yen	Billion yen	％	Billion yen	％
	Domestic ethical drugs	73.3	78.2	(4.9)	(6.2)	303.6	24.1
		Priority products	45.3	46.5	(1.2)	(2.5)	182.3	24.9
		Vaccines	7.5	7.3	0.2	3.0	41.0	18.3
		Long-listed drugs, etc.	20.4	24.3	(3.9)	(16.1)	80.3	25.4
	Overseas ethical drugs	12.6	12.6	0.0	0.4	50.9	24.8
		Radicava	5.6	6.1	(0.5)	(8.9)	22.4	24.9
	Royalty revenue, etc.	3.8	5.1	(1.3)	(25.7)	19.9	18.9

*Announced on May 13, 2020

21

Q1 FY2020 Business Results

Domestic Ethical Drugs

Revenue of Priority Products and Vaccines

	Q1	Comparison to previous year	Comparison to forecasts*
	FY2020	Q1 FY2019	Increase	Change	Full-year	Achieved
	(decrease)
	Billion yen	Billion yen	Billion yen	％	Billion yen	％
Remicade	11.9	14.4	(2.6)	(17.7)	44.8	26.6
Simponi	10.7	10.5	0.2	1.4	42.3	25.2
Stelara	7.0	6.2	0.8	12.5	32.8	21.2
Tenelia	4.1	4.7	(0.6)	(12.7)	14.9	27.5
Canaglu	2.5	2.2	0.4	17.3	9.2	27.7
Canalia	2.5	2.2	0.3	15.3	9.3	27.2
Lexapro	3.9	3.9	(0.0)	(0.6)	14.6	26.5
Rupafin	1.7	1.3	0.4	33.1	10.2	16.2
Imusera	1.1	1.1	(0.0)	(4.2)	4.1	26.5
Total of priority products	45.3	46.5	(1.2)	(2.5)	182.3	24.9
Influenza vaccine	(0.0)	(0.0)	(0.0)	-	12.2	(0.3)
Tetrabik	2.7	2.4	0.3	12.9	11.3	23.8
Mearubik	1.9	1.9	(0.0)	(0.4)	6.4	29.4
JEBIK V	1.4	1.5	(0.1)	(4.1)	5.3	27.1
Varicella vaccine	1.3	1.3	(0.0)	(2.1)	4.8	26.1
Total of vaccines	7.5	7.3	0.2	3.0	41.0	18.3
Total of priority products	52.8	53.8	(1.0)	(1.8)	223.3	23.7
and vaccines

*Announced on May 13, 2020

22

Q1 FY2020 Business Results

Revenue Trends

JPY b	Stelara	+0.8
	Remicade	-2.6

Talion -0.4

Ceredist -0.4

Radicut -0.3

Maintate -0.3

Tetrabik +0.3

The impact of NHI drug price revision -5.0

Gilenya* -0.6

Radicava -0.5

Domestic ethical drugs

-4.9

* Including a decline of "GILENYA® Royalty" amounts which will not be recognized as sales revenue during arbitration proceedings 23

Major Development Pipeline

Topics in 1st Quarter of FY2020

Global Projects

Code	Indications	Stage	Topics
	Amyotrophic lateral sclerosis︓		• Global P3 study (long-term safety study) is ongoing.
MT-1186	P3	• Due to the impact of novel coronavirus infection, etc.,
ALS
		it is expected to be launched in FY2022.
			• Global P3 study (BouNDless study) is ongoing.
ND0612	Parkinson's disease	P3	• The impact of novel coronavirus infection, etc. on the
			development plan is being scrutinized.
	Erythropoietic protoporphyria,	P3	• Global P3 study was started in June.
MT-7117	• Orphan Drug Designation was obtained from FDA in
X-linked protoporphyria
		June.
			• Obtained the good results in nonclinical studies.
	Prophylaxis of COVID-19	P1	• Announced a collaboration agreements with GSK and
MT-2766	Dynavax respectively regarding the use of their
(Plant-based VLP* vaccine)
		adjuvants in July.
			• P1 study was started in July.

Late Stage Projects in Japan

*VLP : Virus-like particle

MT-6548	Renal anemia	Approved	•	Approved in Japan in June. Product name: Vafseo
MT-0551	Neuromyelitis optica spectrum	Filed	•	J-NDA submission in June.
disorder︓NMOSD

24

Late Stage Projects in Japan

MT-6548 (Vadadustat, Product name: Vafseo)

Obtained marketing approval in Japan in June 2020

Mechanism of	Hypoxia-inducible factor prolyl hydroxylase (HIF-PH) inhibitor
action
Origin	Akebia Therapeutics, Inc. (United States)
Development
Approved
stage
Indication	Renal anemia
	• Once-daily oral treatment
Features	• Treatment effect for anemia by stimulate endogenous
erythropoietin production within physiological range
	• Can be used for renal anemia in both dialysis-dependent and
	non-dialysis dependent patients

25

Bridging Diabetes and Kidney Diseases in Japan

Becoming the best partner in closely related diabetes and kidney disease areas through optimal treatment proposals

DiabetesKidney

Canaglu	Canaglu
(Diabetic Nephropathy)
	Additional indication planned for FY2023
Canalia	Vafseo (Renal anemia)
Approved in Japan (June 2020)

TeneliaKremezin

October 2019: Diabetes and kidney area managers were assigned nationwide.

April 2020: Diabetes and renal product marketing department was established.

May 2020: Co-marketing agreement concluded with Fuso Pharmaceutical for Vafseo in the area of dialysis.

26

Late Stage Projects in Japan

MT-0551 (Inebilizumab)

Japan NDA filed in June 2020

	Mechanism	Humanized anti-CD19 monoclonal antibody
	of action
	Origin	Viela Bio, Inc. (United States)
	Development
	Filed in Japan (June 2020)
	stage	(US: Viela Bio received approval in June 2020)
		Neuromyelitis Optica Spectrum Disorder (NMOSD):
	Indication	• Rare, severe, relapsing, autoimmune disease of central nervous system that
	can be fatal.
		• It may cause pain in the eye and vision loss, severe muscle weakness,
		paralysis, numbness, loss of bladder and bowel control and respiratory failure.
	Number of	[Japan] Approximately 4,000
	patients
		• Every 6 months infusion as a maintenance monotherapy*1
	Features	• 73% reduction in the risk of NMOSD attacks*2, and reduction also in
	worsening of EDSS*3, hospitalizations, and MRI*4 lesions
		• Orphan Drug Designation in Japan in February 2020
	Future plans	Launch in FY2021
*1: 300 mg intravenous (Day 1, 15, and every 6 months thereafter)	*2: N-MOmentum Study, N=230, intention-to-treat analysis
*3: Expanded Disability Status Scale	*4: Magnetic Resonance Imaging

27

Global Projects

MT-7117

Global P3 study was started in June 2020
Mechanism	Selective melanocortin 1 receptor (MC1R) agonist
of action
Origin	in-house created product
Development
Phase 3
stage
	Erythropoietic protoporphyria (EPP): The main symptom is photosensitivity. An
Indication	inherited disease with painful redness, swelling, blisters and erosions following
sun exposure
	X-linked protoporphyria (XLP): An inherited disease with symptoms similar to EPP
Number of	[Japan, the US., and EU Total] EPP : Approximately 10,000
patients	XLP : Said to be lower than that with EPP
	• An oral agent to prevent photosensitivity
Features	• Activation of MC1R promotes melanogenesis in melanocytes and prevents
cutaneous symptoms caused by ultraviolet light
	• FDA Fast Track designation for EPP granted in June 2018 and Orphan Drug
	designation in June 2020
Future plans	NDA submission in FY2021

28

Global Projects

MT-2766

Medicago VLP Vaccine aims to prevent COVID-19

Category	Plant-based VLP (virus-like particle) vaccine
Origin
Medicago Inc.（Canada）
Stage
Phase 1
Indications
Prophylaxis of COVID-19
Design of P1	To assess the safety and immunogenicity of MT-2766 at three dose levels
unadjuvanted or adjuvanted with either GSKʼs or Dynavaxʼs adjuvant*,
Study
administered on a one- and two-dose vaccination schedule, given 21 days apart
	• VLPs have the same external structure as viruses, so VLP vaccines are
	expected to provide high levels of immune-acquisition effect
Feature	• Shorter time for manufacture by Medicagoʼs plant-based technology
	• In July 2020, Medicago announced a collaboration agreement with GSK and
	Dynavax respectively regarding the use of their adjuvants
Schedule
Targeting the completion of clinical studies in 2021
in future
	*An adjuvant is a substance that is used concomitantly to enhance or support the effects of drugs
	and is expected to enhance immunogenicity when administered with vaccines.

29

Major Development Pipeline List

								Progress Update
								As of July 25, 2020
Priority	Code	Region	Indications	P1	P2	P3	Filed	Approved
areas
	MT-1186	Global	ALS/oral suspension
	ND0612	Global	Parkinson's disease
	MT-8554	Global	Vasomotor symptoms associated with			preparing
Central nervous	menopause
system	MT-3921	Global	Spinal cord injury
	MT-0551	Japan	Neuromyelitis Optica Spectrum
	Disorder
	MT-5199	Japan	Tardive dyskinesia
	MT-7117	Global	Erythropoietic protoporphyria,
	X-linked protoporphyria
Immuno-
MT-2990	Global	Endometriosis
inflammation
	MT-5547	Japan	Osteoarthritis
	MT-3995	Global	Non-alcoholic steatohepatitis(NASH)
Diabetes and	MT-6548	Japan	Renal anemia
kidney	TA-7284	Japan	Diabetic nephropathy
	MP-513	China	Type 2 diabetes mellitus
Vaccines	MT-2766	Global	Prophylaxis of COVID-19
MT-2355	Japan	5 combined vaccine*

* Prophylaxis of pertussis, diphtheria, tetanus, poliomyelitis and prophylaxis of Hib infection in infants

30

Launch Plan for Major Development Pipeline

FY 2020

FY 2021

FY 2022

FY 2023

Central

nervous

system

Immuno-

inflammation

Diabetes

and kidney

Vaccines

MCI-186		MT-0551		MT-1186 *
ALS		NMOSD		ALS (oral suspension)
(China)		(Japan)		(Global)
				ND0612
				Parkinson's disease
				(Global)
				MT-5199
				Tardive dyskinesia
				(Japan)
				MT-7117
				EPP, XLP
				(Global)
				MT-5547
				Osteoarthritis
				(Japan)
MT-6548		MP-513 OD Tablets
Renal anemia		Type 2 diabetes mellitus
(Japan)		(Japan)
MP-513
Type 2 diabetes mellitus
(China)
				MT-2355
				5 combined vaccine
				(Japan)

: Global

（US launch year） : Japan/China

*Launch plan reflecting

the impact of COVID-19, etc.

TA-7284

Diabetic nephropathy

(Japan)

31

Cautionary Statement

The statements contained in this presentation is based on a number of assumptions and belief in light of the information currently available to management of the company and is subject to significant risks and uncertainties.

It contains information about pharmaceuticals included products under development, but is not intended for advertising or medical advice.

32

The forward-looking statements are based largely on company expectations and information available as of the date hereof, and are subject to risks and uncertainties, which may be beyond company control.

Actual results could differ materially due to numerous factors, including without limitation, marketing conditions and the effects of industry competition.

33