Mitsubishi Materials : Summary of Explanation and Q&A on Conference Call（Financial Results Briefing for the Three Months Ended June 30, 2021）

Financial results briefing for the Three Months Ended June 30, 2021

Mitsubishi Materials Corporation revised upward its full year earnings forecast due to an increase in demand for automobile and semiconductors related products in addition to a hike in metal prices.

Nobuhiro Taka anagi (hereinafter referred to as Taka anagi ): Hello, I am Taka anagi, Managing E ecutive

Officer. Thank	ou ver much for taking time to attend our financial results briefing for the first quarter ended
June 30, 2021. I ould like to present an overvie	of the financial results and forecast for the fiscal ear
ending March 31, 2022 (hereinafter referred to as	FY2022 )
C	a	P	Y a R	(C	a	S a
O	a	)

Please refer to the ear-on- ear comparison of results on page 5 of our handout. Net sales increased due to a hike in metal prices, stead demand for automobile related products in the Advanced Products Business and Metal orking Solutions Business, and stead demand for semiconductors related products in the Advanced Products Business.

On the other hand, e also had negative factors such as a decrease in domestic demand for cement, and

unfortunatel ,	e had a decrease in sales of read -mi ed concrete in the U.S. due to the shortage of drivers.
As a result, compared to the same period of the previous fiscal ear hen sales decreased significantl	due to
the impact of COVID-19, net sales increased b 83.3 billion en to 427.6 billion en. Regarding profits, I	ill
e plain later	ith a aterfall graph on page 7.

C a

P

Y a R

(S a

)

Page 6 illustrates the statistics.

Sales volume of the copper & copper allo products increased, mainl for automobile applications.

Sales volume of the electrol tic copper cathodes (in-house)	as affected b	a decline in production of anodes
due to furnace repairs at the Naoshima Smelter & Refiner	during Februar	to March in the previous fiscal
ear. In addition, the production volume of the Onahama Smelting and Refining Co.,Ltd. continues to be
affected b a production cutback due to the equipment failure at a compan	providing o gen that occurred in
Januar 2021.
As for PT. Smelting, the sales volume of copper cathodes	as do n ear on ear, as sho n in the slide, due
to a slight decline in the grade of copper in the ore.
Regarding the mine dividend, a portion of the dividend income from the Los Pelambres copper mine,	hich
as e pected to be recorded in the second half of FY2022,	as brought for	ard to the first quarter. I	ould
like to talk about this later, as the Compan e pects an increase for the full	ear.

No , let me e plain the total domestic demand for cement. Unfortunatel , the demand has declined compared to the same period of the previous ear, hen the impact of COVID-19 started to appear. The domestic sales volume for the cement has been declining.

On the other hand, hereas the Compan sa decreases in demand in major regions last ear, sales volume for e ports has increased in the first quarter of FY2022 thanks to the normali ed e ports to major regions.

As mentioned earlier, in terms of sales volume of the read -mi concrete in the U.S., sales volume of Robertson s Read Mi , Ltd. has declined due to a driver shortage caused b tight suppl and demand of labor market in the U.S. This as partl due to the fact that the compan had been refraining from hiring ne mi er drivers slightl since the second half of the previous fiscal ear, partiall because it as a period of lo demand.

Cement sales volume in the U.S. decreased due to the decline of the volume of cement taken in from our main bu er, Robertson Read Mi , Ltd because it affected b those factors.

Sales volume of the aluminum e truded products increased, mainl for automobile products.

C a

P

Y a R

(Fa A a

O a P )

Please refer to page 7. The aterfall graph illustrates the change in ordinar profit. As sho n in the bar graph on the slide, ordinar profit for the first quarter of FY2022 is 25.1 billion en, increased b 22.0 billion en

ear-on- ear from 3.1 billion en.

Main factor included in the Price difference is strong prices in the palladium and other metals in the Metals Business, hich I have mentioned earlier.

The main factor included in the Quantit variation is an increase in sales volume in the Advanced Products and the Metal orking Solutions Business. And as for the Dividend income, a portion of dividend income from Los Pelambres Mine, hich as e pected to be recorded in the second half of the fiscal ear, has been brought for ard to the first quarter.

As for the Share of profit (loss) of entities accounted for using equit	method, this figure is due to improved
earnings at the Copper Mountain Mine, resulting from a hike in copper price, etc.
C	a	P	Y a R	(Fa	A a	S	) )

No , let me e plain the breakdo n of factors b	business segment. Let me start ith the Advanced Products
Business. Regarding the Copper & copper allo	in the Advanced Products Business, the operating results

turned from loss to profitable due to the increase in the sales of automobile related products. In addition, the Electronic materials & components business recorded an increase in profits due to higher sales in products for the automobile and semiconductors industries.

Also, the Metal orking Solutions Business recorded an increase in profits mainl due to a recover in demand from major automobile manufacturers in both domestic and major overseas countries.

And, regarding other, the Compan transferred the Sintered parts business in December 2020, hich had been recording operating losses on a continuous basis, resulting in a decrease in net sales but an improvement in operating profit.

On the other hand, despite the rapid rise in demand and improvement in margin, the acceleration of inventor stock-out of the high book value in FY2021 had a slight negative impact.

No , let s proceed to the Metals Business. The increase in profit as due to a hike in metal prices, improved sulfuric acid prices, and an increase in dividends from copper mines.

Operating income in the Cement Business as generall unchanged from the previous fiscal ear. There has been a decrease in sales volume in both Japan and the U.S., but this has been offset b raising prices or

e ports.

The Environment & Energ Business recorded an increase in profit, mainl due to an increase in the processing volume of home appliance rec cling.

In the Aluminum rolled and e truded products business, in addition to the increased demands for the automobile products, the stable production has also contributed to the profit, resulting in an increase in profit.

FY2022 P

a

F

a (S a

/S

/A

)

I ould like to e plain the performance forecast for FY2022 on page 10.

First, let me start ith statistics. The Compan e pects the sales volume of copper & copper allo products to be the same level as the previous forecast.

The sales volume of the Compan s in-house copper cathodes products is e pected to increase slightl compared to the initial forecast, due to the fact that the resolution of the trouble ith the o gen supplier at the Onahama Smelter and Refining Co., Ltd., hich I mentioned earlier, is e pected to be slightl faster.

The figures of PT. Smelting s copper cathodes sales volume takes into account the fact that the current (for the first half of FY2022) decline in grade in copper is still ongoing.

Regarding the mine dividends, as I mentioned earlier, part of the dividend from the Los Pelambres copper mine, hich as e pected to be recorded in the second half of FY2022, has been brought for ard to the first quarter. In addition, taking into account the assumed copper price in the second half of the fiscal ear, the Compan e pects an increase for the full ear.