Sumitomo Chemical : Reports Consolidated Financial Results For the Three Months Ended June 30, 2021

For Immediate Release

August 3, 2021

Sumitomo Chemical Reports

Consolidated Financial Results

For the Three Months Ended June 30, 2021

For the first quarter ended on June 30, 2021, the Sumitomo Chemical Group reported consolidated sales revenue of ¥639.0 billion, an increase of ¥138.8 billion year on year, core operating income* of ¥61.7 billion, operating income of ¥58.3 billion, and net income attributable to owners of the parent of ¥35.7 billion; all higher than the results from the same period of the previous year.

*Core operating income is a gain and loss concept, reflecting recurring earning capacity, and deducts gains and losses incurred by non-recurring factors from operating income. It includes the share of profit from investments accounted for using the equity method.

The financial results by business segment for the first quarter are as follows:

Petrochemicals & Plastics

Shipments and market prices of petrochemical products, synthetic resins and synthetic fibers performed well. Thereby sales revenue increased by ¥91.3 billion to ¥199.5 billion and core operating income recovered by ¥43.7 billion, to ¥23.8 billion, compared with the same period of the previous year, when the shipment volumes decreased due to the periodic shutdown maintenance for Rabigh Refining and Petrochemical Company, our equity method investee, and due to the impact of the COVID-19 pandemic, mainly on demand for automotive use.

Energy & Functional Materials

Shipments of separators for lithium-ion secondary batteries performed well. Market prices for aluminum and for the metal raw materials for cathode materials increased, resulting in higher selling prices. For the same period of previous year, shipments were lower, mainly for automotive use, due to the COVID-19 pandemic. As a result, sales revenue increased by ¥26.0 billion from the same period of previous year, to ¥74.4 billion. Core operating income increased by ¥4.7 billion from the same period of previous year, to ¥6.7 billion.

IT-related Chemicals

Shipments of processing materials for semiconductors (including high purity chemicals and photoresists) increased, driven by growing demand for these items. Shipments of materials for display applications increased in the face of stay-at-home demand and telework demand. As a result, sales revenue increased by ¥5.4 billion from the same period of previous year, to ¥109.3 billion, and core operating income increased by ¥3.6 billion from the same period of previous year, to ¥13.5 billion.

Health & Crop Sciences

Shipments of crop protection products in North America, South America and India performed well. Market prices of methionine (feed additives) increased from the same period of the previous year. As a result, sales revenue increased by ¥14.2 billion from the same period of previous year, to ¥103.1 billion. Core operating income increased by ¥6.7 billion from the same period of previous year, to ¥10.3 billion.

Pharmaceuticals

In North America, Orgovyx™ (therapeutic agent for advanced prostate cancer), which was launched in the previous fiscal year, and Gemtesa® (therapeutic agent for overactive bladder) and Myfembree® (therapeutic agent for uterine fibroids), which commenced sales this quarter, contributed to the sales revenue. However, declines in sales of Brovana® (therapeutic agent for chronic obstructive pulmonary disease) caused by the expiration of the exclusive marketing period, and Latuda® (atypical antipsychotic agent) affected by an increase in shipments in the second half of the previous fiscal year caused a negative impact. In addition, in Japan, sales revenues were adversely affected by national drug price revisions. As a result, sales revenue decreased by ¥1.6 billion from the same period of the previous year, to ¥139.2 billion. Core operating income decreased by ¥14.9 billion from the previous year, to ¥9.6 billion. The reason for the decline as well as lower sales revenue was the increase in selling, general and administrative expenses due to the start of full-scale marketing activities by subsidiaries of Sumitovant Biopharma Limited.

Others

In addition to the above five segments, the Sumitomo Chemical Group supplies electric power and steam, designs chemical plants and supervises the construction of those facilities, provides transportation and warehousing, and conducts physical property analysis and environmental analysis. Sales revenue of these businesses increased by ¥3.4 billion from the same period of previous year, to ¥13.6 billion, and core operating income increased by ¥0.4 billion from the same period of previous year, to ¥2.7 billion.

Summary of Consolidated Results

(1) Results of Operations:		3 Months ended					3 Months ended
		June 30, 2021					June 30, 2020
Sales revenue		Yen (Millions)	USD (Thousands)*				Yen (Millions)
	638,979			5,778,432				500,188
Core operating income		61,664			557,642				19,862
(Share of profit of investments	(	14,742 )	(	133,315 )	(	(13,306) )
accounted for using the equity method)
Operating income		58,344			527,618				18,467
Income before taxes		56,693			512,688				13,578
Net income		38,884			351,637				1,371
Net income attributable to
non-controlling interests		3,225			29,164				8,712
Net income attributable to
owners of the parent		35,659			322,472				(7,341)
Net income per 1,000 shares		Yen		USD*		Yen
	21,810			197				(4,490)
Comprehensive income		Yen (Millions)	USD (Thousands)*		Yen (Millions)
	39,232			354,784				(3,003)
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(2) Financial Position:		As of June 30, 2021				As of March 31, 2021
Total assets		Yen (Millions)	USD (Thousands)*			Yen (Millions)
	4,093,065			37,014,514				3,990,254
Total equity		1,503,702			13,598,318				1,482,119
(3) Cash Flows:		3 Months ended					3 Months ended
		June 30, 2021					June 30, 2020
Cash flows from operating activities		Yen (Millions)	USD (Thousands)*			Yen (Millions)
	4,690			42,413				55,587
Cash flows from investing activities		(41,274)			(373,250)				(44,168)
Cash flows from financing activities		41,457			374,905				126,598
Cash and cash equivalents at end of period		366,457			3,313,954				329,698
(4) Results of Operations by		3 Months ended					3 Months ended
䚷䚷䚷Business Segment:		June 30, 2021					June 30, 2020
Sales revenue		Yen (Millions)	USD (Thousands)*			Yen (Millions)
	199,532			1,804,413				108,243
Petrochemicals & Plastics
Energy & Functional Materials		74,385			672,680				48,345
IT-related Chemicals		109,266			988,117				103,845
Health & Crop Sciences		103,066			932,049				88,851
Pharmaceuticals		139,161			1,258,464				140,766
Others		13,569			122,709				10,138
Core operating income		638,979			5,778,432				500,188
	23,822			215,428				(19,850)
Petrochemicals & Plastics
Energy & Functional Materials		6,710			60,680				1,978
IT-related Chemicals		13,480			121,903				9,855
Health & Crop Sciences		10,283			92,991				3,550
Pharmaceuticals		9,648			87,249				24,531
Others		2,747			24,842				2,374
Adjustments		(5,026)			(45,451)				(2,576)
		61,664			557,642				19,862

(Note)

• *U.S. dollar amounts are translated from yen, for convenience only, at the rate of

¥110.58 = $1 prevailing on June 30, 2021.

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