Mitsubishi Chemical Gloup Corporation (4188) June 24, 2026 Annual General Meeting Transcript

This is the outline of the business report and others for the 21st fiscal year of Mitsubishi Chemical Group Corporation. Please refer to page 17 of the convocation notice. First, the business development and performance. The company operates in four segments, specialty materials, MMA and derivatives. basic materials and polymers, and industrial gases. The global market of U.S. trade policies continue to spread across various regions affecting the business environment surrounding our group. Nevertheless, overall economic growth remains solid, supported by robust U.S. consumer spending and capital investment driven by AI-related demand, as well as the recovering Japanese consumer spending and robust corporate earnings fueled by improvements in the employment and income conditions, in addition to China's economic stimulus measures and stable consumer spending in Europe, underpinned by a strong employment environment. However, since March 2026, the outlook has remained uncertain due to rising geopolitical risks, particularly in the Middle East, which have contributed to surging prices for certain raw materials and fuels. Against this backdrop, the group posted sales revenue of 3,704 billion yen. Core operating income was 225 billion yen, and operating income was 30.1 billion yen. Net income attributable to owners of the parent was 11.8 billion yen Next, I will explain the performance of each segment First, for the speciality materials segment sales revenue was 1 trillion 59.6 billion yen and co-operating income was 32.2 billion yen in advanced films and polymers. Although selling prices were maintained or improved, sales revenue decreased due to the transfer of shares of J-Film Corporation and transfer of business such as Threat Athletic, Fiber and customer inventory adjustments resulting from a rebound decline in the strong demand seen in the previous fiscal year for display applications. In advanced solutions, sales revenue decreased due to the transfer of shares of MCC Sports Company Limited, decrease in sales volume resulting from weakening demand for EV applications in Europe and U.S., and decrease in sales volume for housing and construction materials primarily in Japan. However, core operating income increased owing to maintaining or raising selling prices of various products. In advanced composites and shapes, sales volumes decreased due to the partial suspension of general-purpose filing lines in the carbon fiber business, but demand increased primarily for semiconductor manufacturing equipment applications in high-performance engineering plastics. Coupled with increased sales of carbon-fibre composite parts and positive effects impacts, sales revenue increased. Co-operating income increased despite recognition of an impairment, loss of soanol-related fixed assets in the UK, and cost increases. due to inflation. This growth was driven by the absence of impact of impairment loss on production facilities and intangible asset of Jalesting, recognized previous year. Additionally, factors such as improvements in the gross margins due to generally higher prices in semiconductor-related businesses, increased demand for high-performance engineering plastics, mainly for semiconductor manufacturing equipment, Higher sales of carbon fiber composites, parts, and rationalization effects from reviewing production basis for each business contributed to the increase. Next word, MMA and deliverance segment. Sales revenue was 351.9 billion yen with core operating loss of 1.5 billion yen. In MMA, sales revenue decreased primarily due to holding market conditions for products, including MMA monomers. In coatings and additives, despite selling prices being maintained or improved, sales revenue decreased due to lower sales volumes caused by weakening demand for coating adhesives, inks, and additive applications. specifications. Core operating income decreased due to a deterioration in the gross margin caused by falling market conditions for MMA monomers and lower sales volumes from a general decline in demand. Next, for basic materials and polymer segment, sales revenue was 790.7 billion yen and core operating income resulted in a loss of 4.2 billion yen. In materials and polymers, Sales revenue decreased due to the impact of transferring shares of a specific subsidiary in PTA business, lower selling prices, accompanying falling raw material cost, and decrease in sales volume for polyolefin and FX impacts. In carbon, sales revenue dropped due to the impact of sales of shares of specific subsidiary in the coke business, lower sales volumes from reduced coke production capacity, and lower coke selling prices driven by falling raw material costs and sluggish demand. Co-operating income for this segment improved, although there was a worsening of inventory valuation gains and losses in materials and polymers, cost inflation, and the recording of impairment losses of ethylene oxide and ethylene glycol manufacturing facilities. Improvements were driven by a widening price gap between raw materials and products in polyolefins Better inventory valuation gains and losses in the carbon business Gross margin improvements from structural reforms and cost reductions Next for the industrial gases segment Sales revenue was 1,352,000,000,000,000 yen, and core operating income was 200,000,000,000,000,000 yen. Although sales were lower due to generally soft domestic and international demand, sales revenue increased due to effects, impacts, the effect of price management promoted in each region, and impact of consolidating plant engineering companies in Europe as well as industrial gas businesses in Australia and New Zealand following their acquisition. Co-operating income increased due to price management and cost reduction despite rising electricity costs in the U.S. and deterioration in sales volume, primarily in Europe and the U.S. Finally, for the other segment, sales revenue was 149.3 billion yen, and core operating income was 13.5 billion yen. This concludes presentation on current status of the group. Next, the overview of our consolidated financial statements. Please refer to page 46 of the convocation notice. Regarding the consolidated statement of financial position, total assets amounted to 5,876,000,000 yen, down 18,000,000,000 yen from the end of the previous fiscal year, primarily due to a decrease in assets resulting from the transfer of Tanabe Mitsubishi Pharma Corporation. Total liabilities amounted to 3,461.9 billion yen, down 148.1 billion yen, primarily due to a decrease in corporate bonds and borrowings. Total equity amounted to 2,414.7 billion yen, up 130.1 billion yen, primarily due to an increase in translation differences for overseas operations and the recognition of net income on non-controlling interests. This concludes our overview of the consolidated financial statements. Next, President Chikimoto will present his report.