FY2009 Financial Resultsand Outlook for FY2010

May 2010
2010

FY2009 Financial Results

2

FY2009 Financial Results
FY2008FY2009Change¥1,788.2 bn¥1,620.9 bn- ¥167.3 bn

Operating income¥2.1 bn¥51.5 bn

+ ¥49.3 bn

Ordinary income- ¥32.6 bn¥35.0 bn

+ ¥67.6 bn

Net income- ¥59.2 bn¥14.7 bn

+ ¥73.9 bn

Naphtha price¥58,900/kl¥41,200/kl

Exchange rate

¥100.71/US$¥92.89/US$¥9/share¥6/share

Sales

Dividend per share3

FY2009 Sales by Segment(Billions of yen)

Shipping
volumevariance

FY2008FY2009ChangeSales pricevariance

Basic Chemicals

240.0

203.3

-36.7

-41.0

+4.3

Petrochemicals &Plastics

553.0

481.5

-71.4

-127.0+55.6

Fine Chemicals

80.8

67.6

-13.2

-4.0

-9.2

IT-related Chemicals

307.1

265.2

-41.9

-40.0

-1.9

Agricultural Chemicals

222.2

211.5

-10.7

-7.0

-3.7

Pharmaceuticals

235.6

267.5

+31.9

－+31.9Others

149.5

124.3

-25.3

－-25.3

1,788.2 1,620.9-167.3-219.0

+51.7

Total
Sales outside of Japan

749.8

728.9

-20.9

Percentage of sales
outside of Japan42%45%－4

Change in Operating Income FY2008/2009
FY2008 ¥2.1 bn → FY2009 ¥51.5 bn（+ ¥49.3 bn））(Billions of yen)

80
60

51.5

40
20

2.10Margins-35.0
Rationalization
+20.0

-20

Fixed costs-5.0-40
FY2008Volumes &others+69.3
FY20095

FY2009 Operating Income by Segment(Billions of yen)

FY2008FY2009 Change

Major factors for changes in profit
Improvement in inventory valuation gains andlosses
 Lower fixed costs in Singapore operations
 Improvement in inventory valuation gains andlosses Increase in shipping volumes
Basic Chemicals-15.3-2.7+12.7

Petrochemicals& Plastics

-30.3

-5.3

+25.0

Fine Chemicals

1.6

1.5

-0.1

-1.0

3.3+4.3

24.4

25.9+1.5

IT-related
Chemicals
AgriculturalChemicals



Decrease in shipping volumes

Progress in rationalization
Increase in shipping volumes

Increase in shipping volumes

Pharmaceuticals

32.4

29.3

-3.0

Increase in loss from retirement benefit
adjustment
 Increase in amortization and other costs
following the acquisition of Sepracor

Others

-9.6-0.6+9.0



Total

2.1

51.5+49.3

Decrease in R&D expenses

6

FY2009 Financial Results
FY2008FY2009Change¥1,788.2 bn¥1,620.9 bn- ¥167.3 bn

Operating income¥2.1 bn¥51.5 bn

+ ¥49.3 bn

Ordinary income- ¥32.6 bn¥35.0 bn

+ ¥67.6 bn

Net income- ¥59.2 bn¥14.7 bn

+ ¥73.9 bn

Naphtha price¥58,900/kl¥41,200/kl

Exchange rate

¥100.71/US$¥92.89/US$¥9/share¥6/share

Sales

Dividend per Share

7

Consolidated Results and Interest-Bearing Liabilities
Net Sales & Net Income
Net sales (left axis)

Net income (right axis)

Operating income （right axis）
250

2,000
1,500
1,000

1,296.3

1,790.0
139.6

102.4

1,788.2

64.5

90.7

93.9

2.1

51.5
14.7

FY2004

FY2005

FY2006

FY2007200-59.2
FY20081005063.1-500-1,0001,620.9

150

105.2

500
0

1,556.6
120.8

1,896.5

FY20090(Billions of yen)(Billions of yen)

2,500

-50
-100

Interest-Bearing Liabilities & D/E Ratio(Billions of yen)

1,200

997.9

1,000

795.4

800
600

D/E ratio (right axis)

470.7
0.7

400578.6
0.6

641.0

673.9

0.6

0.7

1.0

1.2

2.4
2.0
1.6
1.20.8(Times)

Interst-bearing liabilities (left axis)

0.4

2000.00

FY2004

FY2005

FY2006

FY2007

FY2008FY20098

Outlook for FY2010

9

Outlook for FY2010
FY2009FY2010(Forecast））

ChangeSales¥1,620.9 bn¥2,000.0 bn+ ¥379.1 bn

Operating income¥51.5 bn¥35.0 bn

- ¥16.5 bn

Ordinary income¥35.0 bn¥35.0 bn

＋ 0.0 bn
－Net income¥14.7 bn¥25.0 bn

+ ¥10.3 bn

EBITDA¥167.2 bn¥200.0 bn+ ¥32.8 bn

Naphtha price¥41,200/kl¥50,000/kl

Exchange rate

¥92.89/US$¥90.00/US$

Dividend per share¥6/share¥9/share10

FY2010 Sales by Segment(Billions of yen)

FY2009FY2010(Forecast））

ChangeSales pricevariance

Shipping
volumevariance

Basic Chemicals

203.3

235.0

+31.7

+14.5

+17.2

Petrochemicals &Plastics

481.5

700.0

+218.5+88.0+130.5

95.0
315.0
220.0
345.0
90.0

+27.4
+49.8
+8.5
+77.5
-34.3

0.0
-29.0
-2.0
-15.0

Others

67.6
265.2
211.5
267.5
124.3

－+27.4
+78.8
+10.5
+92.5
-34.3

Total

1,620.9

2,000.0+379.1+56.5+322.6

Fine ChemicalsIT-related Chemicals
Agricultural Chemicals
Pharmaceuticals

Note: Certain consolidated subsidiaries, formerly categorized under the Others segment, have been recategorized toFine Chemicals (impact of ¥19.1 bn).

Sales outside of Japan
Percentage of sales
outside of Japan

728.
728.9

1,060.0

+331.
331.1

45%

53%

－11Change in Operating Income FY2009/2010
FY2009 ¥51.5 bn → FY2010 ¥35.0 bn（- ¥16.5 bn））(Billions of yen)

80
60

51.5

Margins-43.5

Volumes &others+109.0

Rationalization
+22.0

40

35.
35.0

Fixed cost
-104.0200-20-40Lower prices for
LCD materials
 NHI drug pricerevision-60

Sepracor (Includes
amortization of patentrights, etc)
 Methionine
 ResorcinolIncrease insales atSepracor
 LCD materials
 Methionine
 Resorcinol
-80
FY2009FY2010(Forecast)
12

FY2010 Operating Income by Segment(Billions of yen)

FY2009 FY2010 Change

Actualdifference

Major factors forchanges in profit

Basic Chemicals-2.7

4.0+6.7+2.7Petrochemicals& Plastics-5.3

9.0+14.3+9.2



Increase in sales volumes
Improvement in margins

Improvement in margins
 Increase in sales volumes
Increase in Resorcinol production
capacity
 Increase in depreciation


Fine Chemicals

1.5

2.5+1.0-1.1

IT-related
Chemicals

3.3

18.5

+15.2

+12.2

AgriculturalChemicals

Progress in rationalization
Increase in sales volumes

Increase in methionine production
capacity
 Increase in depreciation


25.9

24.0

-1.9

-5.2

Increase in amortization and othercosts following the acquisition ofSepracor
 NHI drug price revisionPharmaceuticals

29.3

0-29.3-29.8



Others

-0.6

-23.0

-22.4

-4.4

Total51.5

35.0

-16.5

-16.5

Decrease in operating income inengineering & construction
management and power generation
businesses

Notes 1: From FY2010, we have revised our method of allocation of R&D expenses for companywide projects, etc.
2: Certain consolidated subsidiaries, formerly categorized under the Others, have been recategorized to Fine Chemicals.
13Change in Operating Income FY2009/2010 (Pharmaceuticals)
FY2009 ¥29.3 bn → FY2010 ¥0.0 bn（- ¥29.3 bn））
(Billions of yen)

40

29.3

30

Margins-15.0

Increase inearnings from Increase inSepracor amortization cost+5.0-25.7
Volumes &Others+6.4

20
Amortization cost ofpatent rights, etc.
- ¥10.5 bn → - ¥36.2 bn

10

Lowering selling prices inaccordance with NHI drug
price revision

Earnings from Sepracor¥8.3 bn → ¥13.3 bn

00FY2009

FY2010(Forecast)14

Outlook for FY2010
FY2010FY2009(Forecast））

ChangeSales¥1,620.9 bn¥2,000.0 bn+ ¥379.1 bn

Operating income¥51.5 bn¥35.0 bn

- ¥16.5 bn

Ordinary income¥35.0 bn¥35.0 bn

＋ 0.0 bn
－Net income¥14.7 bn¥25.0 bn

+ ¥10.3 bn

EBITDA¥167.2 bn¥200.0 bn+ ¥32.8 bn

Naphtha price¥41,200/kl¥50,000/kl

Exchange rate

¥92.89/US$¥90.00/US$

Dividend per share¥6/share¥9/share15

Achieving the Goals of the Corporate Business Plan

16

Forecasts for fiscal 2010 and targets for fiscal 2012
FY2010(Forecast））

FY2012(Target））

ChangeSales¥2,000.0 bn¥2,400.0 bn+ ¥400.0 bn

Operating income¥35.0
35.0 bn¥190.0 bn+ ¥155.0 bn

Ordinary income¥35.0
35.0 bn¥220.0 bn+ ¥185.0
85.0 bn

Net income¥25.025.0 bn¥140.0 bn+ ¥115.0
15.0 bn

Naphtha price¥50,000/kl¥50,000/kl

Exchange rate

¥90.00/US$¥90.00/US$

17Change in Operating Income FY2010/FY2012
FY2010 ¥35.0 bn → FY2012 ¥190.0 bn（+ ¥155.0 bn））
(Billions of yen)

250

Volumes& others+138.0

200

190.0
190.0

150
100
50

35.0

Margins-63.0

Fixed costs+21.0
Rationalization+59.00-50
FY2010(Forecast)

FY2012(Target)18

Sales and Operating Income by Segment for FY2010/2012(Billions of yen)
FY2010FY2012（Target））

Change235.0

270.0+35.0

 Increase in sales of PMMA

income

4.0

17.0

+13.0

 Continued rationalization and reduction of procurement

Sales

700.0

785.0

+85.0

 Improve margins

Operatingincome

9.0

30.0

+21.0

Sales

95.0

135.0

+40.0

Operatingincome

2.5

16.0

+13.5

Sales

315.0

395.0

+80.0

 Expand and strengthen polarizing film business

Operating
Income

18.5

44.0

+25.5

 Improve the performance ofSales

220.0

270.0

+50.0

Operatingincome

24.0

48.0

+24.0

Sales

345.0

390.0

+45.0

income

0.0

38.0

+38.0

Sales

90.0

155.0

+65.0

Operatingincome-23.0

-3.0

+20.0

Sales

2,000.02,400.0+400.0

35.0

190.0

+155.0（Forecast)
Sales

Basic Chemicals Operating
Petrochemicals& Plastics
Fine Chemicals
IT-related
Chemicals
AgriculturalChemicals

Pharmaceuticals Operating

Others

Total

OperatingincomeMajor factors for changes in profit
 Develop new applications and increase sales of alumina

costs Expand business in the area of high value added

applications

 Fully utilize our new resorcinol plant Expand pharmaceutical chemicals business Expand photoresists businessbattery materials businessin the short-term
 Expand sales areas and enter new business fields incrop protection business Expand household insecticides and pest control
products in environmental health business Expand scale of feed additives business Launch and expand sales of Lurasidone

amortization and other costs related tothe acquisition of Sepracor Decrease in Launch polymer organic LED materials

19Basic Chemicals Sector
FY2012 Target

Change in Operating Income: FY2010 Forecast vs. FY2012 Target¥270.0 billion

25

 Operating income¥17.0 billion

20

 Increase in sales of PMMA+2.05(Billions of yen)

225.8

FY2010(Forecast)
Operating income (right axis)

40314.7240.0

203.3

235.0

10.6

270.0
17.0

4.0

100

10.00-100

FY2012(Target)Sales (left axis)

232.6

200

Fixed costs
+1.0

4.00

Sales & Operating Income
300

Rationalization
Margins +3.010

 Continued rationalization and reductionof procurement costs

314.0

17.015

 Develop new applications and increase
sales of alumina

400

Volumes &others +7.0

20
10-2.7

13.5

30

0

5.2-15.3(Billions of yen)

Assumptions and initiatives for achieving targets(Billions of yen)

 Sales-10-200-20

FY2004

FY2005

FY2006

FY2007

FY2008FY2009FY2010(Forecast)FY2012(Target)20

Petrochemicals & Plastics Sector
FY2012 Target

Change in Operating Income: FY2010 Forecast vs. FY2012 Target¥785.0 billion

 Operating income¥30.0 billion

Assumptions and initiatives for achieving targets

 Improvement in margins
 Expanding our business in the area ofhigh value added applications

40(Billions of yen)

 SalesVolumes &others
30.0+9.0

30

Fixed costs
+2.0

20

10

9.0Margins+7.0
Rationalization+3.00

FY2010(Forecast)(Billions of yen)

800

4000412.6
15.0486.1
17.9539.1
23.6

Sales (left axis)603.3553.0

Operating income (right axis)

700.0

785.0

9.0

30.0

481.5

4.5-5.3

200-30.3-400

40-20-800(Billions of yen)

Sales & Operating Income

FY2012(Target)-40

FY2004

FY2005

FY2006

FY2007

FY2008FY2009FY2010(Forecast)

FY2012(Target)21

Fine Chemicals Sector
FY2012 Target

Change in Operating Income: FY2010 Forecast vs. FY2012 Target¥135.0 billion

 Operating income¥16.0 billion

Assumptions and initiatives for achieving targets

 Fully utilize our new resorcinol plant2016.0(Billions of yen)

 Sales10

 Expand pharmaceutical chemicals
business

2.5

Fixed costs+3.0
Rationalization
Volumes &Margins +1.0
others
+2.0+7.5

0FY2010(Forecast)

Sales & Operating Income

FY2012(Target)Sales (left axis)

Operating income (right axis)

200

20

13.1
11.5

11.4

9.8

95.0

100

84.10

FY200479.0

FY200590.9

FY200692.9

FY2007

80.8

67.6

1.6

1.5

FY2008FY2009

135.0
102.5

FY2010(Forecast)

FY2012(Target)(Billions of yen)(Billions of yen)

16.0022

IT-related Chemicals Sector
FY2012 Target

Change in Operating Income: FY2010 Forecast vs. FY2012 Target¥395.0 billion

75

 Operating income¥44.0 billion

50

Assumptions and initiatives for achieving targets

 Expand and strengthen polarizing filmbusiness(Billions of yen)

 Sales

25

44.0
18.5

Margins-58.0

0

Rationalization
+50.0

-25

 Expand photoresists business
FY2010(Forecast)

FY2012(Target)Sales (left axis)

Operaring income (right axis)

44.0

500
400

174.8

229.2

266.4

297.5

307.1

315.0
265.2

40

395.0

18.5

200
100

50

30
20

18.7

6.3

21.7

-1.0

3.3

100

(Billions of yen)

Sales & Operating Income(Billions of yen)

Volumes &others+28.5-50

 Improve the performance of battery
materials business in the short-term

300

Fixed costs+5.003.5-100

FY2004

FY2005

FY2006

FY2007

FY2008FY2009FY2010(Forecast)

FY2012(Target)-1023

Agricultural Chemicals Sector
FY2012 Target

Change in Operating Income: FY2010 Forecast vs. FY2012 Target¥270.0 billion

60

 Operating income¥48.0 billion

50

 Expand sales areas and enter new businessfields in crop protection business Expand household insecticides and pest control
products in environmental health business48.04030

24.020
10

Fixed cosst+5.0
Margins-1.0
Volumes &others
Rationalization
+18.0
+2.00

FY2010(Forecast) Expand scale of feed additives business

Sales & Operating Income

FY2012(Target)Sales (left axis)

Operating income (right axis)(Billions of yen)

300

270.0
222.2

200

171.6

186.2

198.3

200.4
20.9

211.5

220.0
48.0

24.4

25.9

60

40

24.0

100

20

(Billions of yen)

Assumptions and initiatives for achieving targets(Billions of yen)

 Sales

23.3
0

14.8

16.6

FY2004

FY2005

FY2006

FY2007

FY2008FY2009FY2010(Forecast)

FY2012(Target)024

Business Tie-up and Strategic Investment in Nufarm
Overview of Nufarm

Target of the tie-up and strategic investment

1. Company Name: Nufarm Limited
2. Established: 1957
3. Sales: AU$2,677 million (¥214.2 billion)(Results ended July 2009)
4. Headquarters: Melbourne, Australia
5. Employees: 3,155 (as of July 31, 2009)
6. CEO: Doug Rathbone

Further strengthen and expand agricultural chemicals
business through comprehensive business tie-up inmarketing, R&D etc.

Strategic investment

Progress in business tie-up

1. Tender Offer Summary

1. Use Nufarm’s marketing channels forSumitomo Chemical products

Offer period: March 12 - April 9, 2010
 Offer price: AU$14 per share Total acquisition cost: AU$611 million (¥51.3 billion)
 Payment and share acquisition carried out:April 15, 2010
 Sumitomo Chemical’s stake after acquisition: 20%


2. Equity raising through issuance of newsharesDate of settlement: May 5, 2010

Amount underwritten by Sumitomo Chemical:
AU$50 million (¥4.3 billion)(20% of total raised equity of AU$250 million)

In FY2012, the final year of the Corporate
Business Plan, a ¥10 .0 billion increase in income
before income taxes (including income from equity inearnings of affiliate) is factored in.

Brazil: Sales agreement completed (February 2010)
Sales to be launched between October and December 2010
 Indonesia, Central and Eastern Europe, Canada, etc:
Sales agreements under negotiation


2. Market Nufarm products throughSumitomo Chemical’s marketing channels
Launched detailed negotiations

3. Joint R&D
Contract negotiations are underway in the following areas:
1. Product development by sharing each other’s knowledge informulation
2. Evaluation of Sumitomo Chemical’s new products by Nufarm
25

Pharmaceuticals Sector
FY2012 Target

Change in Operating Income: FY2010 Forecast vs. FY2012 Target¥390.0 billion

 Operating income¥38.0 billion

Assumptions and initiatives for achieving targets

 Launch and expand sales of Lurasidone

60(Billions of yen)

 SalesVolumes &others
38.0
+49.0

40200

 Decrease in amortization and other costs
related to the acquisition of Sepracor±0Margins-15.0-20

Fixed costs+4.0
Rationalization
0FY2010(Forecast)

Sales & Operating Income

FY2012(Target)

Sales (left axis)

Operating income (right axis)
60(Billions of yen)

500
400

34.4

56.2

46.5
38.0

32.4
267.5

300
200

38.3

170.7

233.1

234.5

237.6

345.0
390.0

235.6
29.3

100

50403020
100.00(Billions of yen)

6000-100-10

FY2004

FY2005

FY2006

FY2007

FY2008FY2009FY2010(Forecast)

FY2012(Target)26

Preparation for launch of Lurasidone
Schizophrenia
 North America
December 2009: NDA submitted to FDA (9 months
earlier than planned)
October 2010: FDA’s review results to be obtainedFirst quarter of 2011: Launch expected Europe
Seeking marketing partners
After the partner is decided, necessary
additional trials for European applications willtake place before launch (timing of launchundetermined)

Sales network in North America
 Planned deployment of 300 Medical
Representatives at launch(Sepracor personnel and new hires)*Start recruitment as soon as approval is obtained Increase in medical representatives planned after
new indication for bipolar disorder is approved

Sales forecast for Lurasidone(Billions of yen)

 Japan, South Korea, Taiwan
2008: Launched joint trials in Japan, South Koreaand Taiwan
Japanese NDA will be submitted based onthe results of joint trial

50

Bipolar disorder
December 2008: Began Phase III clinical trials
First half of 2012: FDA application expected in US
2013: New indication approval expected

0FY2012FY201427

Improving Financial Structure
Cash Flows(Billions of yen)

FY2010
Corporate Business Plan･･･(Forecast)
FY2010-FY2012 (Target)

FY2007-FY2009

Cash flows fromoperating activities
Cash flows frominvesting activities

367.9

120.0 ･･･

510.0

-658.3180.0 ･･･

510.0

Free cash flows-290.4-60.0 ･･･

0Interest-Bearing Liabilities & D/E Ratio

Interst-bearing liabilities (left axis)

1,200

997.9

1,080.0

D/E ratio (right axis)

1,020.0

2.0

795.4

800
600

470.7
0.7

400

578.6
0.6

641.0

673.9

0.6

0.7

1.0

1.2

1.3

1.6

1.00.8200
01.2(Times)(Billions of yen)

1,000

2.4

0.4

FY2004

FY2005

FY2006

FY2007

FY2008FY2009FY2010(Forecast)

FY2012(Target)0.028

Creative Hybrid Chemistry29

Forward-Looking Statements
Statements made in this material with respect to Sumitomo Chemical’s plans,
projections, strategies, beliefs, and future performance that are not historicalfacts are forward-looking statements that are based on information available
at the time of the preparation of this material and include risks anduncertainties. Factors that could materially affect actual results of Sumitomo
Chemical’s future performance include, but are not limited to, economicconditions in the areas of Sumitomo Chemical’s business, demand for
Sumitomo Chemical’s products in markets, downward price pressure on
Sumitomo Chemical’s products resulting from intensifying competition,
Sumitomo Chemical’s ability to continue to provide products that areaccepted by customers in highly-competitive markets, and movements ofcurrency exchange rates.

30