For Immediate Release                            May 15, 2018

Sumitomo Chemical Announces
Consolidated Financial Results for FY2017

Beginning this consolidated fiscal year, the Sumitomo Chemical Group is adoptinginternational financial reporting standards (IFRS) in place of Japanese GAAP, which it
previously used, and is therefore restating figures for the previous consolidated fiscal year
using IFRS for comparative analysis.
The world economy remained strong for this fiscal year, with the US continuing to see
economic expansion supported by rising employment numbers and strong consumer
demand, Europe continuing its steady recovery, despite issues such as the UK leaving theEU, and emerging nations, including China, seeing movement towards economic recovery.
At the same time, the Japanese economy has continued a steady trend toward recovery due
to improvements in wages and the job market as well as strong corporate earnings.
Under these circumstances, the Sumitomo Chemical Group undertook group-wide efforts toimprove business performance. At the same time, the Group worked to further accelerate its
transformation into a more resilient Sumitomo Chemical that continues to grow, based on thecurrent three-year Corporate Business Plan for fiscal 2016 to 2018 that has a basic policy offurther improving business portfolio, generating more cash flow, and accelerating the launchof next-generation businesses.
As a result, the Sumitomo Chemical Group’s sales revenue for this fiscal year totaled¥2,190.5 billion, an increase of ¥251.4 billion compared with the previous fiscal year. The
Group posted core operating income of ¥262.7 billion, operating income of ¥250.9 billion, andnet income attributable to owners of the parent of ¥133.8 billion, all of which surpassed theresults for the previous fiscal year.
The Sumitomo Chemical Group’s financial results by business segment for the fiscal year are
as follows.
“Core operating income” is a gain and loss concept that reflects recurring earning capacity. It
excludes gains and losses from non-recurring factors from operating income, including
share of profit of investments accounted for using the equity method.

Petrochemicals & Plastics
Market prices of petrochemical products and synthetic resins rose because of higher
feedstock prices. Market prices of raw materials for synthetic fibers and methyl methacrylate(MMA) also increased. In addition, for associates accounted for using the equity method, theearnings of Petrochemical Corporation of Singapore (Pte.) Ltd. remained strong, while theearnings of Rabigh Refining and Petrochemical Company improved due chiefly to acontinued high level of capacity utilization and rising market price of petrochemical products.
As a result, the segment’s sales revenue grew by ¥116.3 billion compared with the previous
fiscal year, to ¥674.1 billion. Core operating income increased by ¥35.7 billion, to ¥94.6 billion.
Energy & Functional Materials
Shipments of resorcinol, a raw material for adhesives, and engineering plastics increased
due to a rise in demand. Shipments of separators for lithium-ion secondary batteries alsorose due to production capacity expansion. In addition, the acquisition of a manufacturer ofcathode materials in the previous fiscal year pushed up sales. As a result, the segment’s
sales revenue increased by ¥44.6 billion compared with the previous fiscal year, to ¥251.0
billion. Core operating income grew by ¥13.2 billion, to ¥19.2 billion.
IT-related Chemicals
Shipments of touchscreen panels and polarizing film increased due to growth in demand
while selling prices declined. The weaker yen had a positive effect on sales from overseas
subsidiaries in yen terms. As a result, the segment’s sales revenue increased by ¥10.2 billion
compared with the previous fiscal year, to ¥368.7 billion. Core operating income rose by ¥3.6
billion, to ¥12.3 billion.
Health & Crop Sciences
Sales of the feed additive methionine dropped due to lower market prices. Meanwhile, theacquisition of an Indian agrochemicals company in the previous fiscal year boosted sales. As
a result, the segment’s sales revenue increased by ¥19.1 billion compared with the previous
fiscal year, to ¥339.7 billion. Core operating income declined by ¥3.5 billion, to ¥44.0 billion.
Pharmaceuticals
In North America, sales of Latuda® (atypical antipsychotic) and other drugs increased
steadily. In Japan, sales of Trulicity® (type 2 diabetes drug), Aimix® (anti-hypertension drug)and other drugs rose as well. As a result, the segment’s sales revenue increased by ¥59.3
billion from the previous fiscal year, to ¥500.2 billion. Core operating income grew by ¥24.9
billion, to ¥94.8 billion.

Others
In addition to the above five segments, the Sumitomo Chemical Group engages in supplying
electrical power and steam, providing services for the design, engineering, and construction
management of chemical plants, providing transport and warehousing, and conducting
materials and environmental analysis. The segment’s sales revenue increased by ¥2.0 billion
from the previous fiscal year, to ¥56.8 billion. Core operating income grew by ¥0.9 billion, to¥11.1 billion.
The Company has decided to pay a year-end dividend of ¥12 per share. As a result, theCompany’s annual dividend for fiscal 2017 is ¥22 per share, including an interim dividend of¥10 per share.
Net cash provided by operating activities in fiscal 2017 was ¥293.3 billion, an increase of¥107.5 billion compared to the previous fiscal year, due chiefly to a rise in operating income
and a decrease in income taxes paid. Net cash used in investing activities was ¥154.5 billion,a decrease in cash outflows of ¥51.2 billion compared to the previous fiscal year, due mainly
to the acquisition of Cynapsus Therapeutics Inc. (the present Sunovion CNS Development
Canada ULC) and Tolero Pharmaceuticals Inc. by Sumitomo Dainippon Pharma, a subsidiaryof Sumitomo Chemical, in the previous fiscal year. This resulted in free cash flow of ¥138.7
billion for fiscal 2017, compared with negative ¥19.9 billion for the previous fiscal year. Net
cash used in financing activities was ¥94.3 billion. The balance of cash and cash equivalents
at the end of the fiscal year increased by ¥38.6 billion over the previous fiscal year, to ¥231.9
billion.
For fiscal 2018, the Company forecasts that sales revenue will increase by 13.7%, to ¥2,490.0
billion, while core operating income and operating income are projected to be ¥240.0 billionand ¥205.0 billion, respectively, and net income attributable to owners of the parent to be¥130.0 billion, assuming an exchange rate of ¥110.0/US$ and a naphtha price of ¥47,000/kl.
The Company plans to pay an interim dividend of ¥11 per share and a year-end dividend of¥11 per share, making the Company’s annual dividend for fiscal 2018 ¥22 per share,unchanged from the previous fiscal year.

Consolidated statements of profit or loss
Years ended March 31, 2018(FY2017) and 2017(FY2016)

Millions of yen
FY2017FY2016

Thousands of
US dollars*
FY2017

Sales revenue

2,190,509

1,939,069

20,618,496

Cost of sales(1,440,635)(1,308,824)(13,560,194)

Gross profit
Selling, general and administrative expenses
Other operating income
Other operating expenses
Share of profit of investments accounted forusing the equity method
Operating income

749,874

630,245

7,058,302(557,888)(533,890)(5,251,205)

25,262

14,661

237,783(21,644)(26,787)(203,727)

55,31942,238520,698
2,361,851

250,923

126,467

Finance income

11,542

10,700108,641

Finance expenses(21,654)(14,829)(203,822)
2,266,670

Income before taxes
Income tax expenses
Net income

240,811

122,338(62,653)(13,238)(589,731)

178,158

109,100

1,676,939

1,259,111

Net income attributable to:
Owners of the parent

133,768

76,540Non-controlling interests

44,39032,560417,828

Net income

178,158

109,100

1,676,939

Yen
FY2017FY2016

US dollars*
FY2017

Earnings per share:
Basic earnings per share

81.81

46.81

0.77

Diluted earnings per share

81.77

46.77

0.77

Yen
FY2017FY2016

US dollars*
FY2017

Dividends per share:
Interim dividends

10.00

7.00

0.09

Year-end dividends

12.00

7.00

0.11

For the year

22.00

14.00

0.21

(Note)*U.S. dollar amounts are translated from yen, for convenience only, at the rate of䚷䚷 ¥106.24= $1 prevailing on March 31, 2018.

Consolidated statements of comprehensive income
Years ended March 31, 2018(FY2017) and 2017(FY2016)
Millions of yen
FY2017
Net income

FY2016

Thousands of
US dollars*
FY2017

178,158

109,100

1,676,939

18,236

5,619

171,649

4,975

7,258

46,828

455

1,954

4,283

23,666

14,831

222,760

Other comprehensive income䠖䚷Items that will not be reclassified to profit or loss
Remeasurements of financial assets measured at fair value
through other comprehensive income
Remeasurements of defined benefit plans
Share of other comprehensive income of investments accounted forusing the equity method
Total items that will not be reclassified to profit or loss
䚷Items that may be subsequently reclassified to profit or loss
Cash flow hedge

2,349

(483)

22,110(16,907)

1,586(159,140)(2,705)(4,072)(25,461)(17,263)(2,969)(162,491)

6,403

11,86260,269184,561

120,962

1,737,208

Owners of the parent

142,421

88,2581,340,559

Non-controlling interests

42,14032,704

396,649

Total comprehensive income

184,561

120,962

1,737,208

Exchange differences on translation of foreign operations
Share of other comprehensive income of investments accounted forusing the equity method
Total items that may be subsequently reclassified to profit or loss
Other comprehensive income, net of taxes
Total comprehensive income
Total comprehensive income attributable to䠖(Note)*U.S. dollar amounts are translated from yen, for convenience only, at the rate of䚷 䚷¥106.24= $1 prevailing on March 31, 2018.

Consolidated statements of cash flows
Years ended March 31, 2018(FY2017) and 2017(FY2016)
Thousands of
US dollars*
FY2017

Millions of yen
FY2017FY2016

Cash flows from operating activities:
Income before taxes

240,811

122,338

2,266,670

Depreciation and amortization

107,103110,308

1,008,123

Impairment loss

12,37836,525116,510

Reversal of impairment loss

(3,477)

㸫(32,728)

Share of profit of investments accounted for using the equity method(55,319)(42,238)(520,698)Interest and dividend income(10,101)(8,967)(95,077)

Interest expenses

10,646

11,145100,207

Business structure improvement expenses

14,21018,186

133,754

Changes in fair value of contingent consideration(8,383)

6,507(78,906)

Gain on sale of property, plant and equipment(6,801)(1,035)(64,015)

㸫

(2,840)㸫

Increase in trade receivables(24,617)(43,452)(231,711)

Increase in inventories(55,626)(3,292)(523,588)

Increase in trade payables

73,607

31,665

692,837

Increase in provisions

10,514

17,232

98,965

Others, net(7,170)(17,592)(67,491)

Subtotal

2,802,852

Gain on step acquisitions

297,775

234,490

Interest and dividends received

41,742

42,978392,903

Interest paid

(10,534)(11,322)(99,153)(270,585)

Income taxes paid

(28,747)(64,303)

Business structure improvement expenses paid

(6,986)(16,067)(65,757)

Net cash provided by operating activities

293,250

185,7762,760,260(1,404,433)

Cash flows from investing activities:
Purchase of property, plant and equipment, and intangible assets(149,207)(137,989)

Proceeds from sale of property, plant and equipment, and intangible assets

10,2003,424

96,009Purchase of investments in subsidiaries(13,236)(99,388)(124,586)

Purchase of other financial assets(134,375)(14,276)(7,451)

Proceeds from sales and redemption of other financial assets

6,092

35,59657,342Others, net

5,907

111

55,600(154,520)(205,697)(1,454,443)(777,353)

Net cash used in investing activities

Cash flows from financing activities:
Net (decrease) increase in short-term borrowings(82,586)

109,154

Net increase (decrease) of commercial paper

34,000(24,000)

320,030

Proceeds from long-term borrowings

81,69033,557

768,919(555,196)

Repayments of long-term borrowings(58,984)(49,326)

Proceeds from issuance of bonds

39,79029,837374,529

Redemption of bonds(55,000)(55,000)(517,696)

Repayments of lease obligations(3,281)(2,995)(30,883)

Cash dividends paid

(27,797)(21,258)(261,643)

Cash dividends paid to non-controlling interests
Payments for acquisition of subsidiaries' interestsfrom non-controlling interests
Others, net(15,569)(16,880)(146,546)(6,588)(4,475)(62,011)

61

863

576

Net cash used in financing activities(94,264)(523)(887,274)(54,895)

Effect of exchange rate changes on cash and cash equivalents(5,832)(1,892)

Net increase (decrease) in cash and cash equivalents

38,634(22,336)

363,648

Cash and cash equivalents at beginning of year

193,295

215,631

1,819,419

Cash and cash equivalents at end of year

231,929

193,295

2,183,067(Note)
㻌*U.S. dollar amounts are translated from yen, for convenience only, at the rate of㻌¥106.24= $1 prevailing on March 31, 2018.

Segment information
Years ended March 31, 2018(FY2017) and 2017(FY2016)
Millions of yen
Reporting segments
Petrochemicals&
Plastics

Energy &Functional
Materials

IT-related
Chemicals

Health &Crop Sciences

Pharmaceuticals

Total

OthersAdjustments

Consolidated

FY2017
Sales revenue
Sales revenues fromexternal customers
Inter-segment
sales revenues

674,116

250,988368,709339,698

500,227

2,133,738

56,771

㸫

2,190,509

6,461

6,449

885

3,650

10

17,45570,776(88,231)㸫

Total sales revenue

680,577

257,437

369,594

343,348500,237

2,151,193

127,547(88,231)2,190,509

Segment profit(core operating income)

94,567

19,18912,341

43,964

94,786

264,847

11,052(13,205)

262,694

Segment assets

769,570

290,920357,697555,598

869,658

2,843,443

295,625(70,383)

3,068,685

22,963

13,916

29,571

16,181

15,084

97,715

5,925

3,463

107,103

48,373(46)(1,897)

1,625

(10)

48,045

7,086

188

55,319

3,192

132

4,045

2,846

2,147

12,36216

ʊ

12,378

Reversal of impairment loss

ʊ

3,477

ʊ

ʊ

ʊ

3,477

ʊ

ʊ

3,477

Investments accounted
for using the equity method

157,504

194

6,848

31,114686

196,346

101,415(3,391)

294,370

Capital expenditures

17,40822,521

24,49856,334

21,238141,999

12,6204,220

158,839557,852

206,414

358,473

320,613440,974

1,884,326

54,743

ʊ

1,939,069

8,809

5,480

1,109

4,422

9

19,82949,730(69,559)ʊTotal sales revenue

566,661

211,894359,582

325,035

440,983

1,904,155

104,473(69,559)

1,939,069

Segment profit(core operating income)

58,884

6,030

8,714

47,44069,871

190,939

10,146(16,538)

184,547

Segment assets

709,379

248,756

339,598

492,114841,024

2,630,871

263,598(16,276)

2,878,193

22,846

12,706

31,723

16,174

15,456

98,905

7,498

3,905

110,308

33,986

ʊ

(762)

2,273

47

35,544

6,645

49

42,238

8,746

12,685

12,286554

2,254

36,525ʊʊ

36,525Investments accounted
for using the equity method

144,789

ʊ

5,469

26,507

821

177,586

94,712(3,579)268,719

Capital expenditures

30,64021,91333,534

24,168

14,947125,202

5,092

6,055

136,349

Other items
Depreciation andamortization
Share of profit (loss) ofinvestments accounted
for using the equity method
Impairment loss

FY2016
Sales revenue
Sales revenues fromexternal customers
Inter-segment
sales revenues

Other items
Depreciation andamortization
Share of profit (loss) ofinvestments accounted
for using the equity method
Impairment loss

Segment information
Years ended March 31, 2018(FY2017) and 2017(FY2016)
Adjustments to income before taxes from segment profit were as follows:
Millions of yen
FY2017
Segment profit
Business structure improvement expenses

FY2016262,694

184,547(14,210)(18,186)(12,378)(36,525)

Gain on sale of property, plant and equipment

6,801

1,035

Changes in fair value of contingent consideration

6,146(6,507)

Reversal of impairment loss

3,477

㸫

Impairment loss

Gain on step acquisitions

㸫

2,840

Others, net(1,607)(737)

Operating income
Finance income

250,923

126,467

11,542

10,700Finance expenses(21,654)(14,829)

Income before taxes

240,811

122,338

Overseas operations
Years ended March 31, 2018(FY2017) and 2017(FY2016)

Millions of yen
Overseas
operations

1,384,749

FY2017
Thousands of
US dollars*
13,034,159

FY2016
Share (%)

Growth (%)

Millions of yen

63.2

17.0

1,183,424(Note)
*U.S. dollar amounts are translated from yen, for convenience only, at the rate of㻌¥106.24= $1 prevailing on March 31, 2018.

(Cautionary statement)This release of financial results is exempt from audit procedures.
Statements made in this release with respect to the Company’s current plans, estimates, strategies and beliefs that are not historical facts are forwardlooking statements about the future performance of Sumitomo Chemical. These statements are based on management’s assumptions and beliefs inlight of the information currently available to it, and involve risks and uncertainties.
The important factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, but are notlimited to, general economic conditions in Sumitomo Chemical’s markets; demand for, and competitive pricing pressure on, Sumitomo Chemical’s
products in the marketplace; Sumitomo Chemical’s ability to continue to win acceptance for its products in these highly competitive markets; andmovements of currency exchange rates.