Creative Hybrid Chemistry
For a Better Tomorrow

Masakazu Tokura
President
December 2012

Contents
Ⅰ Outlook of Performance
1. Outlook for FY2012

4

Ⅱ Current Management Priority Issues
1. Current Situation
2. Enhance Financial Strength
3. Develop New Businesses
4. Promote Globally Integrated Management

Ⅲ

Business Strategy
1. Bulk Chemicals Business2. Information and Communication Technology Related Business
3. Life Sciences Business

Ⅳ

26
33
38

Outline of the Next Corporate Business Plan
1. Management Priority Issues of the Next Corporate Business Plan

Ⅴ

7
11
17
21

47

Shareholder Return
1. Dividend Policy49
2

Ⅰ Outlook of Performance
1. Outlook for FY2012

4

Ⅱ Current Management Priority Issues
1. Current Situation
2. Enhance Financial Strength
3. Develop New Businesses
4. Promote Globally Integrated Management

Ⅲ

7
11
17
21

Business Strategy
1. Bulk Chemicals Business2. Information and Communication Technology Related Business
3. Life Sciences Business

26
33
35

Ⅳ Outline of the Next Corporate Business Plan
1. Management Priority Issues of the Next Corporate Business Plan

Ⅴ

47

Shareholder Return
1. Dividend Policy

49
3Outlook for FY2012(Billions of yen)

FY2012(Forecast)

FY2011

Change1,947.9

2,020.0+72.1

Operating Income

60.7

65.0

+4.3

Equity in Earnings ofAffiliates

2.0

12.0

+10.0

Ordinary Income

50.7

62.0

+11.3

Net Income

5.6

10.0

+4.4

Naphtha Price¥54,900/kl¥55,000/kl

Exchange Rate

¥79.08/US$¥80.00/US$

Sales

4

Ⅰ Outlook of Performance
1. Outlook for FY2012

4

Ⅱ Current Management Priority Issues
1. Current Situation
2. Enhance Financial Strength
3. Develop New Businesses
4. Promote Globally Integrated Management

Ⅲ

Business Strategy
1. Bulk Chemicals Business2. Information and Communication Technology Related Business
3. Life Sciences Business

Ⅳ

26
33
38

Outline of the Next Corporate Business Plan
1. Management Priority Issues of the Next Corporate Business Plan

Ⅴ

7
11
17
21

47

Shareholder Return
1. Dividend Policy

49
5Current Management Priority Issues
2 to 3 Years

Last 10 Years
Pave the way for future growth

Enhance financial
strength(Tackle Three Management Priority Issues)

RabighProject

EstablishedLaunched DSP, and expanded
IT-related
AcquiredChemicals
Sepracor
SectorNext 10 to 20 Years

Improve profitability
Rigorously selectinvestments
Improve asset
efficiency

Develop New Businesses

Environment
andEnergyGlobalization

2001

Life
Sciences

ICT

Promote globally integrated management

2011

2020~30
6

Current Situation
2 to 3 Years

Last 10 Years
Pave the way for future growth

Enhance financial
strength(Tackle Three Management Priority Issues)

RabighProject

EstablishedLaunched DSP, and expanded
IT-related
AcquiredChemicals
Sepracor
SectorNext 10 to 20 Years

Improve profitability
Rigorously selectinvestments
Improve asset
efficiency

Develop New Businesses

Environment
andEnergyGlobalization

2001

Life
Sciences

ICT

Promote globally integrated management

2011

2020~30
7

Current Situation (Results of Major Projects)

Priority Issues

Major Projects

Investment

Results:
Sales increase
FY2000 vs FY2010

Strengthen
fundamentals of
petrochemicals
business

Gain critical mass inpharma business toachieve strong growth

Developnew core business

Implementation of
Rabigh Project

Launch of Dainippon
Sumitomo Pharma
Acquisition of
Sepracor (Sunovion) inUSEstablishment andexpansion of
IT-related Chemicals
SectorApprox. ¥166.0 bn

Approx. ¥219.0 bn

Approx. ¥355.0 bn(equity investment andlending)
Total project cost $10.1 bn(increased shareholding
and acquisition)(cumulative capital
expendituresin 10 years since inception)

Petrochemicals &Plastics Sector

Pharmaceuticals
SectorIT-related Chemicals
Sector(¥375.5 bn → ¥649.9 bn)
Approx. 1.7 times(¥156.7 bn → ¥365.9 bn)
Approx. 2.3 times(¥60.2 bn → ¥322.3 bn)
Approx. 5.4 times
8Current Situation (Trends in Performance)
Sales, Ordinary Income, Net Income
Sales （left axis）

Net Income/Loss （right axis）

Ordinary Income/Loss (right axis）(Billions of yen)(Billions of yen)

2,500

250

1,982

1,897

2,000

1,790
1,296
1,018

1,111

1,158

141

158

91

94

124

1,000
67
500

30

68
31

66

200

1,621
150

93

100

84
61

65

2,020

1,788

1,557
1,500

1,948

63

62

35

34

50
15

0

24

6

10

-33

-500

0

-50

-59

-1,000

-100
2001

2002

2003

2004

2005

2006

2007

2008

2009

US financial crisis

2010

2011 FY2012(Forecast)

European debt crisis
9Current Situation (Trends in Financial Ratios)(Times)(Billions of yen)

1,200

1.8
Equity investment and lending for Rabigh ProjectInterest-bearing liabilities (right axis)
Shareholders' equity ratio
Debt equity ratio (left-axis)

1.5

1,040

1,053

1,070

998

1,000
1.46
1.37

795

1.2

800

1.21
0.92

0.9
487

674

641
0.90
485

1.03

579

600

0.80
0.70
0.61

485

0.62

0.67

471

0.6
32%

30%

33%

35%

400
33%

34%

33%

27%

0.3

24%

22%

21%

2009

2010

2011 FY 2012

200

0

0
2001

2002

2003

2004

2005

2006

2007

2008

(Forecast)US financial crisis

European debt crisis
10Enhance Financial Strength
2 to 3 Years

Last 10 Years
Pave the way for future growth

Enhance financial
strength(Tackle Three Management Priority Issues)

RabighProject

EstablishedLaunched DSP, and expanded
IT-related
AcquiredChemicals
Sepracor
SectorNext 10 to 20 Years

Improve profitability
Rigorously selectinvestments
Improve asset
efficiency

Develop New Businesses

Environment
andEnergyGlobalization

2001

Life
Sciences

ICT

Promote globally integrated management

2011

2020~30
11Enhance Financial Strength

Quickly maximize returns on major
projects
 Restructure/exit unprofitable businesses Drastically reduce overhead costs
 Minimize sensitivity of earnings tocurrency fluctuations

Improve asset
efficiency

Rigorously selectinvestments

Improve profitability

Keep investment cash flows
within the range of operating
cash flows

Reduce cash conversion
cycle

Enhance Financial Strength
Target: Reduce interest-bearing debt balance to below ¥900.0 billion
by the end of FY2015

Secure greater strategic freedom toaggressively pursue growth opportunities
12Enhance Financial Strength(Improve Profitability: Drastically Reduce Overhead Cost)

Target for Corporate
Overhead Cost Reduction

Corporate overhead cost (incl. researchcost) has increased to support the
globalization of our operations(Billions of yen)

20

15
14

15

Streamline research activities(Increase per-person productivity)

Improve the efficiency ofservice functions

13(Promote the use of shared services andthe outsourcing of administrative
functions)10

Improve overall operational efficiency
50FY2013

FY2014FY2015

Cut overhead cost by
15 billion yen by FY2015
13

Enhance Financial Strength(Improve Profitability: Minimize Sensitivity to Currency Fluctuations)

Foreign Exchange Sensitivity(Change in operating income per one
yen change in the exchange rate of
the yen against $US)

High volatility in financial performancedue to sharp currency fluctuations(Appreciation of the yen)(Billions of yen)
4

Expand overseas production
Better balance foreign currencydenominated payables and receivables

3(e.g., by increasing US$-denominatedpurchase of raw materials for products sold in
US$, such as polarizer film)

2

1

0
End of
FY2010End of
FY2011

End of
FY2012(Forecast)

Halve sensitivity of operating income
to currency fluctuations
from over 4 billion yen to over 2 billion yen
per year for each one-yen change inthe exchange rate of the yen against US$
14

Enhance Financial Strength(Rigorously Select Investments)

Investment Cash Flow

Rigorously SelectInvestments(billons of yen)

700
600

Restrict the amount of investments
decided FY2012 to FY2014
to 400 billion yen(incl. the investment of 130 billion yen
in major projects already decided)

500
400
300
200
100
0
FY2003 FY2005

FY2004 FY2006

FY2007 FY2009

FY2010 FY2012

FY2013 FY2015（Forecast)(Target)

Limit investment cash flow
for FY2013 to FY2015
to below 400 billion yen
15Enhance Financial Strength(Improve Asset Efficiency: Reduce Cash Conversion Cycle)

Cash Conversion Cycle (CCC) = accounts receivable turnover +inventory turnover - accounts payable turnover
Our initiatives

Sumitomo Chemical’s CCC
Accounts payable

Accounts receivable
Inventory(Days)

CCC

200

Shorten accounts receivable terms
 Reduce and optimize inventory levels
 Extend accounts payable terms


180
160

56
76

140
120

57

56

73

73

58
77

61
80

Target

100

55

40

80
126

60
40

104
87

108

106
92

114
95

Reduce CCC by 25% from
FY2010 level by FY2015

102
84

84
69

20
0
FY2008 FY2009 FY2010 FY2011 FY2012(Forecast)

FY2015(Target)Estimated total cash flow improvement
between FY2011 and FY2015 throughthese CCC reduction initiatives

130 billion yen
16Develop New Businesses
2 to 3 Years

Last 10 Years
Pave the way for future growth

Enhance financial
strength(Tackle Three Management Priority Issues)

RabighProject

EstablishedLaunched DSP, and expanded
IT-related
AcquiredChemicals
Sepracor
SectorNext 10 to 20 Years

Improve profitability
Rigorously selectinvestments
Improve asset
efficiency

Develop New Businesses

Environment
andEnergyICT

Promote globally integrated management

Globalization

2001

Life
Sciences

2011

2020~30
17

Develop New Businesses (Creative Hybrid Chemistry)

Contribute to the sustainable development of society

Environment
andEnergyLife
Sciences

Information
andCommunication
Technology

Develop new businesses by providing products that help solve global
challenges
Combine and leverage six core technologies

Catalyst
designHighprecision
processing

Design offunctionalorganic
chemicals andpolymers

Design offunctional
inorganic
materials

DevicedesignAnalysis ofbiomechanisms

18Commercialization Timeline (Environment & Energy and ICT)
Commercialization Timeline
2011

EnergyGeneration

2015

Silicon solar cells(HEVA, electrode paste, etc.)

EnergyStorage

Lithium-ion secondary
batteries (separators)

EnergySaving

LED lighting applications(sapphire substrates andalumina, etc.)

EnergyManagement
Environment
ICT

Ultra-high-efficiency
photovoltaic(epitaxial wafer)

2020Organic thin-film photovoltaics

Lithium-ion secondary
batteries (cathode materials)

PLED lighting

Power semiconductors (epitaxial wafers)
High thermal conductive resin

Diesel particulate filters

CO2 separation

PLED (displays)
Next generation polarizing films

Organic semiconductors

19

Develop New Core Business (CO2 Separation Business)
Target market(Million tonsof CO2 )3,000

Market forecast by application

2,500
2,000
1,500
1,000
500
0
2011
2016
2021
2031
CTL
CCS for blast furnance gas, others
CCS for power plants
Natural gas
Hydrogen production

The carbon capture and storage (CCS) market is
expected to grow from 2020 onward, due toregulation for reducing CO2 emission sources.
The new company will initially work to foster businessin the existing market segments of hydrogenproduction and natural gas refining, with the aim ofbuilding a foundation for future business expansion in
the CCS market.

Overview of New Company
・Business: CO2 separation using
CO2 selective membrane
・Capital: 800 million yen
・Shareholders:
Sumitomo Chemical
47.5%
Sumitomo Corp.
47.5%
Renaissance Energy Research
５.0％

Features of CO2 separation
technology using CO2 selective
membrane①Low energy consumption②Simple separation process③Small-scale equipment④Flexibility of equipment capacity⑤Smaller investment than chemical
absorption method20Promote Globally Integrated Management
2 to 3 Years

Last 10 Years
Pave the way for future growth

Enhance financial
strength(Tackle Three Management Priority Issues)

RabighProject

EstablishedLaunched DSP, and expanded
IT-related
AcquiredChemicals
Sepracor
SectorNext 10 to 20 Years

Improve profitability
Rigorously selectinvestments
Improve asset
efficiency

Develop New Businesses

Environment
andEnergyICT

Promote globally integrated management

Globalization

2001

Life
Sciences

2011

2020~30
21

Promote Globally Integrated Management

What is globalization in the true sense?
Optimize across national borders the functions in each business—from R&D to manufacturing to marketing, sales and logistics—
in terms of cost, technology and business environment

Globally Integrated Management

22Promote Globally Integrated Management(Trends in Sales Outside of Japan)
Percentage of overseas production in FY2011: 40%(Billions of yen)

(%)

1,400

70.0

1,200

Asia

North America

EuropeMiddle East and Africa

Central and South America

Oceania and Others

60.0

Percentage of Sales Outside of Japan
1,000

50.0

800

40.0

600

30.0

Decided to implement Rabigh Project;
Completed the 2nd phase expansionof MMA in Singapore

400

Started production ofpolarizing film in Taiwan

200

Started production ofpolarizing film in South Korea

20.0

Started production of Rabighcomplex; Acquired Sepracor

Completed the 3rd phase
expansion of MMA in Singapore

Formed comprehensive
business tie-up with Nufarm
and made strategic investmentin the company

10.0

Acquired CDT00.0
FY2001

FY2002

FY2003

FY2004

FY2005

FY2006

FY2007

FY2008FY2009FY2010FY2011FY2012(Forecast)23

Promote Globally Integrated Management(Sales outside of Japan)

FY2001FY2012

Change(Billons of yen)(Billions of yen)

2012/2001

Sales in Japan

731.2

938.9

128%

Sales outside of Japan

287.2

1,009.0351%

1,018.4

1,947.9

191%¥124.98/US$¥79.08/US$

28%

52%*

Global Sales

Exchange Rate
Percentage of Sales
Outside of Japan* Percentage of overseas production: 40%
Percentage of employees oversees: 39%
24

Promote Globally Integrated Management
Basic Chemicals

IT-related Chemicals

Singapore
Increased methyl methacrylate
production capacity
PolandBuilding DPF production
facilities

Korea
Built a touch sensor panel
production facility
Built a sapphire substrate
production facility
China
Establishing supply chains

FY2011as ne
rs tioe
Ov ducoPr

40%
Pharmaceuticals
US
Launched LATUDA
Acquired BBI and Elevation
EuropeLicense agreement with Takeda
Pharmaceuticals for the joint development andexclusive commercialization of lurasidone

Petrochemicals and Plastics

Health & Crop Science

Singapore
Building a S-SBR production plant
Saudi Arabia
Rabigh Phase II project

Australia
Comprehensive business alliance with Nufarm
US
Collaboration with Monsanto25

Ⅰ Outlook of Performance
1. Outlook for FY2012

4

Ⅱ Current Management Priority Issues
1. Current Situation
2. Enhance Financial Strength
3. Develop New Businesses
4. Promote Globally Integrated Management

Ⅲ

Business Strategy
1. Bulk Chemicals Business2. Information and Communication Technology Related Business
3. Life Sciences Business

Ⅳ

26
33
38

Outline of the Next Corporate Business Plan
1. Management Priority Issues of the Next Corporate Business Plan

Ⅴ

7
11
17
21

47

Shareholder Return
1. Dividend Policy

49
26

Bulk Chemicals BusinessCurrent state of petrochemical business in Japan

Customers shifting operations to the outside of Japan

Appreciation of the yenHigh-cost feedstock (naphtha) and utility (electricity)

Increase in import of low-priced products

New plans for shale gas-based petrochemicals projects in North America

Enhancing overseas operations isessential for the survival andgrowth of our petrochemical business
Sumitomo Chemical has been actively expanding business outside ofJapan since 1980s
27

Bulk Chemicals Business
Globalized operations capitalizing on distinctive
competitive advantage of each operation baseJapan
Develop new technologies, products
and know-how and roll them out
globally, playing the role as “motherplant,” “mother laboratory”
Singapore
Deliver high value added products,
meeting the needs of key customers in
Asian markets
Saudi Arabia
Produce cost competitive products,
taking advantage of low-costfeedstocks and fuels28

Bulk Chemicals Business (Rabigh Phase I Project)
Performance of Rabigh Phase I(US$ millions)

2010

2011

2012
1Q

2012
2Q

2012
3Q

Refinedproducts

10,416

12,071

3,663

3,290

3,606

Petrochemicals

2,074

2,163

604

669

528

Operating Income

-30

27

40

-17

123

Net Income

56

18

31

-28

109

Sales

29

Bulk Chemicals Business (Rabigh Phase II Project)
1. Investment

Approx. US$ 7 billion

2. Feedstock

Ethane (approx. 400,000 tons/year)
Naphtha (approx. 3 million tons/year)

3. Products

Ethylene propylene rubber (EPDM);
thermoplastic polyolefin (TPO); methyl methacrylate(MMA) monomer; methyl methacrylate (MMA)
polymer; low-density polyethylene/ ethylene vinyl
acetate (LDPE/ EVA); para-xylene/benzene; cumene;
phenol/ acetone

4. Start ofoperationsFirst half of 2016

5. Products
Acrylic acid; superabsorbent polymer (SAP);
under
caprolactam; nylon-6; polyols
consideration
30

Bulk Chemicals Business (Rabigh Phase II Project)
Purposes of the Project1

Expand product line

2

Enhance the value added

3

Take full advantage of the proximity to growing
Middle East and North African markets
Advantages of the Project1

Low‐cost ethane as feedstock2

Use of existing infrastructure of Rabigh I Project3

State-of-the-art facilities

4

Strong partnership with Saudi Aramco31Bulk Chemicals BusinessPetrochemicals production capacity by area
Saudi Arabia

Singapore

Japan

100%

80%
60%

40%
20%

0%
Present

After Rabigh II Project startup

32

Ⅰ Outlook of Performance
1. Outlook for FY2012

4

Ⅱ Current Management Priority Issues
1. Current Situation
2. Enhance Financial Strength
3. Develop New Businesses
4. Promote Globally Integrated Management

Ⅲ

Business Strategy
1. Bulk Chemicals Business2. Information and Communication Technology Related Business
3. Life Sciences Business

Ⅳ

26
33
38

Outline of the Next Corporate Business Plan
1. Management Priority Issues of the Next Corporate Business Plan

Ⅴ

7
11
17
21

47

Shareholder Return
1. Dividend Policy

49
33

ICT Related Business
Components
Base materials

Polarizing film
Retardation film

Color filters

Anti-glare & anti-reflection film

Raw materials

LCD materials

Light control film

Process chemicals

Photoresists

Etchants

Transparent resist

Aluminum/copper
targets

Color resists forcolor filters

Light-guiding panels

Touchscreen
panelsLight-diffusion panels

Sapphire substrates
Liquid crystal polymer (LCP)

Electronic materials

Polyethersulfone

Semiconductormaterials

Cleansers

LCP cast film

High-purity gallium

Photoresists for
Metal organics
micromachining Aluminum targets

Gallium arsenide
epitaxial wafers

Compoundsemiconductor materials

Heat-resistant separators

Battery materials

Cathode materials

34

ICT Related Business
Tablet PC and Smartphone
MarketLiquid Crystal Display
TV Market
Average annual growth rate :7%(million units)

Tablet PCs(million units)

300
263

275

246

250

Average annual growth rate :Tablet PCs
41%
Smartphones 19%
1,400

1,260

1,200

1,113

227
210

200

Smartphones

1,000

907

800

634

150

673

600

100

400

50

200

0

0

CY2011 CY2012 CY2013 CY2014 CY2015

80

132

181

247

308

CY2011 CY2012 CY2013 CY2014 CY2015(Source：Display Search 2012.07)
35

ICT Related Business (Polarizing Film)
Large-sizedpolarizing film for LCD TVs

Small- and medium-sizedpolarizing film for
smartphones and tablet PCs

Demand trends

Stable growth

Rapid growth

Customer needs

Large film size and low priceHigh performance (light; thin;sturdy; wide viewing angle)

Requirements forpolarizing filmmakersCapability to reduce cost(economies of scale andtechnology development)

Capability to develop highperformance products

Enhance production speed
Strategy

Develop cost competitive newmaterials

Accelerate technology development

Only
3 or 4 polarizing film makers can survive
偏光板メーカーで生き残れるのは２～３社
36

ICT Related Business (PLEDs)

Applications in Printed Electronics
Organic
semiconductors

PLED
lighting

Organic
photovoltaics

PLED
materials
for displays37

Ⅰ Outlook of Performance
1. Outlook for FY2012

4

Ⅱ Current Management Priority Issues
1. Current Situation
2. Enhance Financial Strength
3. Develop New Businesses
4. Promote Globally Integrated Management

Ⅲ

Business Strategy
1. Bulk Chemicals Business2. Information and Communication Technology Related Business
3. Life Sciences Business

Ⅳ

26
33
38

Outline of the Next Corporate Business Plan
1. Management Priority Issues of the Next Corporate Business Plan

Ⅴ

7
11
17
21

47

Shareholder Return
1. Dividend Policy

49
38

Life Sciences (Health & Crop Sciences)

HealthFood

Environment

 Ensuring Public Healthand Hygiene Increase Food Production

 Improvement of Qualityof Life and theEnvironment

 Sustainable Agriculture Safer Produce

Sumitomo Chemical
R&D
Expand businessglobally

Establish highly
profitable corebusiness

Ensure complianceand maintain safe
operations
39

Life Sciences (Health & Crop Sciences)
Sumitomo Chemical’s globalized operations in
Health & Crop Sciences Business
Sales bases:

33

Plants:5

Research laboratories: 8

Countries in which Sumitomo Chemicalhas formed sales alliance with Nufarm
19 countries (as of July 2012)40

Life Sciences (Health & Crop Sciences)

Seeds
Seeds
• Sunflower• Rapeseed• Sorghum

Seedtreatment

In-season
Pest control
Fertilization

Agricultural chemicals• Insecticide, fungicide

Agricultural chemicals• Insecticide, fungicide, herbicide

Formulation and application
technology• Insecticide and plant growth
regulator for seed treatment• Seed treatment technology

Bio-rational• Microbial pesticide• Plant growth regulator
Fertilizer• Coating fertilizer
Formulation technology• Microcapsule

Postharvest
Products• Fungicide• Preservative• Coating agent• Plant growth regulator
Services• Postharvest treatment• Pre-shipment treatment• Residue analysis

Strategic entry into postharvest business① Expand business domain② Increase presence in market by differentiation from multinational competitors③ Strengthen downstream businesses④ Seek synergies among seeds, seed treatment, in-season, pest control andfertilization businesses
41Life Sciences (Health & Crop Sciences)

Product pipeline of new crop protection chemicals

Year oflaunchSumitomo
Chemical

CY2010 –CY2012Agricultural Insecticide
1 AI (spinetoram)
Agricultural Fungicide
2 AIs (isotianil,
fenpyrazamine)
Agricultural Herbicide
1 AI (propyrisulfuron)

CY2016 -CY2013 –CY2015Agricultural Fungicide
1 AI
Plant Growth Regulator
1 AI
Household Insecticide
1 AI
Animal Health Product
1 AI

Agricultural Insecticide
2 AIs
Agricultural Fungicide
2 AIs
Agricultural Herbicide
4 AIs
Household Insecticide
1 AI

Product launch by multinational crop protection chemical companies

Sumitomo
ChemicalCompanyA

Company
B

CompanyC

CompanyD

Company
E

４ AIs

２ AIs

５ AIs

１ AI

None

１ AIs

(Source) Estimated by Sumitomo Chemical based on public source(Note) AI: Active Ingredient42

Life Sciences (Pharmaceuticals)
Expansion of Overseas Operations (Focusing on North America)
2009
2011

DSP Acquired Sepracor (now Sunovion Pharmaceuticals)
Launched atypical antipsychotic LATUDA®

2012

DSP Acquired BBI
Sunovion Acquired Elevation Pharmaceuticals
Approval of LATUDA®’s new indication as treatment for
bipolar disorder expected2013

Established
its own sales
network in US

Expands sales in
the CNS area in North
America
Launched LATUDA®

Enriched product pipelinein the oncology area byacquiring BBI
and in the respiratory areaby acquiring Elevation

43

Life Sciences (Pharmaceuticals)
Globalizing R&D activities in the oncology area
- U.S. subsidiary BOSTON BIOMEDICAL as global oncology R&D center Global
GlobalOncology
OncologyOffice
Office(Tokyo)(Tokyo)DSPDSPCancer
CancerInstitute
Institute
GlobalOncology
Global OncologyOffice
Office(Osaka)(Osaka)Japan

North America

Location of
R&D bases

Research：Osaka
Development：Osaka, Tokyo

Cambridge

R&D
organization

Global Oncology Business Development
Office, DSP Cancer Institute(under direct control of president)

Global Oncology R&D Center** To be established in FY2012 and employ 100 staff by the end of 2013.

44

Life Sciences (R&D)
Self-organized retinal tissue from human embryonic cells
Enabling more accurate prediction of the effects of chemical
substances on humans
 Opening the way to regenerative treatment for retinitis pigmentosa
and other diseases


Joint research with Dr. Sasai at the Riken
Center for Developmental Biology• Succeeded in forming embryonic-type optic
cups by self-organization in human ES cell
culture• Succeeded in forming multilayered retinal
tissues containing visual cells and ganglion cells• Developed a method for cryopreservation ofretinal tissues developed from human ES cells, Retinal tissue of human ES cell origin
an important step toward clinical application
45

Ⅰ Outlook of Performance
1. Outlook for FY2012

4

Ⅱ Current Management Priority Issues
1. Current Situation
2. Enhance Financial Strength
3. Develop New Businesses
4. Promote Globally Integrated Management

Ⅲ

Business Strategy
1. Bulk Chemicals Business2. Information and Communication Technology Related Business
3. Life Sciences Business

Ⅳ

26
33
38

Outline of the Next Corporate Business Plan
1. Management Priority Issues of the Next Corporate Business Plan

Ⅴ

7
11
17
21

47

Shareholder Return
1. Dividend Policy

49
46

Management Priority Issues of the Next Corporate Business Plan
１

５

EnhanceFinancial Strength

EnhanceCompliance２

Restructure
Businesses

Five
Management
Priority Issues

４

PromoteGlobally
Integrated
Management

３

Develop
New Businesses47

Ⅰ Outlook of Performance
1. Outlook for FY2012

4

Ⅱ Current Management Priority Issues
1. Current Situation
2. Enhance Financial Strength
3. Develop New Businesses
4. Promote Globally Integrated Management

Ⅲ

7
11
17
21

Business Strategy
1. Bulk Chemicals Business2. Information and Communication Technology Related Business
3. Life Sciences Business

26
33
38

Ⅳ Outline of the Next Corporate Business Plan
1. Management Priority Issues of the Next Corporate Business Plan

Ⅴ

47

Shareholder Return
1. Dividend Policy

49
48

Dividend Policy
We consider shareholder return as one of our priority management issues and have madeit a policy to maintain stable dividend payment, giving due consideration to our businessperformance and a dividend payout ratio for each fiscal period, the level of retained
earnings necessary for future growth, and other relevant factors.
(Yen)(Billions of yen)210

16Interim Dividend (left axis)

14Year-end Dividend (left axis)

12

10

10

6

6

6

6

3

3

3

4

12

7

6

6

8

8

12

5

31
3

24
3

9

9 Undecided 120

3

6

3

3

3

4

5

90

6
6

6

30

2

9
63

65

180
150

94

91

Net Income (right axis)

60

15 24

6
0

0

6 6

6

10 30

3

0
-30

-2
-4

-59

-60

FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012(Forecast)49

Creative Hybrid Chemistry50

Cautionary Statement
Statements made in this document with respect to Sumitomo Chemical’s current
plans, estimates, strategies and beliefs that are not historical facts are forwardlooking statements about the future performance of Sumitomo Chemical. Thesestatements are based on management’s assumptions and beliefs in light of theinformation currently available to it, and involve risks and uncertainties.
The important factors that could cause actual results to differ materially fromthose discussed in the forward-looking statements include, but are not limited to,
general economic conditions in Sumitomo Chemical’s markets; demand for, andcompetitive pricing pressure on, Sumitomo Chemical’s products in themarketplace; Sumitomo Chemical’s ability to continue to win acceptance for its
products in these highly competitive markets; and movements of currency
exchange rates.

51