For Immediate Release
May 16, 2017

Sumitomo Chemical Announces
Consolidated Financial Results for FY2016
During the twelve months ended March 31, 2017 (Fiscal 2016), the world economy faced
growing uncertainty due to the British vote to exit from the European Union and theinauguration of the new U.S. administration, but the global economy was robust ingeneral, led by the strengthening U.S. economy due to the good employment situationand on expectations of a fiscal expansion. In Japan, although consumer spending
remained weak, the economy continued to stay on a moderate recovery path due toimprovement in wages and the job market as well as strong corporate earnings.
The business environment surrounding the Sumitomo Chemical Group was initially toughdue to the stronger yen and an economic slowdown in emerging countries in the first halfof fiscal 2016, but there were signs from late in fiscal 2016 that the situation wasimproving due to the weaker yen after the U.S. presidential election and higher market
prices for petrochemical products.
Under these circumstances, the Sumitomo Chemical Group undertook group-wide efforts
to improve business performance. At the same time, the Group worked to furtheraccelerate its transformation into a more resilient Sumitomo Chemical that continues togrow, based on the current three-year Corporate Business Plan for fiscal 2016 to 2018 thathas a basic policy of further improving business portfolio, generating more cash flow, andaccelerating the launch of next-generation businesses.
As a result, the Group’s sales for fiscal 2016 decreased by ¥147.5 billion compared withthe previous fiscal year, to ¥1, 954.3 billion. The Group posted operating income of ¥134.3billion and ordinary income of ¥166.6 billion, both representing decreases from theprevious fiscal year. Net income attributable to owners of the parent was ¥85.5 billion,
showing an increase from the previous fiscal year.
The Sumitomo Chemical Group’s financial results by business segment for fiscal 2016 are
as follows.

Petrochemicals & Plastics
Market prices of petrochemical products and synthetic resins declined because of lower
feedstock prices. Shipments of petrochemical products decreased due to therestructuring of the petrochemical business at the Chiba Works. The stronger yen had anegative effect on sales from overseas subsidiaries in yen terms. As a result, thesegment’s sales decreased by ¥85.1 billion compared with the previous fiscal year, to¥572.0 billion. Operating income declined by ¥2.2 billion, to ¥26.6 billion.
Energy & Functional Materials
Selling prices of aluminum declined due chiefly to the stronger yen. Shipments ofresorcinol, a raw material for adhesives, and engineering plastics increased due to a risein demand. As a result, the segment’s sales decreased by ¥3.1 billion compared with theprevious fiscal year, to ¥205.9 billion. Operating income increased by ¥4.4 billion, to ¥7.2billion.
IT-related Chemicals
Selling prices of polarizing film dropped. Selling prices of touchscreen panels also
declined, but shipments increased due to growth in demand. The stronger yen had anegative effect on sales from overseas subsidiaries in yen terms. As a result, thesegment’s sales decreased by ¥26.1 billion compared with the previous fiscal year, to¥358.4 billion. Operating income declined by ¥9.5 billion, to ¥10.3 billion.
Health & Crop Sciences
Sales of the feed additive methionine dropped due to lower market prices. The stronger
yen had a negative effect on sales. As a result, the segment’s sales decreased by ¥39.7
billion compared with the previous fiscal year, to ¥319.3 billion. Operating income
declined by ¥31.4 billion, to ¥46.2 billion.
Pharmaceuticals
In Japan, although sales of Aimix® (anti-hypertension drug), Trerief® (therapeutic agentfor Parkinson’s disease) and other drugs increased, overall sales declined due largely tothe impacts of Japanese National Health Insurance drug price revisions and a decrease inshipments of patent-expired originator drugs. In North America, sales of Latuda®
(atypical antipsychotic) and other drugs increased steadily. The stronger yen had anegative effect on sales from overseas subsidiaries in yen terms. The segment’s sales
increased by ¥8.7 billion compared with the previous fiscal year, to ¥444.2 billion.
Operating income rose by ¥12.4 billion, to ¥55.1 billion, due to the expansion of sales inNorth America.
OthersIn addition to the above five segments, the Sumitomo Chemical Group engages insupplying electrical power and steam, providing services for the design, engineering, andconstruction management of chemical plants, providing transport and warehousing, andconducting materials and environmental analysis. The segment’s sales decreased by ¥2.2billion compared with the previous fiscal year, to ¥54.4 billion. Operating income declinedby ¥2.1 billion, to ¥5.7 billion.

Equity in earnings of affiliates increased by ¥21.0 billion compared with the previous
fiscal year, to ¥41.2 billion. Earnings of Petrochemical Corporation of Singapore remained
strong. Earnings of Rabigh Refining and Petrochemical Company (Petro Rabigh), which
deteriorated in the previous fiscal year due to periodic plant maintenance, improved infiscal 2016 due chiefly to increased shipments after periodic plant maintenance.
(Note) Change in Business Segment Classification
As of April 1, 2016, battery materials and engineering plastics, which had been included in theIT-related Chemicals Segment, were transferred to the Energy & Functional Materials Segment.

The Company decided to pay a year-end dividend of ¥7 per share. As a result, theCompany’s annual dividend for fiscal 2016 is ¥14 per share, including an interim dividendof ¥7 per share.
Net cash provided by operating activities in fiscal 2016 was ¥187.4 billion, a decrease of¥73.7 billion compared to the previous fiscal year, due chiefly to a decline in operating
income and an increase in income taxes paid. Net cash used in investing activities was¥199.7 billion, an increase in cash outflows of ¥146.1 billion compared to the previousfiscal year, due mainly to the acquisition of Cynapsus Therapeutics Inc. (the presentSunovion CNS Development Canada ULC) and Tolero Pharmaceuticals Inc. by SumitomoDainippon Pharma, a subsidiary of Sumitomo Chemical. This resulted in free cash flow ofnegative ¥12.3 billion for fiscal 2016, compared with positive ¥207.5 billion for theprevious fiscal year. Net cash used in financing activities was ¥8.1 billion. The balance ofcash and cash equivalents at the end of the fiscal year decreased by ¥22.3 billion over theprevious fiscal year, to ¥193.3 billion.
For fiscal 2017, the Company forecasts that sales will increase by 12.1%, to ¥2,190.0
billion, while operating income and ordinary income are projected to be ¥165.0 billion and¥185.0 billion, respectively, and net income attributable to owners of the parent to be¥100.0 billion, assuming an exchange rate of ¥110.0/US$ and a naphtha price of¥37,000/kl.
The Company plans to pay an interim dividend of ¥7 per share and a year-end dividend of¥7 per share, making the Company’s annual dividend for fiscal 2017 ¥14 per share,unchanged from the previous fiscal year.

Consolidated Statements of Income
Years ended March 31, 2017(FY2016) and 2016(FY2015)

FY2016

Net sales
Cost of sales
Selling, general and administrative expenses
Operating income

FY2015*1

Yen (Millions)

1,954,28317,419,405

2,101,764

1,285,764

11,460,594

1,404,801

534,183

4,761,414

532,517

134,336

1,197,397

164,446

Yen (Millions)

USD (Thousands)

Other income (expenses):

8,856

78,9389,321Interest expenses(10,499)(93,582)(11,976)

Equity in earnings of affiliates

41,205367,279

20,240Loss on foreign currency transactions(1,145)(10,206)(8,518)

Cost of inactive facilities(3,385)(30,172)(3,209)Gain on sale of investment securities

27,288243,230

15,831Gain on step acquisitions

3,372

30,056-Gain on sale of property, plant and equipment

1,035

9,225

-Impairment loss

(34,271)(305,473)(24,688)

Restructuring charges(18,865)(168,152)(4,791)Other, net(2,736)(24,387)

913

Income before income taxes andnon-controlling interests

145,191

1,294,153

157,569

Income taxes

28,138250,80745,171

Net income

117,053

1,043,346

112,398

31,571

281,406

30,94785,482

761,940

81,451

Interest and dividend income

Net income attributable tonon-controlling interests
Net income attributable toowners of the parent

FY2016

Yen

52.31

0.47

49.84

7.00

0.06

8.00 *2YenNet income per share

FY2015*1USD

Dividends per share:
Interim dividends
Year-end dividends

7.00

0.06

6.00

For the year

14.00

0.12

14.00

(Note)*1 U.S. dollar amounts are translated from yen, for convenience only, at the rate of¥112.19= $1 prevailing on March 31, 2017.
*2 Interim dividends include an ordinary dividend of ¥6 per share and a commemorative dividend of ¥2 per share.

Consolidated Statements of Comprehensive IncomeYears ended March 31, 2017(FY2016) and 2016(FY2015)

FY2016FY2015

Yen (Millions)

USD (Thousands)*

Yen (Millions)

117,053

1,043,346

112,398

Net income
Other comprehensive income：(13,867)(123,603)(19,852)

Deferred losses on hedges(145)(1,292)(494)

Foreign currency translation adjustment

1,483

13,219(52,613)

Remeasurements of defined benefit plans

2,825

25,180(19,493)(1,912)(17,043)(9,031)(11,616)(103,539)(101,483)

105,437

939,807

10,915

Owners of the parent

75,745675,149(4,667)

Non-controlling interests

29,692

264,658

15,582

Valuation difference on available-for-sale securitiesShare of other comprehensive income of associates
accounted for using the equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to：(Note)*U.S. dollar amounts are translated from yen, for convenience only, at the rate of¥112.19= $1 prevailing on March 31, 2017.

Consolidated Statements of Cash Flows
Years ended March 31, 2017(FY2016) and 2016(FY2015)

FY2016FY2015

Yen (Millions)

USD (Thousands)*

Yen (Millions)

Income before income taxes and non-controlling interests

145,191

1,294,153

157,569

Depreciation and amortization

110,281982,984116,602

Income taxes paid

(65,088)(580,159)(41,227)

Other, net(2,938)(26,187)

28,228Net cash provided by operating activities

187,446

1,670,791

261,172

Acquisition of securities(1,330)(11,855)(1,290)

Proceeds from sale and redemption of securities

35,596317,283

35,251

Acquisition of property, plant and equipment(131,755)(1,174,392)(89,765)

Other, net(102,253)(911,426)

2,126

Net cash used in investing activities(199,742)(1,780,390)(53,678)

Net increase (decrease) in short-term debt

76,096678,278(19,404)

Net decrease in long-term debt

(40,705)(362,822)(122,421)

Cash dividends paid

(21,258)(189,482)(17,988)

Other, net(22,255)(198,369)(18,143)

Net cash used in financing activities(8,122)(72,395)(177,956)

Effect of exchange rate changes on cash and cash equivalents(1,885)(16,803)(14,252)

Net change in cash and cash equivalents(22,303)(198,797)

15,286--(1,691)

Cash and cash equivalents at beginning of year

215,592

1,921,669

201,997

Cash and cash equivalents at end of year

193,289

1,722,872

215,592

Cash flows from operating activities:

Cash flows from investing activities:

Cash flows from financing activities:

Net decrease in cash and cash equivalents resulting
from change in fiscal period of consolidated subsidiaries(Note)*U.S. dollar amounts are translated from yen, for convenience only, at the rate of¥112.19= $1 prevailing on March 31, 2017.

Segment Information
Years ended March 31, 2017(FY2016) and 2016(FY2015)
Yen (Millions)
Petrochemicals&Plastics

Energy &Functional
Materials

IT-related
Chemicals

Health &CropSciences

572,017205,934

358,426(Share)(29.3%)(10.5%)(Growth)(-12.9%)(-1.5%)

26,604

7,199

Pharmaceuticals

SubtotalOthers

Adjustments

Consolidated

FY2016Net Sales

Operating income

[a]

[b]

319,271444,189

1,899,837

54,446-

1,954,283(18.3%)(16.3%)(22.7%)(-6.8%)(-11.1%)(2.0%)(97.2%)(2.8%)-(100.0%)(-7.1%)(-3.9%)-(-7.0%)

10,325

46,15455,099145,381

5,705(16,750)

134,336[b] / [a](4.7%)(3.5%)(2.9%)(14.5%)(12.4%)(7.7%)(10.5%)

Total assets

696,991

231,967

337,273483,722856,450

2,606,403

268,088(12,439)2,862,052

19,721

10,991

31,72015,44615,15893,036

5,192

3,909

102,137

402

281

74

1,826

5,560

8,143

1

-

8,144

142,01727

5,250

25,675

821

173,790

98,441-

272,231

27,72019,06333,65423,936

14,927

119,300

4,735

6,080

130,115

657,093

209,007384,532

359,013435,4782,045,123

56,641-

2,101,764(31.3%)(9.9%)(18.3%)(17.1%)(20.7%)(97.3%)(2.7%)-(100.0%)28,7672,809

19,87477,51842,686171,654

7,830(15,038)

164,446[b] / [a](4.4%)(1.3%)(5.2%)(21.6%)(9.8%)(8.4%)(13.8%)-(7.8%)

Total assets

688,186

221,447

337,069

447,357

766,357

2,460,416

254,275(52,541)

2,662,150

21,776

11,76534,915

14,217

16,25898,931

5,280

3,883

108,094

402

1573

2,037

5,980

8,507

1

-

8,508

145,01022

458

24,216772

170,478

91,780-262,258

20,702

20,552

26,737

15,546

13,873

97,410

3,667

2,676

103,753

Depreciation andamortization
Amortization of
goodwillInvestment on
affiliates applied toequity methods
Capitalexpenditures(6.9%)FY2015*Net Sales[a](Share)
Operating income

Depreciation andamortization
Amortization ofgoodwill
Investment on
affiliates applied toequity methods
Capitalexpenditures[b](Note)*Segment information of the previous fiscal year is reclassified in accordance with the change in reported segments.

Overseas Operations
Years ended March 31, 2017(FY2016) and 2016(FY2015)
FY2016

Overseas
operations

FY2015

Yen (Millions)

USD(Thousands)*

Share (%)

Growth (%)

Yen (Millions)

1,186,712

10,577,699

60.7-8.01,289,232(Note)*U.S. dollar amounts are translated from yen, for convenience only, at the rate of¥112.19= $1 prevailing on March 31, 2017.
(Cautionary Statement)
Statements made in this release with respect to the Company’s current plans, estimates, strategies and beliefs that are not historical facts
are forward-looking statements about the future performance of Sumitomo Chemical. These statements are based on management’s
assumptions and beliefs in light 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 not limited 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 thesehighly competitive markets; and movements of currency exchange rates.