For Immediate Release                         May 15, 2020

Sumitomo Chemical Announces
Consolidated Financial Results for FY2019
The economic condition outside Japan during the fiscal 2019 has shown clear signs ofoverall slowdown as evidenced by bleak outlook on the US economy, which has been
driving the global economy for some time, and by the changes in Chinese economy
impacted by the US-China trade war.
Around the time when the Japanese economy was beginning to be in a lull, theconsumption tax hike and damages from frequent heavy rainfall caused sharp decline in
consumer spending, resulting in adverse business environment.
Amid these circumstances, the new coronavirus began to spread, having a severe negative
impact on economic activity in China, and then in all over the world.
Against this backdrop, the Sumitomo Chemical Group has formulated its Corporate
Business Plan (for fiscal 2019 - fiscal 2021), centering on the basic policies of accelerating
the development of next-generation businesses, improving productivity through digital
innovation, sophisticating the company’s business portfolio, and building a more robust
financial structure. The Group has come together, working to create a sustainable society
and to deliver its sustainable growth through exponential growth in productivity andacceleration of innovation.
The Group’s sales revenue on the consolidated basis for the fiscal 2019 ended March 31,
2020 declined by ¥92.8 billion from the previous year to ¥2,225.8 billion. The core operating
income* was ¥132.7 billion, operating income was ¥137.5 billion, and net income
attributable to owners of the parent was ¥30.9 billion, all of which were lower than theprevious year.
*: Core operating income is a gain and loss concept, reflecting recurring earning capacity,and deducts gains and losses incurred by non-recurring factors from operating income. It
includes the share of profit of investments accounted for using the equity method.
The financial results by business segment for the fiscal 2019 are as follows:Petrochemicals & Plastics
Market conditions for petrochemical products and synthetic resins declined because
feedstock prices fell year on year. Market prices for raw materials for synthetic fibers andmethyl methacrylate (MMA) also hovered around at a low level. As a result, the sales revenue
declined by ¥100.6 billion from the previous year to ¥656.9 billion. Core operating income
declined by ¥47.1 billion to ¥14.5 billion, amid the deteriorated margins of petrochemical
products and MMA.
Energy & Functional Materials
Shipments of resorcinol (a raw material for adhesives) stayed firm. Meanwhile, market prices
for aluminum and for the metal raw materials for cathode materials remained low, resulting
in lower selling prices. The sales revenue declined by ¥27.8 billion from the previous year to¥255.0 billion, and core operating income declined by ¥2.6 billion year on year to ¥20.3 billion.
IT-related Chemicals
Despite the drop in selling prices of polarizing film, shipments of polarizing film for both TV
and mobile applications, as well as touchscreen panels increased, due to growth in demand.
As a result, the sales revenue increased by ¥8.0 billion from the previous year to ¥404.9 billion.
Core operating income fell by ¥1.1 billion year on year to ¥25.1 billion as it is largely impacted
by lower selling prices.
Health & Crop Sciences
While market prices for methionine (feed additive) declined, shipments increased because of
the increased production capacity in the previous fiscal year. On the other hand, shipmentsof crop protection products decreased due to the extreme weather in North America. As aresult, the sales revenue increased by ¥5.6 billion from the previous year to ¥343.7 billion.
Core operating income declined by ¥17.6 billion year on year to ¥2.1 billion, due to thedeteriorated margins of methionine and lower shipments of crop protection products.
Pharmaceuticals
In Japan, sales increased, driven by Equa® and EquMet® (for type II diabetes mellitus). InNorth America, sales of Latuda® (atypical antipsychotic agent) increased. As a result, thesales revenue increased by ¥23.7 billion from the previous fiscal year to ¥515.8 billion. While
sales revenue increased, sales expenses, general and administrative expenses (SG&A), andresearch and development expenses also increased. This was because the expenses at
Sumitovant Biopharma and its subsidiaries (which were acquired as part of the strategic
alliance with Roivant Sciences Ltd.) were recognized. Core operating income thus fell by ¥5.5
billion to ¥75.3 billion.
OthersIn addition to the above five segments, the Sumitomo Chemical Group supplies electric
power and steam, designs chemical plants/supervises the construction of those facilities,
provides transportation and warehousing, and conducts physical property
analysis/environmental analysis. The sales revenue of these businesses declined by ¥1.7
billion from the previous year to ¥49.5 billion, and core operating income decreased by ¥0.7
billion to ¥8.8 billion.

Given the severe financial results as noted above, coupled with uncertainty over the futurebusiness climate, the Sumitomo Chemical Group has decided ¥6 per share for the year-end
dividend for fiscal 2019. The annual dividend will be ¥17 per share, which includes the interim
dividend (¥11 per share).
Net cash from operating activities in fiscal 2019 was ¥106.0 billion, a decrease of ¥102.1 billion
from the previous year, due to a decrease in pretax income. Net cash used in investing
activities was ¥499.7 billion, an increase in cash outflows of ¥318.8 billion from the previousyear, due to an increase in outflows for acquiring investment securities and subsidiaries asa result of stock purchases of Roivant Sciences by Sumitomo Dainippon Pharma Co., Ltd. (aconsolidated subsidiary of the Sumitomo Chemical Group) after the completion of theprocedures for their strategic alliances. This resulted in negative free cash flow of ¥393.7
billion for fiscal 2019, compared with positive free cash flow of ¥27.3 billion for fiscal 2018.
Net cash from financing activities was ¥373.5 billion as Sumitomo Dainippon Pharma
procured bridging loans and Sumitomo Chemical issued corporate hybrid bonds (publiclyoffered subordinated corporate bonds). The balance of cash and cash equivalents at the endof the fiscal 2019 fell by ¥21.0 billion year on year to ¥180.6 billion.
The Sumitomo Chemical Group refrains from providing earnings forecasts and dividend
projection for fiscal 2020, as reasonable calculation for such outlook and the assumption of
future foreign exchange rates and naphtha prices is not currently feasible in the face ofCovid-19 pandemic.
Going forward, the Sumitomo Chemical Group will examine the business trend, factoring in
the impact of the pandemic, and announce financial forecasts as soon as the situation
allows such calculation.

Consolidated statements of profit or loss
Years ended March 31, 2020(FY2019) and 2019(FY2018)
Millions of yen
FY2019FY2018

Thousands ofUS dollars*
FY2019

Sales revenue

2,225,804

2,318,572

20,452,118

Cost of sales(1,519,047)(1,576,299)(13,957,980)

Gross profit
Selling, general and administrative expenses

706,757

742,2736,494,138(575,135)(590,062)(5,284,710)

Other operating income

11,590

11,154

106,496

Other operating expenses(14,928)(17,594)(137,168)

9,233

37,201

84,839137,517

182,972

1,263,595

Share of profit of investments accounted forusing the equity method
Operating income
Finance income

13,178

16,615

121,088

Finance expenses(20,215)(11,217)(185,748)

Income before taxes

130,480

188,370

1,198,934(76,081)(35,904)(699,081)

54,399152,466

499,853

Owners of the parent

30,926

117,992

284,168

Non-controlling interests

23,473

34,474

215,685

Net income

54,399152,466

499,853

Income tax expenses
Net income
Net income attributable to:Yen
FY2019FY2018US dollars*
FY2019Earnings per share:
Basic earnings per share

18.91

72.17

0.17

Diluted earnings per share㸫72.12㸫Yen
FY2019FY2018US dollars*
FY2019Dividends per share:
Interim dividends

11.00

11.00

0.10

Year-end dividends

6.00

11.00

0.06

For the year

17.00

22.00

0.16

(Note)*U.S. dollar amounts are translated from yen, for convenience only, at the rate ofࠉࠉ¥108.83= $1 prevailing on March 31, 2020.

㻌䚷Consolidated statements of comprehensive income
Years ended March 31, 2020(FY2019) and 2019(FY2018)
Millions of yen
FY2019Net income

FY2018

Thousands ofUS dollars*
FY201954,399152,466

499,853(13,397)(7,341)(123,100)(8,323)

667(76,477)(4,812)

1,496(44,216)(26,532)(5,178)(243,793)

1,871

561

17,192

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

(45,048)

4,782(413,930)(2,050)(4,485)(18,837)(45,227)858(415,575)

Other comprehensive income, net of taxes(71,759)(4,320)(659,368)

Total comprehensive income(17,360)

148,146(159,515)(39,080)

110,448(359,092)

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

Total comprehensive income attributable to䠖
Owners of the parent
Non-controlling interests

21,72037,698

199,577

Total comprehensive income(17,360)

148,146(159,515)(Note)*U.S. dollar amounts are translated from yen, for convenience only, at the rate ofࠉࠉ¥108.83= $1 prevailing on March 31, 2020.

㻌Consolidated statements of cash flows
Years ended March 31, 2020(FY2019) and 2019(FY2018)
Thousands ofUS dollars*
FY2019Millions of yen
FY2019FY2018Cash flows from operating activities:
Income before taxes

130,480

188,370

1,198,934

Depreciation and amortization

131,741

112,495

1,210,521Impairment loss

37,32824,639342,994(61)(2,969)(561)

Share of profit of investments accounted for using the equity method(9,233)(37,201)(84,839)

Interest and dividend income(10,904)(10,849)(100,193)

Interest expenses

12,513

10,623

114,977

Business structure improvement expenses

7,806

9,067

71,727(48,475)(8,950)(445,419)

Reversal of impairment loss

Changes in fair value of contingent consideration
Gain on sale of property, plant and equipment(931)(1,434)(8,555)(10,938)(26,600)(100,505)

Increase in inventories(11,713)(35,613)(107,627)

Increase in trade payables(22,048)(18,673)(202,591)

Increase in provisions(8,060)4,124(74,060)

Others, net(52,303)

38,041(480,594)

Subtotal

1,334,209

Increase in trade receivables

145,202245,070

Interest and dividends received

27,03332,999248,397

Interest paid

(12,733)(10,940)(116,999)

Income taxes paid

(48,688)(50,161)(447,377)

Business structure improvement expenses paid

(4,802)(8,825)(44,124)

Net cash provided by operating activities

106,012208,143974,106

Cash flows from investing activities:
Payments of deposit(61,028)

㸫(560,764)

Purchase of property, plant and equipment, and intangible assets(120,449)(174,816)(1,106,763)

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

1,974

4,010

18,138Purchase of investments in subsidiaries(204,592)(3,348)(1,879,923)

Purchase of other financial assets(122,493)(9,126)(1,125,544)

6,763

2,420

62,143

155

23

1,424

(499,670)(180,837)(4,591,289)

Proceeds from sales and redemption of other financial assets
Others, net
Net cash used in investing activities
Cash flows from financing activities:
Net increase in short-term borrowings

237,592

3,180

2,183,148

Net decrease of commercial paper(28,000)(4,000)(257,282)

Proceeds from long-term borrowings

67,68989,190621,970

Repayments of long-term borrowings(85,657)(67,871)(787,072)

Proceeds from issuance of bonds

282,575

49,7252,596,481

Redemption of bonds(30,500)(77,000)(280,254)

Repayments of finance lease obligations(14,778)(3,175)(135,790)

Cash dividends paid
Cash dividends paid to non-controlling interests
Payments for acquisition of subsidiaries' interests from non-controlling interests(35,970)(16,717)(2,622)(37,606)(13,521)(2,205)(330,515)(153,607)(24,093)

Others, net
Net cash provided by (used in) financing activities

(70)

2,417

(643)

373,542(60,866)

3,432,344

(914)

3,309

(8,398)Net decrease in cash and cash equivalents(21,030)(30,251)(193,237)

Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

201,678
180,648

231,929
201,678

1,659,910

Effect of exchange rate changes on cash and cash equivalents(Note)
䚷䚷*U.S. dollar amounts are translated from yen, for convenience only, at the rate ofࠉࠉ¥108.83= $1 prevailing on March 31, 2020.

1,853,147

Segment information
Years ended March 31, 2020(FY2019) and 2019(FY2018)
Millions of yen
Reporting segments
Petrochemicals&Plastics

Energy &Functional
Materials

IT-related
Chemicals

Health &CropSciences

Pharmaceuticals

TotalOthers

Adjustments

Consolidated

FY2019
Sales revenue
Sales revenues fromexternal customers
Inter-segmentsales revenues

656,929

255,034

404,871

343,666

515,845

2,176,345

49,459㸫

2,225,804

5,828

9,533

1,013

5,600

49

22,02358,844(80,867)㸫Total sales revenue

662,757

264,567

405,884

349,266

515,894

2,198,368

108,303(80,867)

2,225,804

Segment profit(core operating income)

14,485

20,34325,0842,083

75,266137,261

8,770(13,379)

132,652

Segment assets

725,697

305,523

387,907656,470

1,312,719

3,388,316

280,831(18,815)3,650,332

Depreciation andamortization

27,85015,852

28,97326,081

20,020118,776

7,468

5,497

131,741

Share of profit (loss) ofinvestments accounted
for using the equity method

3,179

(23)

1

(1,150)

(5)

2,002

7,240

(9)

9,233

Impairment loss

1,108

781

225

18

35,19637,328㸫㸫

37,328

Reversal of impairment loss

㸫

㸫

61

㸫

㸫

61

㸫

㸫

61

Investments accounted
for using the equity method

152,410

191

455

7,374

1,060

161,490

105,847(3,283)

264,054

Capital expenditures

23,834

21,383

21,581

19,677

17,012

103,487

5,020

7,841

116,348757,529

282,850

396,839338,094

492,130

2,267,442

51,130㸫

2,318,572

6,161

7,892

952

5,648

13

20,66662,265(82,931)㸫

Total sales revenue

763,690

290,742

397,791

343,742

492,1432,288,108

113,395(82,931)2,318,572

Segment profit(core operating income)

61,61022,95926,227

19,71680,764211,276

9,422(16,446)

204,252

Segment assets

756,996

312,096389,744591,995

896,7022,947,533

282,911(58,826)

3,171,618

Depreciation andamortization

22,047

15,43731,087

18,714

16,260103,545

5,647

3,303

112,495

Share of profit (loss) ofinvestments accounted
for using the equity method

31,230205(1,107)

27

30,175

6,909

117

37,201

Impairment loss

535

878

200

㸫

22,996

24,60919

1124,639

Reversal of impairment loss

㸫

2,969

㸫

㸫

㸫

2,969

㸫

㸫

2,969

Investments accounted
for using the equity method

165,455

214

455

26,853

1,055

194,032

108,286(3,274)

299,044

Capital expenditures

31,46624,281

33,55039,931

16,861

146,089

12,302

5,272

163,663

Other items

FY2018
Sales revenue
Sales revenues fromexternal customers
Inter-segment
sales revenues

Other items

Segment information
Years ended March 31, 2020(FY2019) and 2019(FY2018)
Adjustments to income before taxes from segment profit were as follows:
Millions of yen
FY2019Segment profit

FY2018132,652

204,252

Changes in fair value of contingent consideration

48,475

8,950

Gain on sale of property, plant and equipment

931

1,434

Reversal of impairment loss

61

2,969

Impairment loss

(37,328)(24,639)

Restructuring charges(7,806)(9,067)532(927)

Operating income

137,517

182,972

Finance income

13,178

16,615

Finance expenses(20,215)(11,217)

Income before taxes

130,480

188,370

Others, net

Overseas operations
Years ended March 31, 2020(FY2019) and 2019(FY2018)
FY2019Overseasoperations

FY2018Millions of yen

Thousands of
US dollars*Share (%)

Growth (%)

Millions of yen

1,460,749

13,422,301

65.6

-3.0

1,505,711(Note)
䚷䚷*U.S. dollar amounts are translated from yen, for convenience only, at the rate ofࠉࠉ¥108.83= $1 prevailing on March 31, 2020.

(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 areforward-looking statements about the future performance of Sumitomo Chemical. These statements are based on management’s assumptions andbeliefs 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 notlimited to, general economic conditions in Sumitomo Chemical’s markets; demand for, and competitive pricing pressure on, Sumitomo Chemical’sproducts 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.