Long-term Management Policy
andMedium-term Management Plan
(FY2015–2017)
Hiroshi Yao, President
Mitsubishi Materials Corporation
May 14, 2014
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Materials Premium 2016

Contents
Ⅰ Long-term Management Policy
Ⅱ Overview of Medium-termManagement Plan (FY2015–2017)
Ⅲ Business Strategy by Segment
Ⅳ Reference Materials

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Materials Premium 2016

Ⅰ Long-Term Management Policy

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Materials Premium 2016

Long-term Management Policy: Overview
VisionWe will become the world’s leading business group committed tosupporting recycling-oriented society through materials innovation,with use of our unique and distinctive technologies.
What the keywords mean to usmaterials

This term refers not only to resources, raw materials and products, but to everything of valuethat Mitsubishi Materials provides, including services, solutions and personnel.

uniqueThis term is strongly charged with the meaning of things that make Mitsubishi Materials special,things we can do because we are Mitsubishi Materials, things only Mitsubishi Materials can do.
These are things that set us apart from the rest.

world’s leadingThis term indicates a group of companies that pursues uniqueness across its entire businessmodel in each operation, embracing regions, markets, products, productivity, quality, service
and more, at every level, including the Group as a whole, internal companies, department,
companies, locations and workplaces, to be world’s leading business group and one-of-a-kind.

business group

Target State
By achieving above vision and earning the trust of customers , each Mitsubishi
Materials operation occupies an important position in each industry and market.

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Materials Premium 2016

Long-term Management Policy: Overview（Policy towards 2020s）
Corporatephilosophy

For People, Society and the Earth
VisionWe will become the world’s leading business group committed to supporting recycling-oriented
society through materials innovation, with use of our unique and distinctive technologies.
Image for scale of operations

Net sales of ¥2 trillion or more, net income of¥100 billion or more

CementResources andrecycling◆No. 1 ROA in global
cement industry◆Major player in the Pacific
Rim

Metals◆captive mine ratio 50%◆No. 1 globally in processing of
precious metals scrap (E-Scrap)◆No. 1 globally in profitability fromcopper processing

Electronic Materials &Components

Uniquetechnologies

Advanced Materials & Tools◆Over 10% global share of
cemented carbide products◆No. 1 ROS in industry for highperformance alloy products

Processed
goods◆A high-profitability operator withthe world’s No. 1 product lineup

Materials

Sustainable growth

Global strategy
Personnel strategy

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Materials Premium 2016

Technology and development
strategy

Aluminum◆No. 1 global share in
extruded multi-hole tubes
for heat exchangers◆No. 1 domestic share inaluminum cans forbeverages

Ⅱ Overview of Medium-termManagement Plan (FY2015–2017)

6|Materials Premium 2016

Positioning of Medium-term Management Plan
2014

2016

Medium-term
management
plan
Materials Premium 2016

Early 2020s

Long-term
management policy

Challenge to become theworld’s leading business group

Furtherflying up
Period of medium-term
management plan

Accelerating
growthFortifying thefoundation

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Materials Premium 2016

World’sleadingbusinessgroup
By achieving its visionand earning the trust ofcustomers , each
Mitsubishi Materials
operation occupies animportant position ineach industry andmarket.

Medium-term Management Plan: Overview

Medium-term Management Plan （FY2015-2017）
Materials Premium 2016－
Challenge to become the world’s leading business group

Management Targets
FY2014FY2017

 Operating profit¥66.2 billion

 Ordinary income¥76.9 billion¥100 billion¥110 billion
6%
1.0 time or lower

 Return on assets (ordinary income base) Net D/E ratio

4.3%
1.3times

Growth Strategy
 Fortifying the foundation for growth Strengthening global competitiveness Pursuing a recycling-based business model
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Consolidated Financial Targets

Cash flow
3-year cash flow
(FY2015–2017)

CF from operating activities¥361 billion(Depreciation cost)¥176 billion

CF from investing activities
Free cash flow(¥318 billion)¥43 billion

Financial soundness
Interest-bearing debt (\billions)

D/E ratio (times)

Net D/E ratio (times)

1,000

5.0
796.0

800
690.3

784.7
708.8

706.0

692.9

4.0
649.8

630.0

650.0

600

3.0
2.3

2.3
2

1.9
400

1.7

1.5

2.1

2.0

1.7
200

1.4
1.8

2.0
1.3

1.1

1.6

1.3

1.3

1.2

1.0
1.0

0

0.0
FY20089|FY2009FY2010Materials Premium 2016

FY2011FY2012FY2013

FY2014FY2015FY2017

Plan by Segment(¥billions)
FY2017FY2014
Net sales

Operating profit

Ordinary income

Net sales

Operating profit

Ordinary income

Cement

190.1

19.1

18.8

229.0

35.0

35.0

Metals750.9*

23.7*

37.8*

810.0

30.0

40.0

Advanced
Materials & Tools

145.8

14.0

13.9

168.0

23.0

23.0

Electronic
Materials &Components

67.7

4.0

2.1

88.0

7.0

6.0

Aluminum

151.5

5.5

4.7

175.0

8.0

7.0

Others, elimination,etc.

108.5*

-0.3*

-0.7*

130.0

-3.0

-1.0

Total

1,414.7

66.2

76.9

1,600.0

100.0

110.0

* Results for FY2014 is based after reclassification of precious-metals segment.

Assumptions

10

FY2014FY2017

Average TTM rate (yen/$)

100

100

Average TTM rate (yen/€)

134

130

Copper price LME (￠/lb)

322

300

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Group-wide Growth Strategy

Fortifying
the foundation
for growth

Strengthening
globalcompetitivenessPursuing a
recycling-based
business model

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 Enhancing safety management systems and securing stable
operations
 Strategic investment (M&A, etc.) to embody sustainable growth Improving financial position continuously (raising profitability
through business selection and focus)

 Expanding current location, and deploying new production andsales location with focus on emerging countries

 Improving competitiveness by developing new customers andmarkets (strategic marketing) Achieving long-term growth by pursuing a recycling-oriented valuechain
 Establishing a business model unique to Mitsubishi Materials by
realizing Materials Premium, our strength as conglomerate.

Group-wide Growth Strategy ①Fortifying the foundation for growth
Strategic investments to accelerate sustainable growth Cumulative investment plan, FY2015–2017

Total investment: ¥330 billion
Maintenance and upgrading

40% (¥130 billion)

Expansion/rationalization/new（¥100 billion)of which By region

Japan

23%

50%

“Other” includes mining and M&A

AM&T

18%

20%

12%

(¥58 billion)(¥67 billion)(¥41 billion)¥15 billion

EM
&C

5%

Aluminum

9%(¥28
billion)

Over
seas

50%

(¥100 billion)

MetalsMaterials Premium 2016¥100 billion

Asia 22% (¥22 billion)
N. America 12% (¥12 billion)
Other 66% (¥66 billion)(¥30
billion)¥30 billion¥70 billion

MiningM&A, etc.

Over
seas

Cement|investments

60% (¥200 billion)

Japan 77%

12

of which Strategic(¥100 billion)
Others

All companies

5%31%(¥103 billion)¥18 billion

Group-wide Growth Strategy②Strengthening global competitiveness

Expansion of existing locations and deployment of new
production and sales locations with focus on emerging countries
 Improvement of global competitiveness by developing newcustomers and markets through strategic deployment of marketing

Existing locations

Europe

Produ
ction

Sales

Other

2

6

4

Overseas net sales by region

New locations
Produ
ction

(¥billions)

Sales

Other

2

6,000
600
5,000
500

Other
EuropeU.S.

Americas

16

8

11

1

2

8

10

4

1

5

Asia

21

19

4

7

1

Other

2

1

3

China

1

4,000
400
China
3,000
300
2,000
200

2

Asia

1,000
100
0
FY2014
results FY2017
plan
13年度実績
16年度目標

TOTAL
13

|

49

44

Materials Premium 2016

26

9

10

3

Note:1) “Asia” excludes Japan and China
2) Excludes bullion

Group-wide Growth Strategy ③Pursuit of a Recycling-based Business Model
Recycling-based Business Model in Each Segment

Resources

Materials

Processed
products

Recycling

Mine

Metals|EM&C

Aluminumーー(Lime and
coal)

Mine

Mine

(Copper)(Tungsten)

CementCopper(Tungsten)

Hydrofluoricacid

AluminumTomarketReady-mixed
concrete,concreterelatedproducts

Processed
copperproducts

Cemented
carbide tools

Advancedmaterials,
electronic
devices,siliconProcessed
aluminum
goods,
AluminumcansTomarketUsedcemented
carbidetools

Calcium
fluoride

Usedbeveragecans

Industrial
waste

E-scrap

Recycling of home appliances
Recycling of automobiles

14

AM&T

Materials Premium 2016

Social infrastructure, automobiles,
electronics

CementMarketGroup-wide Growth Strategy ③Pursuing a recycling-based business model

Establishing a business model that realizes Materials
Premium
E-scrap

Processed
copper products

MetalsIndustrial
waste
Byproducts

Pursuit of arecycling-oriented
value chain
Readymixed
concrete

CementCoppersmelting

Cement(Plants)(Smelters)

Automobile
recycling
operations

Automobile
recycling companies
Supportfor wastevehicle
supplyAutomakers
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Materials Premium 2016

Reclaimed items

Return ofresources

Supply ofscrapmaterials

Final
disposalsite
Recycling
operations

Final treatment
plants

Sorting and dechlorination plants
Incineration
ash

Incineration
facilities

Ⅲ Operating Strategy by Segment

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Cement
Long-term Targets
 No. 1 ROA in global cement industry
 Major player in the Pacific Rim

Medium-term Management Targets(¥billions)300

Net sales(¥billions) Operating profit
40

40

20

35.0

229.0

9%

5%

20

35.0

5%

190.1
10

10

19.1

FY2014FY2017

Materials Premium 2016

18.8
0%

0

0

0

|

10%

Ordinary income

30

200

17

Ordinary income, ROA
ROA

30

100

(¥billions)

FY2014FY2017FY2014FY2017

Cement
Business environment during the medium-term management plan period
Forecast of cement
demand in Japan(Millions of t)
FY1991 peak:

90
80
70
60
50
40
30
20

FY2014: 48 million tons
FY2017: 48 million tons
Medium-term Management
Plan (FY2015–17)48 million t

Forecast of cement demandin southern California (U.S.)
12(Millions ofshort tons)

10
FY2014 (forecast)48 million t

FY2014: 5.9 million short tons
FY2017: 9.0 million short tons
Domestic products

FY2006 peak:
11.04 million t

Imported products

8
6
4
2
0
FY06

To FY2015 forecast: Published figures from the Japan Cement Association
FY2016 and later: Mitsubishi Materials forecast

08

10

12

14

16

18

To FY2010: USGS Cement Statistics and Information
To FY2014: Actual results published from PCA Forecast 2013 winterFor FY2023: Mitsubishi Materials forecast

Business strategy during the medium-term management plan periodJapan

 Stably supply for booming demand due to earthquake disaster reconstruction, hosting ofTokyo Olympics, etc.
 Promote integrated business capabilities to expand recycle operations

UnitedStates Expand cement supply abilities by such measures as terminal expansion, etc.
 Expand earnings from ready-mixed concrete operations by new construction andpurchasing of ready-mixed concrete plants, and securing of aggregate quarries

Emerging
countries18|

 Deploy operations in emerging countries by such measures as building new cement
plants, terminals and relationships with local companies
Materials Premium 2016

Cement
Key growth strategy: Expansion of US operations and deployment in emerging countries■US operations

Expansion of cement supply system

Increase in earnings from ready-mixed concrete operations

Expansion of cement
supply system

Expansion of MCC
terminal in Long
Beach

Procurementfrom othercompanies

MCC

Establish MCC
terminal in San
Diego■Emergingcountries

Ready-mixed
concrete plants
Aggregate quarries

Building relationships with local capital and new construction of cement plants and terminals to deploy
operations in emerging countries▼ Sample approaches
Period of medium-term management plan
Export approach
Acquisition/JV approach

Building
relationships withlocal capital

Pre-F/S for plant construction

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Materials Premium 2016

Construction of cement terminals → Establishment of acement supply system
Acquisition of local plants / operations with JVs

F/S such as site selection

Afterward
Futureconstruction of
cement plants

Metals
Long-term Targets
 Mining

Captive mine ratio 50％ *＊Captive mine ratio= (Copper production volume as share of concentrate rights)/(Electrolytic
copper production volume from concentrate) Smelting No.1 globally in processing of precious metals scrap (E-Scrap) Copper processing

No. 1 globally in profitability

Medium-term Management Targets（¥billions）（¥billions）

Net sales（¥billions)

Ordinary income, ROA

40

800

50
30

600

400

Operating profit

750.9

810.0

ROA

6%

20

10

0

23.7

0

FY2014FY2017

6%

25

30.0
200

10%

Ordinary income

5%

37.8

40.0

FY2014FY20170

FY2014FY20170%Note: Results for FY2014 are indicated according to the classifications after the reclassification of precious-metals segment.
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Materials Premium 2016

Metals
Business environment during the medium-term management plan period
 China has overcapacity in both the smelting and copper processing fields.
 The domestic demand will not recover as domestic manufacturers have moved overseas withyen appreciation, but overseas demand will increase.
 Price competition with products from emerging markets is intensifying globally in processed
copper products.
 We expect a certain degree of recovery in TC/RC, because the slowdown in the Chinese
economy will ease demand for copper concentrates for the time being

Business strategy during the medium-term management plan period
MiningSmelting

 Strengthening of recycling operations; responding to increasing generation of precious
metals scrap (e-scrap) overseas by expanding collection and pretreatment facilities
 Utilizing slag (smelting by-products) effectively

Copperprocessing21 Launching of new mine development（Zafranal in Peru, etc.)

 Expanding sales of new alloy MNEX® for volume-zone markets in emerging-country
 Establishment of slitting facilities and sales location in emerging countries
 Cultivating new markets with unique alloys such as lead-free products (“ECOBRASS®”)and discoloration-resistant antimicrobials products (“CLEANBRIGHT®” )|Materials Premium 2016

Metals
Key Growth Strategy: Strengthening Recycling Operations(Mitsubishi Materials estimate for 2016)

No. 1 globally in processing of
E-scrap
Japan

EuropeNorth America

Establish cargo-handling location

Asia

2013

Toward global No. 1
market share

Total E-scrap
marketVolumegenerated

Volumetreated2016
Volumegenerated

|

13%
11%
MMC processing
volumeMarket share

Volumetreated(Size of circle indicates volume)

22

15%

Materials Premium 2016

2011

2012

2013

2014

2015

2016

Advanced Materials & Tools
Long-term Targets
 Cemented carbide products
Over 10% global share High-performance alloy products World No.1 in ROS

Medium-term Management Targets(¥billions)（¥billions）

Net sales

Operating profit（¥billions） Ordinary income, ROA

200
30

30

150

Ordinary income
ROA

20

10% 10%

20

100

145.8

8%

168.0

23.0

10

50

0

FY2014|FY2017

Materials Premium 2016

23

10

14.0

23

15%

13.9
0

0

FY20145%FY20170%

FY2014FY2017

Advanced Materials & Tools
Business environment during the medium-term management plan period

Demand is continuously expanding for cemented carbide tools used for automobiles, aircraft and medical equipment.
Forecast of automobile unit
sales(Millions of units/year)

120
100

9,340
81.70

Forecast of aircraft units anddemand (by region)(No. units)

Other emerging 30,000
countries
Brazil
25,00021,80018,590

Other emerging
countries
Middle East

Forecast of global market for
medical equipment(Billions of
US dollars)

600
500

80

India

20,00060

China

15,000Latin Amrica

300

Europe10,000Asia Pacific200

RegionEurope100

40
20

N. America

0
FY2013

FY2017

Japan

5,000
0
FY2013

FY2017

N. America

400

41.0
307.8

Other
Asia
EuropeN. America
Japan

0
FY2013

FY2017

Business strategy during the medium-term management plan period
Cemented carbide products
 Expansion of sales through industry-based team such as automobiles, aircraft and medical
equipment Expansion of sales networks and production location, focusing on emerging countries
 Enhancing tungsten recycling

High-performance alloy products Increasing market share among auto-parts manufacturers by expanding existing production
locations and opening new ones
 Expanding sales of eco-car parts (VVT, etc.) by improving quality while reducing sales price24|

Materials Premium 2016

Advanced Materials & Tools
Key growth strategy: Expansion and deployment of overseas bases
Cemented carbide products

High-performance alloy products

Expanding sales networks and production locations,focusing on emerging countries

Increasing market share among auto parts manufacturers by
expanding existing production locations and opening new ones

Expansion of sales networks in China, eastern
Europe and other emerging countries



Expansion of production locations in Asia andemerging countries

Cemented carbide product network
New sales networks*

Expansion of overseas sales of eco-car parts



Expansion of production locations in Asia andemerging countries

Overseas net sales in Advanced Materials & Tools by region

Existing sales subsidiaries* Establishment of new overseas sales companies, branches andoffices, and dealerships
EasternEurope(¥billions)

100

80
China
India

920

90
77.0

70

Other emerging
countries

60

Asia

50
China

40
Southeast
Asia

30
South
America

Europe

20
U.S.

10

0
FY201425|

Materials Premium 2016

FY2017Electronic Materials & Components
Long-term Targets
 A high- profitability operator with the world’s No. 1 product lineup

Medium-term Management Targets(¥billions)(¥billions)

Net sales

Operating profit(¥billions)

100

10.0

10.0

75

7.5

7.5

Ordinary income, ROA
Ordinary income
ROA
4%

50

88.0

7.0
2.5

4%

5.0

5.0

67.7
25

6%

2%
2.5

4.0

6.0

2%

2.1
0

0.0

FY201426|

0.0

FY2017

Materials Premium 2016

FY2014FY20170%

FY2014FY2017Electronic Materials & Components
Business environment during the medium-term management plan period

Advanced materials
 Demand is expected to increase for semiconductors, products used in displays and heatdispersion substrates for railways and industrial equipment.

Devices Ratios for air conditioner and refrigerators equipped with inverter will expand due to energysaving regulations.
 Demand for sensor products will expand due to introduction of emissions regulations in Europe
for cars, trucks and motorcycles.

Business strategy during the medium-term management plan period
Advanced materials and electronic devices
 Promotion of marketing-driven R&D to achieve rapid development and commercialization ofunique, value-added strategic products
 Optimization of products portfolio through selection and focus as well as M&A

Silicon Aiming for a recommencement of Yokkaichi Plant, the Group aims to thoroughly elucidate thecauses of the accident and establish systems for safety and production technology.
 Ensuring early stabilization of overall silicon business(The Group will continue to observe autonomous reconstructing at SUMCO.)
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Materials Premium 2016

Electronic Materials & Components
Key growth strategy: Strengthening of production and sales systems foradvanced materials and devices
Advanced materials

DevicesStrengthening of production
systems for target materials

Strengthening of production andsales systems

 To expand production at low cost, the Group willsecure overseas production contractors and build
a new factory in Laos, a country with low-cost(estimating time of starting operation, March
2015).

Expand production for display market
Securing production location in Taiwan

Expand production of cylinder types and large
types
Differentiation from the customer’s viewpoint using
special production technologies



Main users

Production locations
for absorber andsensor elements

Development of new alloys (Ag, Cu)
Realizing Materials Premium in ingredients,
production, recycling, etc.

新工場
（計画中）

Sensor production
locationsContractors

DBA for the railway and industrial
equipment markets
 Developing new markets and customers in
next-generation vehicle applications aswell as railways and industrial equipment

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Materials Premium 2016

Overseas sales
companies

AluminumLong-term Targets
 Rolling and processing

No. 1 global market share in extruded
multi-hole tubes for heat exchangers
No. 1 domestic share in aluminum cans forbeverages
Industry No.1 in UBC usage

 Can manufacturing

Medium-term Management Targets(¥billions)(¥billions)

Net sales

200

Operating profit(¥billions)

Ordinary income, ROA

10.0

10.0

6%

Ordinary income
150

100

151.5

175.0

50

5.0

5.0

FY2017

Materials Premium 2016

5%

ROA
3%

8.0
5.5

3%

7.0
2.5

0.0

FY2014

|

7.5

2.5

0

29

7.5

4.7

0.0

FY2014FY20170%

FY2014FY2017

Aluminum
Business environment during the medium-term management plan periodMarket in Japan

Overseas markets

 Domestic demand will hit a ceiling due to population decline, lowbirthrate, etc.

Rolling and processing: Offshoring of customer production bases and shift tolocal procurement
Beverage can manufacturing: Stable demand for aluminum cans

 Customers and competitors in Japan
Rolling and processing: Mergers among competitors are bringing powerful new
top companies into the market.
Can manufacturing: Beverage producers are becoming more selective for can
suppliers

Marketexpansion in
emerging
countries andintensifying
competition

Business strategy during the medium-term management plan period
Rolling and processing Strengthening of existing overseas locations for extruded multi-hole tubes for heat exchangers andsheet metal Launching a company in India and achieving profitability
 Serving needs for light weight and low cost in automobiles and electronics

Can manufacturing
 Enhancing a system for increasing production by speeding up existing lines
 Strengthening bottle can sales overseas
 Strengthening collaboration among collection, casting and rolling in aluminum-can recycling
30|

Materials Premium 2016

Aluminum
Key growth strategy: Strengthening of existing overseas bases andestablishment of new ones
 Rolling and processing (Mitsubishi Aluminum Co., Ltd.)
Focusing business resources on extruded perforated tubes for heatexchangers and sheet metal, and expanding global business Can manufacturing (Universal Can Corporation)
Strengthening bottle cans sales overseas

Global deployment of heat-exchanger operations by Mitsubishi Aluminum
Japan: Fuji Plant, Mitsubishi Aluminum
Automobile heat exchangers and air
conditioner:31,600t/year
China: MA China Extrusion (Suzhou) Co., Ltd.
Automobile heat exchangers: 4,500t/year

India: scheduled to start operations in 2015

New
Automobile heat exchangers: 2,700t/year

Thailand: Muang-max(Thailand) Co., Ltd.

Expanded
Automobile heat exchangers：
7,200t/year
Thailand: Varopakorn Public Co., Ltd.
Automobile heat exchangers, airconditioner: 8,600t/year31|

Materials Premium 2016

United States: Thermalex Inc. Expanded
Automobile heat exchangers, air conditioner:
13,000t/yearOthers: Renewable Energy
Based on the precious management resources it has cultivated over many years, Mitsubishi Materials is
expanding its business in renewable energy. By providing a stable supply of environmental-friendly energy, theCompany is contributing to sustainable society.
Target state: Supplying 1,000MW of the 3,500MW which is forecasted to be generated by geothermal power inJapan in 2030.
Hydroelectric:
Existinghydroelectric power
plants will be
upgraded and newones will be built (inplanning)

Geothermal:
Musadake (longterm plan)
Geothermal: Komonomori(long-term plan), Appi (longterm plan)

Hydroelectric: Komatagawa
No. 4 hydro-power plant
Mega-solar: Irigama

Mega-solar: Fukui

Mega-solar: Makabe
Mega-solar: Torigoe

32|

Materials Premium 2016

Geothermal: Bandai, Azuma,
Adatara (long-term plan)

Geothermal: Onuma Geothermal
Power Plant

Geothermal:
Wasabizawa (longterm plan)Aims of the Medium-term Management Plan (2015–2017)

Materials Premium 2016
Taking up the Challenge of Becoming
the world’s leading business group
Fortifying
the foundation forgrowthStrengthening
globalcompetitivenessPursuing a
recycling-based
business model

33|

Materials Premium 2016

Strengthening
the foundation
in a bid toachieve thestatus of theworld’s leadingbusiness group

Ⅳ Reference Materials

34|

Materials Premium 2016

Recap of Previous Medium-term Management Plan (FY2012–2014) ①

Management indices and results






35

|

Management
index

FY2012FY2013

FY2014

Ordinary income¥110 billion¥42.4 billion¥74.4 billion¥76.9 billion

Return on assets
(ROA)

6％

2.4％

4.2％

4.3％

Net D/E ratio

1.5 times orlower

1.8 times

1.6 times

1.3 times

The Group missed its targets for ordinary income and ROA. Reasons include a significant drop in dividends
received from copper mines, failure to achieve the sales volume plan for cemented carbide products and aslump in silicon operations.
The Group achieved its target for net D/E ratio. Factors include a weakening yen exchange rate, an increasein net assets due to rising share prices and a decrease in interest-bearing debt from sale of assets.
Investments reached only ¥253.6 billion, compared with a plan of ¥275.0 billion (3-year plan) because of achange in business environment. However, the Group decisively achieved growth-strategy investments suchas conversion of Robertson’s Ready Mix into a wholly owned subsidiary of Mitsubishi Materials.

Materials Premium 2016

Recap of Previous Medium-term Management Plan (FY2012–2014) ②
Business advancement in overseas markets, especially emerging markets
 Advancement of sintered products manufacturing bases in China and Indonesia
 Expansion of sales bases in China for cemented carbide products operations
 Expansion of aluminum extruded heat-exchanger operations into India

 Complete conversion to wholly owned subsidiaries of ready-mixed concrete andaggregate sales companies in the United States Participation in development of copper mines in Peru

Realization of Materials Premium Expansion of acceptance of earthquake-disaster waste and difficult-to-treat waste
through advanced use of smelting and cement recycling systems

 Promotion of the use of copper slag as concrete aggregates Development of long cylindrical target materials which utilize raw procurement
capabilities and technologies such as recycling, dissolution, forging and rolling.
 Development of flexible thermistors using coating technologies of cemented
carbide tools.
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Materials Premium 2016

Reference: Assumptions and Sensitivity ①
FY2013

Statistics / Assumptions

FY2015FY2017（full year） （full year） （full year） （full year）

Results

37

FY2014
Results (a)Forecast

Forecast (b)Difference(b-a)

Average TTM rate (yen/$)

83

100

102

100

0

Average TTM rate (yen/€)

107

134

140

130

-4

Total demand for cement in Japan (million tons)

44.58

47.71

48.00

48.00

0.29

Cement sales volumes for MMC-Domestic (million tons)

6.59

7.42

7.49

7.90

0.48

Cement sales volumes for MMC-Exports (million tons)

2.73

2.28

2.51

2.50

0.22

Total demand for cement in the U.S. (million tons)

76.47

79.84

86.01

104.2024.36

Cement sales volumes in the U.S. (million short tons)

1.53

1.68

1.75

2.30

0.62

Copper price LME

356

322

310

300

-22

Sales of cathodes(in-house product) (thousand tons)

284

289

272

300

11

Sales of cathodes(exports) (thousand tons)

98

114

135

90

-24

Sales of cahodes (PTS) (thousand tons)

202

198

275

260

62

Processed copper products sales volumes(thousand tons)

129

143

154

160

17

Dividends from copper mine (￥billions)

24.5

15.1

12.6

14.0

-1.1

|

(￠/lb)

Materials Premium 2016

Reference: Assumptions and Sensitivity ②
Statistics / Assumptions
SUMCO's net income (￥billions)
MMC's equity method investment gain (￥billions)

Sensitivity (operating profit base)Exchange rate

FY2013(full year)

FY 2014(full year)

FY2015(full year)

FY 2017(full year)

Results

Results (a)Forecast

Forecast (b)Difference
(b-a)

3.4

0.7

9*

－*

－

0.6

-0.1

2.2*

－*

－

Per year¥/US$(yen appreciation)-700 JPY million¥/€(yen appreciation)-100 JPY million

Copper price (LME) operating profit
non-operating profit

10￠/lb500 JPY million

10￠/lb1,500 JPY million* For net income for SUMCO in FY2015, the figure for H1 announced February 14, 2014 is used. For H2, the same amountas for H1 is used, because SUMCO has not yet announced its full-year forecast.
Furthermore, SUMCO’s medium-term plan is not appropriated for FY2017 because it has not yet been made public.

38|

Materials Premium 2016◆Forward-Looking Statements◆
These future plans and other statements are based on information available to theCompany’s management as of the day for releasing this material. There are many
uncertain or risk factors inherent in plans, and there might be cases in which actual
results materially differ from plans and other statements of this material.

Mitsubishi Materials Corporation

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Materials Premium 2016