Consolidated Financial Results for the Fiscal Year Ended March 31, 2020
(Japanese Accounting Standards)
May 27, 2020
Name of Listed Company: Mitsubishi Materials Corporation
Listing:
Tokyo Stock Exchange
Stock Code:
5711
URL:
https://www.mmc.co.jp/
Representative: Naoki Ono, Chief Executive Officer
Contact:
Yuji Omura, General Manager, Corporate Communications Dept.
Tel: +81-3-5252-5206
Scheduled date for ordinary general meeting of shareholders: June 30, 2020
Scheduled date of start of dividend payment:
June 16, 2020
Scheduled filing date of Annual Securities Report:
June 30, 2020
Supplementary materials for the financial results:
Yes
Investor conference for the financial results:
Yes (For Institutional Investors)(Amounts of less than million yen are omitted)

1. Results of the Consolidated Fiscal Year Ended March 31, 2020 (From April 1, 2019 to March 31, 2020)(1) Consolidated Results of Operations (cumulative)(Figures in percentages denote the year-on-year change)
Net salesYear ended March 31, 2020
Year ended March 31, 2019

Operating profit

Profit (loss)
attributable to ownersof parent

Ordinary profit

Million yen%

Million yen%

Million yen%

Million yen%

1,516,100
1,662,990

-8.8
4.0

37,95236,861

3.0-49.4

49,61050,679-2.1-36.3-72,850
1,298

–
-96.2

(Note) Comprehensive income (loss): Year ended March 31, 2020: -114,027 million yen (–%) Year ended March 31, 2019: -30,756 million yen (–%)

Profit (loss) per
share

Diluted net
income per share

Yen

Year ended March 31, 2020
Year ended March 31, 2019

Return on equity

Yen

–
–

-556.34
9.92

Ordinary profit tototal assets

Operating profit
to net sales

%

%

%

-12.8
0.2

2.6
2.6

2.5
2.2

(Reference) Share of profit (loss) of entities accounted for using equity method: Year ended March 31, 2020: 3,521 million yen
31, 2019: 3,594 million yen

Year ended March(2) Consolidated Financial Position
Total assets
As of March 31, 2020
As of March 31, 2019

Shareholders’equity ratio

Total net assets

Net assets per share

Million yen

Million yen%

Yen

1,904,050
1,938,270

586,034
723,33726.6
32.7

3,870.35
4,838.31(Reference) Shareholders’ equity: As of March 31, 2020: 506,781 million yen

As of March 31, 2019: 633,582 million yen(3) Consolidated Cash Flows
Cash flows fromoperating activities
Year ended March 31, 2020
Year ended March 31, 2019

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents
at end of period

Million yen

Million yen

Million yen

Million yen

67,545140,168-66,898-86,238

28,873-47,613

127,284
99,672

2. Dividend Payments
Dividend per share(Record date)Year ended March 31, 2019Year ended March 31, 2020
Year ending March 31,
2021 (Forecast)First
quarter

Secondquarter

Third
quarterYear-end

Yen

Yen

Yen

Yen

AnnualTotal dividend
amount(annual)Dividend payout
ratio(consolidated)

Dividend to net
assets(consolidated)

Yen

Million yen

%

%

–
–

40.00
40.00

–
–

40.00
40.00

80.00
80.00

10,476
10,475

806.6
–

1.6
1.8

–

–

–

–

–

–

(Note) The dividend forecast for the fiscal year ending March 31, 2021 has not been determined yet.

3. Consolidated Earnings Forecast (From April 1, 2020 to March 31, 2021)
The consolidated earnings forecasts for the next fiscal year has not been determined yet since the future economic
activities and trends in the demand for major products are extremely uncertain due to the global spread of COVID-19
and reasonable estimates are difficult at the moment. Mitsubishi Materials Group (hereinafter “the Group”) willpromptly announce any changes in its content if it is deemed necessary.

* Notes(1) Significant changes of subsidiaries during the term (changes in specific subsidiaries accompanied by a change inthe scope of consolidation):
None(2) Changes in accounting policies, changes of accounting estimates and restatement(i)
Changes in accounting policies due to amendments to accounting standards:(ii) Other changes in accounting policies:(iii) Changes in accounting estimates:(iv) Restatements:

Yes
None
None
None

(3) Numbers of issued shares (common stock)(i)
Numbers of issued shares at the end of period (including treasury shares):Year ended March 31, 2020:
131,489,535 sharesYear ended March 31, 2019:
131,489,535 shares(ii)
Numbers of treasury shares at the end of period:
Year ended March 31, 2020:
550,160 sharesYear ended March 31, 2019:538,493 shares(iii) Average number of shares during period:
Year ended March 31, 2020:
130,945,425 sharesYear ended March 31, 2019:
130,956,379 shares(Reference) Summary of Non-Consolidated Financial Results
Results of the Non-Consolidated Fiscal Year Ended March 31, 2020 (From April 1, 2019 to March 31, 2020)(1) Non-Consolidated Results of Operations(Figures in percentages denote the year-on-year change.)
Net salesYear ended March 31, 2020
Year ended March 31, 2019

Operating profit

Million yen%

Million yen

802,655
852,820

-5.9
-1.9

-645
-10,949

Profit (loss) per
share

–
–

Profit (loss)

Million yen%

Million yen

17,233
5,169

233.4
-83.5

-49,929-13,568%––

Diluted net
income per share

Yen

Year ended March 31, 2020
Year ended March 31, 2019

Ordinary profit%-381.29-103.61

Yen––(2) Non-Consolidated Financial Position
Total assets
As of March 31, 2020
As of March 31, 2019
(Reference) Shareholders’ equity:

Total net assets

Shareholders’equity ratio

Net assets per share

Million yen

Million yen%

Yen

1,281,542
1,269,756

378,690
463,86229.5
36.5

2,892.05
3,542.19

As of March 31, 2020: 378,690 million yen

As of March 31, 2019: 463,862 million yen* This financial results is not subject to an audit by certified public accountants or audit firms.
* Explanation about the proper use of financial forecasts and other special notes(Procedure for obtaining supplementary materials on financial results and financial briefing)
Mitsubishi Materials Corporation plans to hold an annual financial briefing for institutional investors on Wednesday, May 27, 2020.
Supplementary materials for the annual financial results used in the annual financial briefing is available on TDnet and MMC
website simultaneously with announcement of the annual financial results.

Contents

1. Overview of Operating Results and Financial Position ...................................................................... 2(1) Overview of Operating Results ............................................................................................................. 2(2) Overview of financial position .............................................................................................................. 6(3) Basic profit allocation policies and dividend payments for the current and next fiscal years ............... 6(4) Business and other risks ........................................................................................................................ 7
2. Management Policies ........................................................................................................................ 11(1) Basic Policy for the Group Management............................................................................................. 11(2) Target Management Indicators and Medium- to Long-term Management Strategy and Issues to Be
Addressed ............................................................................................................................................ 11
3. Basic Concept for Selection of Accounting Standards ...................................................................... 25
4. Consolidated Financial Statements and Key Notes ........................................................................... 26(1) Consolidated balance sheets ................................................................................................................ 26(2) Consolidated statements of profit or loss and consolidated statements of comprehensive income ..... 28
Consolidated statements of profit or loss ............................................................................................ 28
Consolidated statements of comprehensive income ........................................................................... 29(3) Consolidated statements of changes in net assets ................................................................................ 30(4) Consolidated statements of cash flows ................................................................................................ 32(5) Key notes related to consolidated financial statements ....................................................................... 34
Segment Information, etc. ................................................................................................................... 34
Per-share Information ......................................................................................................................... 39
Important Subsequent Events ............................................................................................................. 40–1–

1. Overview of Operating Results and Financial Position(1) Overview of Operating Results1) Overview of business results
Regarding the global economy during the consolidated fiscal year, in Asia, China experienced a continued
economic slowdown and a tendency toward deceleration in economic growth was also seen in Thailand andIndonesia.
In the United States, the economy continued steady improvement.
Regarding the Japanese economy during the consolidated fiscal year, despite the improvement in
employment and income conditions, exports and industrial production appeared to slow down.
Regarding the business environment for the Group, despite the declining demand in automotive andsemiconductor-related sectors, falling copper prices and weaker domestic demand for cement, theenvironment was impacted by an increase in the price of palladium.
Under these circumstances, in accordance with its Long-Term Management Policy for the next decade andMedium-Term Management Strategy (FY2018-2020) that focuses on the planning and implementation of
growth strategies, the Group had continued to implement various measures on the theme of “Transformation
for Growth” to achieve Group-wide Policies for the enhancement of corporate value, namely “optimizationof business portfolio,” “comprehensive efforts to increase business competitiveness,” and “creation of new
products and businesses.”
As a result, consolidated net sales for the consolidated fiscal year totaled ¥1,516.1 billion, decreased 8.8%
year-on-year. Consolidated operating profit totaled ¥37.952 billion, increased 3.0% year-on-year.
Consolidated ordinary profit decreased 2.1% year-on-year, to ¥49.610 billion. Mitsubishi Materials
Corporation (herein after “MMC”) recorded an impairment loss on fixed assets of ¥27,420 million, an
impairment loss on fixed assets of ¥20,351 million incurred by Mitsubishi Aluminum Co., Ltd., and ¥30,272
million as a provision for loss on business restructuring in the Sintered parts business, in addition torecording ¥10,423 million as a loss on the Antimonopoly Act incurred by Universal Can Corporation, a
consolidated subsidiary of MMC. As a result, loss attributable to owners of parent amounted to ¥72,850
million (profit attributable to owners of parent of ¥1,298 million for the previous fiscal year.)2) Overview by business segments
From this consolidated fiscal year, reporting segments have been changed, among other changes.
The details are set forth in “4. (5) Key notes related to consolidated financial statements (Segment
information)”.
In this regard, in the year-on-year comparison below, the numerical data for the previous fiscal year has been
reclassified to the according changed segments.
(Advanced Products)

Net sales
Operating profit
Ordinary profit

FY 2019
570.9
11.9
13.2

FY 2020
511.9
1.2
1.4

(Billion yen)
Increase / Decrease (%)-59.0(-10.3%)-10.7(-89.7%)-11.7(-88.7%)In the Copper & copper alloy products business, both net sales and operating profit decreased as a result of afall in sales of automobile and semiconductor-related products.
In the Electronics materials & components business, both net sales and operating profit decreased, reflecting
decline in sales of products such as advanced materials and electronic components, in addition to an increase–2–

in the production costs of polycrystalline silicon products.
In the Aluminum products business, both net sales and operating profit fell due to a decrease in sales ofregular cans and bottle cans for beverages and rolled and processed products such as extruded products forautomobiles and heat exchange sheet materials.
Consequently, net sales and operating profit for the entire Advanced Products decreased year-on-year.
Ordinary profit declined due to the decrease in operating profit.
(Metalworking Solutions Business)

Net sales
Operating profit
Ordinary profit

FY 2019
171.5
16.7
15.6

FY 2020
150.2
8.5
6.9

(Billion yen)
Increase / Decrease (%)-21.2(-12.4%)-8.2(-49.1%)-8.6(-55.4%)In the Cemented carbide products business, both net sales and operating profit decreased as a result of decline
in sales both in Japan and overseas, particularly in China.
In the Sintered products, etc. business, the decrease in shipping expenses, despite a fall in sales of mainstay
sintered parts, led to a reduction in operating loss.
Consequently, net sales and operating profit for the entire Metalworking Solutions Business decreased yearon-year. Ordinary profit declined due to the decrease in operating profit.
(Metals Business)

Net sales
Operating profit (loss)
Ordinary profit

FY 2019
720.0
-7.1
2.3

FY 2020
665.0
19.2
28.0

(Billion yen)
Increase / Decrease (%)-55.0(-7.6%)
-26.4
(–%)
-25.7
(–%)

In the Copper business, net sales fell but operating profit rose, mainly due to reduced cost of smelting despite
falling copper prices.
In the Gold and other valuable metals business, net sales declined due to decreased production volume of gold
and other valuable metals as a result of a fall in raw material content, but operating profit rose impacted by anincrease in the price of palladium.
As a result, the Metals Business overall recorded year-on-year an increase in operating profit, despite a decline
in net sales. Ordinary profit increased due to a higher operating profit.
(Cement Business)

Net sales
Operating profit
Ordinary profit

FY 2019
253.6
16.6
19.7

FY 2020
238.2
11.9
14.9

(Billion yen)
Increase / Decrease (%)-15.4(-6.1%)-4.6(-28.2%)-4.7(-24.1%)

In Japan, both net sales and operating profit decreased, reflecting lower sales volumes mainly due to thedecline in demand for road construction work related to the Tokyo Olympic and Paralympic Games in the–3–Tokyo metropolitan area, road construction work related to the Shin-Meishin Expressway in the Tokai area,
and construction work related to recovery efforts from the Great East Japan Earthquake in the Tohoku area.
Overseas, the cost of raw materials and operating expenses such as personnel expenses increased despite arise in the volume of ready-mixed concrete sold in the United States. In the Coal business of Australia, coalsales prices fell. As a result, operating profit decreased while net sales increased.
Consequently, both net sales and operating profit for the entire Cement Business decreased year-on-year.
Ordinary profit declined due to the decrease in operating profit.
(Other Businesses)

Net sales
Operating profit
Ordinary profit

FY 2019
194.7
10.0
10.3

FY 2020
187.3
8.3
9.8

(Billion yen)
Increase / Decrease (%)-7.4(-3.8%)-1.6(-16.4%)-0.5(-5.5%)In the Energy-related business, net sales and operating profit increased, reflecting higher sales in nuclearenergy-related services.
In the Environmental recycling business, while net sales increased reflecting higher processing volume ofhome appliance recycling, losses grew due to a rise in operating expenses in addition to decline in the unit
sales price of valuables.
In the Other Businesses, excluding the Energy-related business and the Environmental recycling business, net
sales and operating profit decreased.
In the Other Businesses overall, both net sales and operating profit decreased year-on-year. Ordinary profit
declined due to the decrease in operating profit.
3) Impact of the global spread of COVID-19
Currently, COVID-19 has become the pandemic and although each country has different situations, eachgovernment has taken infection prevention policy measures whereas activities of companies and consumers
are restricted. In the event that the infection continues to spread, stagnation of Japanese and global economies
may become serious.
The Group has responded to COVID-19 in accordance with the policies of each government. As of the end of
the current fiscal year, there had been no significant impact on the Group’s sales and production activities in
its major domestic and overseas business locations except for temporary suspension of operation due tolockdown in certain overseas sites. The supply chain such as procurement of copper ore and raw materials,
manufacturing and shipment of products, and distribution also has not suffered any significant impact.
The Group established a “Novel Coronavirus Response Headquarters (hereinafter the “Response
Headquarters”) in January 2020 to deal with COVID-19. The Response Headquarters made “Group response
policy” and “Guideline for prevention measures” depending on the situation of the pandemic and reviews
them according to a change of situation from time to time while centrally collecting the information andmonitoring the health conditions of employees of the Group’s domestic and overseas business locations, thesituations, policies and regulations of each country and region, the impact on the business locations and theimpact on the supply chain under policies 1) Give top priority to the health and safety of employees andmake every effort to prevent infection and spread, and 2)Respond to requests of society and customer bycontinuing production and supply of products and recycling business that support social infrastructure
The Group’s domestic and overseas business locations are responding with the situation in accordance withthese Group’s uniform policy.

–4–There is a concern that the impact of COVID-19 on the Group’s businesses will become more serious due toa decrease in demands for the Group’s business deeply related automobiles, semiconductors, constructions,etc. in Japan and overseas.
In order to minimize the potential adverse impact on the Group performance, MMC will implement securingliquidity at hand and fund-raising capacity, etc. and securing production system in preparation for demand
recovery after COVID-19 calms down. In anticipation of a change of business environment in the mediumand long-term, the Group will consider a new work style through remote work and rotation work system,
promote improving of management speed by digital transformation, or work on rebuilding the businessmodel accompanying changes in the business environment.
4) Outlook for the fiscal year ending March 31, 2021
The earnings forecasts for the next fiscal year has not been determined yet since the future economic
activities and trends in the demand for major products are extremely uncertain due to the global spread of
COVID-19 and reasonable estimates are difficult at the moment. MMC will announce the forecasts as soon
as reasonable estimates are possible.

–5–(2) Overview of financial position
Total assets at the end of the consolidated fiscal year stood at ¥1,904.0 billion, down ¥34.2 billion from the endof the previous consolidated fiscal year. This was mainly due to a decrease in investment securities.
Total liabilities were ¥1,318.0 billion, an increase of ¥103.0 billion from the end of the previous consolidated
fiscal year. This was mainly due to an increase in commercial papers.
The cash flows during the consolidated fiscal year and their causes are as follows.
(Cash flows from operating activities)
Although losses before income taxes were recorded, net cash provided by operating activities stood at ¥67.5
billion (a decrease in net cash provided of ¥72.6 billion year-on-year) as a result of mainly adding depreciationand impairment loss, which were non-cash item.
(Cash flows from investing activities)
Net cash used in investing activities amounted to ¥66.8 billion (a decrease in net cash used of ¥19.3 billion yearon-year) mainly due to outlays related to capital expenditure.
(Cash flows from financing activities)
Net cash provided by financing activities amounted to ¥28.8 billion (an increase in net cash provided of ¥76.4
billion year-on-year) mainly due to issuing commercial papers.
After factoring in the impact of exchange rate fluctuation, cash and cash equivalents at the end of the fiscal year
stood at ¥127.2 billion (down ¥27.6 billion from the end of the previous fiscal year).
Below is a summary of the Group’s major cash flow indicators.
FY2016FY2017FY2018FY2019FY2020Shareholders’ equity ratio (%)

31.0

32.8

33.9

32.7

26.6

Shareholders’ equity ratio on amarket-value basis (%)

23.2

23.3

20.8

19.7

15.2

Ratio of interest-bearing debt tocash flow

4.6

4.7

10.6

3.7

8.6

Interest coverage ratio

16.5

23.3

10.0

28.9

13.9

Shareholders’ equity ratio:
Shareholders’ equity / Total assets
Shareholders’ equity ratio on a market-value basis: Market capitalization / Total assets
Ratio of interest-bearing debt to cash flow:
Interest-bearing debt / Cash flow
Interest coverage ratio:
Cash flow / Interest payments(Note 1) All indicators are calculated on a consolidated basis.
(Note 2) Market capitalization is based on the year-end share price multiplied by the number of shares issued
and outstanding at year-end (after deducting treasury shares).
(Note 3) Cash flow is based on the cash flows from operating activities in the Consolidated Statements ofCash Flows.
(Note 4) Interest-bearing debt covers all interest-bearing debt in the Consolidated Balance Sheets. Interest
payments are based on the amounts shown in the Consolidated Statements of Cash Flows.

(3) Basic profit allocation policies and dividend payments for the current and next fiscal years
MMC makes cash dividends based on the resolutions of the Board of Directors meetings in accordance with its
Articles of Incorporation.
MMC regards the distribution of profits to shareholders as one of its most important management objectives.
Accordingly, the policy is to make decisions on profit allocation based on comprehensive assessment ofconcerned factors, which include earnings for the period, internal reserves, and financial standing.

–6–With regard to profit allocation during the period under the Medium-term Management Strategy covering
FY2018 to FY2020, the amount of annual dividends is set at ¥80 per share in order to ensure stable dividends
even when MMC’s consolidated business results fluctuate. In the event that its consolidated payout ratio goes
below 25%, MMC has adopted a policy to temporary raise the dividends to make it reach 25% or to conduct
share buybacks.
Based on this policy, MMC made the decision to distribute the year-end dividend of ¥40 in accordance with aresolution made at the Board of Directors meeting held on May 27, 2020. As a result, the dividend for the
fiscal year is set at ¥80 per share (same as that for the previous fiscal year) when combined with the interim
dividend of ¥40 per share.
As stated in “1. Overview of Operating Results and Financial Position, (1) Overview of operating results, 4)Outlook for the fiscal year ending March 31, 2021”, the dividends for the next fiscal year have not been
determined yet since reasonable estimates for the performance of the next fiscal year are difficult.

(4) Business and other risks
Since the Group conducts a wide range of businesses as stated in “4. (5) Key notes related to consolidated
financial statements (segment information)”, its business results and financial position are affected by various
factors including domestic and foreign politics, economies, climates, market conditions, exchange rate, andlaws and regulations. Below are the risks that the management recognizes as the major factors which may havea substantial impact on the Group’s business results and financial position.
For such risks, the Group has (1) established an “internal control system”, (2) appointed officers who share risk
management from the executive officers, (3) integratedly controlled the risk management as a substantial
governance matter in the Sustainable Management Office, the governance council, the board of executive
officers and the Board of Directors, and (4) discussed, made decisions on, and monitored Group-wide Policy
and plans for significant risks.
Under the system above, the Group recognizes and assesses each risk including significant risks, and decides toavoid, reduce, transfer or possess such risks. In the event that such cases occur, the Group strives to minimize
any impact.
The following is not an exhaustive list of risks which may affect the Group. Also, since it is difficult toreasonably estimate the possibility and timing of these risks occurring, any potential quantitative impact fromthese risks on the Group’s operating results are not provided. Although the matters listed in this section containitems related to the future, these items are based on a judgement as of May 27, 2020.
1) Business restructuring
The Group has set “optimization of business portfolio” as one of the Group-wide Policies in the new
Medium-term Management Strategy covering the period from FY2021 to FY2023, and seeks to focus on
businesses that are consistent with its vision and mission, businesses that are governable by the Group,businesses that are capable of earning a leadership role in a specific region or the world, and businesses thatcan deliver stable returns over capital costs on a medium- to long-term basis as the businesses the Groupshould have the ownership of, and will decide the direction of businesses based on profitability and growthpotential to create the portfolio. As a result, this may affect the Group’s business results and financial
position. Note that MMC signed a letter of intent with Ube Industries, Ltd. on February 12, 2020 to integrate
the Cement Business and any related businesses from both companies by April 2022. In addition, MMC has
acquired 100% of MOLDINO Tool Engineering, Ltd. (the company name was changed from Mitsubishi
Hitachi Tool Engineering, Ltd.) on April 1, 2020.

–7–

2) Market and customer trends
The Group provides products and services to various markets. As such, sales may be affected by a change in
the global economic situation, a rapid change in customers’ markets, a change in customers’ market shares, ora change of customers’ business strategy or product lineup. In particular, automobile and IT industries arefacing intense price competition and a race for technological development. Although the Group has madeevery effort to reduce costs and develop new products and technologies, the Group’s business results andfinancial position may be affected if it fails to accurately correspond with changes in industries andcustomers’ markets.
3) Fluctuation in nonferrous metal market and exchange rates, etc.
In the Metals Business, foreign-currency dividends from invested mines, which are a major source of profit,and smelting costs are affected by fluctuations in the nonferrous metal market and exchange rates or purchaseconditions of ore. Recoverability of loan and feasibility of guaranteed liabilities concerning the invested minedepend on the cash flow from the corresponding mine, which may be affected by the nonferrous metal
market. Note that for inventories, raw material costs are at risk of a fluctuating nonferrous metal market andexchange rates during the period from procurement of ore to production and sale of unprocessed metal. In
addition, raw materials for nonferrous metals in the Aluminum business and the Metalworking Solutions
Business, and coal in the Cement Business are international commodities. Procurement prices of these raw
materials and raw fuel are affected by fluctuations in the markets of nonferrous metal and coal, exchange
rates, and ocean freight.
4) Trends in semiconductor market conditions
The Group supplies the semiconductor industry with electronics materials and polycrystalline silicon. The
trends in the semiconductor market conditions may affect the Group’s business results and financial position.
5) Interest-bearing debt
In the fiscal year ended March 31, 2020, the Group’s interest-bearing debt amounted to 547.6 billion yen(total of short-term borrowings, commercial papers, bonds payable and long-term borrowings, which apply
hereinafter unless otherwise specified) and represents 28.8% as a ratio to total assets. Despite the efforts toimprove the Group’s financial standing through inventories reduction and asset sales and so on, a rise infunding costs caused by a change in the financial situation may affect the Group’s business results andfinancial position.
6) Guaranty of liabilities
In the fiscal year ended March 31, 2020, the Group has undertaken ¥18.0 billion guaranty of liabilities
against monetary obligations of unconsolidated affiliated companies. In the event that the fulfillment of suchguaranties of liabilities is requested in the future, the Group’s business results and financial position may beaffected.
7) Fluctuations of the market value of assets
Losses resulted from fluctuating market values of held securities, land, and other assets may affect theGroup’s business results and financial position.
8) Retirement benefit expenses and obligations
Employees’ retirement benefit expenses and obligations are calculated based mainly on actuarial
assumptions. These assumptions are based on average remaining service years of employees and the longterm yield of Japanese government bonds as well as investment performance of pension assets including–8–

entrusted shares. However, lower discount rates or losses in the investment of pension assets may affect theGroup’s future expenses and liabilities recorded.
9) Environmental risks and countermeasures
In the event that pollution of air, water or soil from leaking hazardous substances or inappropriate treatmentof waste occurs in the Group’s domestic or overseas businesses, the Group’s business activities would beseriously impacted and additional costs may be generated and affect the Group’s business results andfinancial position. In order to prevent environmental risks from occurring, the Group strives to prevent
pollution of air, water and soil and to appropriately manage waste pursuant to environmental laws. The Groupalso assesses risks concerning business activities, substances handled, and location requirements based on theenvironmental policy, and identify and take any necessary countermeasures against environmental risks.
10) Overseas operations, etc.
The Group has production and sales bases in 30 countries and regions globally and overseas sales account for
44.4% of consolidated net sales. However, the Group’s business results and financial position may beaffected by the politics and economic situations of each country and exchange rates, as well as changes intrade and commercial regulations, mining policies, environmental regulations, tax systems, other unforeseenchanges of laws and regulations, and any differences in their interpretations or changes of management
policies of local partners.
11) Intellectual property rights
The Group recognizes the importance of intellectual property rights and seeks to protect them. In the eventthat protection is not sufficient or illegal infringement occurs, the Group’s business results and financial
position may be affected. While MMC pays close attention to other companies’ intellectual property rights, if
MMC is found to infringe other companies’ intellectual property rights and becomes liable for damages, theGroup’s business results and financial position may be affected.
12) Product quality
Despite the Group’s efforts to improve quality control systems to provide high quality products, if
unexpected compensation for damages arises with respect to the products manufactured and sold in the pastor if a new material quality issue arises and results in lower credibility affecting sales activity, and if costs for
improving and enhancing the quality control system and compensation costs occur, the Group’s businessresults and financial position may be affected.
13) Occupational health and safety, equipment accidents, etc.
The Group seeks to ensure prevention of occupational accidents and incidents involving production
machinery, with managerial aspects that include occupational health and safety and disaster prevention andsecurity, in addition to tangible approaches such as operational and maintenance management and improving
the safety of the equipment. In the event of a major work-related accident or accident involving equipment,
the Group’s business results and financial position may be affected.
14) Information management
The Group ensures strict management of information including handling of personal information. In theevent of information leakage, a loss of social credibility may affect the Group’s business results and financial
position.
15) Lawsuits, etc.

–9–

Rulings, settlements, or decisions related to lawsuits, disputes, or other legal proceedings to which the Group
is currently or will be a party to concerning current or past business in Japan or a foreign country may affect
the Group’s business results and financial position. In order to prevent becoming involved in a lawsuit, theGroup ensures compliance with laws and regulations as well as making efforts to hold sufficient discussions
with the other parties of any transactions to agree and enter into a written contract. In the event that any
major lawsuit is filed which may affect the Group’s business results and financial position, the concerning
department within MMC will make a report to the Board of Directors and its legal department carefully andrapidly corresponds in collaboration with the concerning department and attorneys, etc.
16) Procurement of electricity
Increases in electricity prices mainly due to a rise in costs to import fossil fuels and an increase in taxes
imposed on renewable energy associated with the suspension of nuclear power plants may affect the Group’sbusiness results and financial position.
17) Business results of Diamet Corporation
Diamet Corporation, a consolidated subsidiary under MMC, continues to record operating losses andimpairment losses on fixed assets, and is in a state of excess liabilities. While MMC is financing Diamet
Corporation to continue its business, their continued poor performance may affect the Group’s businessresults and financial position.
18) Climate change
Physical risk and transition risk associated with climate change may affect the Group’s business results andfinancial position. Physical risks including damage caused by abnormal weather (such as storms, floods or
droughts) may adversely affect the Group’s business activities. If regulations regarding greenhouse gas
emission are reinforced, it may create a financial risk in all MMC businesses. In particular, the Cement
Business emits carbon dioxide through thermal decomposition of limestone, a principal raw material, in
addition to carbon dioxide emission from energy sources. Therefore, these impacts to concerning finances are
considered significant. MMC supported recommendations of the TCFD in March 2020 and will actively
disclose information in an integrated report pursuant to the proposal.
19) Infection (COVID-19)
Although MMC gives top priority to employee health and strives to prevent infection and spread of the
COVID-19 in order to avoid an adverse effect on business activities, the Group’s business results andfinancial position may be affected by restrictions on plant operation and business activities due to an increase
in infected areas and infected persons as well as by declining demand associated with stagnation of the global
economy.
20) Other matters
In addition to the above, changes in trade practices, natural disasters such as earthquakes, and unforeseen
circumstances including acts of terrorism, war, or an pandemic may also affect the Group’s business results
and financial position.

– 10 –

2. Management Policies(1) Basic Policy for the Group Management
Based on its corporate philosophy of “For People, Society and the Earth”, the Group’s vision is “We will
become the leading business group committed to creating a sustainable society through materials innovation,with use of our unique and distinctive technologies, for People, Society and the Earth”.

(2) Target Management Indicators and Medium- to Long-term Management Strategy and Issues
to Be Addressed
The Group has a target to achieve and take various measures of the medium- and long-term goals of the Group
from 2030 to 2050, the “Mission”, the Medium-term Management Strategy from FY2021 to FY2023(hereinafter “FY2023 Strategy”), "Measures to Enhance the Group Governance Framework Including Quality
Control", and "Measures to Strengthen the Antimonopoly Act Compliance System".
1) Group-wide issues
1.1) Mission (Long-term Management Policy)
Based on its corporate philosophy of “For People, Society and the Earth”, the Group’s vision is “We will
become the leading business group committed to creating a sustainable society through materials innovation,with use of our unique and distinctive technologies, for People, Society and the Earth”.
In formulating the FY2023 Strategy, from the perspective of creating both social and economic values, theGroup has set out on a new “Mission” as shown below in order to implement corporate philosophy andvision as medium- and long-term targets from 2030 to 2050.
Contribute to build a prosperous society by providing nonferrous metal materials, predominantly copper, andhigh value-added functional materials and products.
Contribute to build a recycling-oriented society by providing recyclable products and advanced technologybased waste recycling.
Contribute to build a decarbonized society by developing and promoting the use of renewable energies suchas geothermal energy, and ensuring to consider the reduction of environmental impact in manufacturing.

– 11 –

1.2) Overall Picture of Value Creation (Value Creation Process)Based on the idea to “create both social and economic values", the Group has been implementing the creationof economic value by solving social issues and creating social value through its business.
From this perspective, the information (management philosophy, business model, strategy, governance, etc.)that should be communicated to stakeholders is organized in a systematic and integrated way as shown in the[Value Creation Process] below.
[Value Creation Process]The social issues that the Group should solve and related SDGs (a, b) and the key issues (c) that the Group
recognizes are listed to the left. The pink circle in the center indicates the business activities of the Group
itself.
The four items on the left side of the circle in the center indicate the strengths of the Group (d).
By utilizing our strengths, the Group aims to generate the “outputs” as described on the right, under theGroup-wide Policy (e) located at the top in the middle. These will be supplemented with long-term businessgoals and a long-term strategy for each business (f) or a Medium-term Management Strategy (g).
“Outputs” indicate products & services that the Group creates and contributes to the society through thosebusiness activities.
This indicates the overall picture of value creation of the Group which leads to the value that the Group
provides and leads to the Mission.
Details of the individual elements (a) to (g) are as described in (1.3) and (1.4) below.
1.3) Individual elements of the value creation process<a. Social issues to be solved by the Group and SDGs>
The social issues to be solved are extremely extensive and various proposals have been made.
Within the proposals, MMC has selected the following as social issues that are closely related to the Group’sbusiness and in which the Group can contribute.

– 12 –

・Advancing mobility
・Advancement and diversification of digital devices
・Automation of production and business processes
・Longer lifespans of people and buildings
・Effective measures against disasters
・Efficient treatment of urban waste
・Efficient use of mineral resources and alternative substances・Efficient use of energy resources
・Development of renewable and unutilized energies
・CO2 emissions reduction< b. SDGs>
The SDGs (Sustainable Development Goals) adopted by the United Nations in September 2015 can also be
regarded as social issues to be solved.
MMC has selected 7, 8, 9, 11, 12, and 13 as the main items the Group can contribute through the businessesof the Group.
・1 (Poverty) No Poverty
・2 (Hunger) Zero Hunger
・3 (Health) Good Health and Well-Being
・4 (Education) Quality Education
・5 (Gender) Gender Equality
・6 (Water and Sanitation) Clean Water and Sanitation
・7 (Energy) Affordable and Clean Energy
・8 (Growth and Work) Decent Work and Economic Growth・9 (Innovation) Industry, Innovation and Infrastructure
・10 (Inequalities) Reduced Inequalities
・11 (Cities) Sustainable Cities and Communities
・12 (Production and Consumption) Responsible Consumption and Production
・13 (Climate Change) Climate Action
・14 (Marina Resources) Life below Water
・15 (Land Resources) Life on Land・16 (Peace) Peace, Justice and Strong Institutions
・17 (Implementation) Partnerships for the Goals<c. Materiality>
The Group summarizes the social issues that the Group should solve and related SDGs as four issues whichhave high importance to both stakeholders (shareholders, investors, employees, business partners, creditors,
local communities, etc.) and the Group. In addition, the Group also considers challenges in our managementbase and strengthening the foundation of the Group as materiality.
<Social Issues>
・Stable supply of product/material
・Creation of a recycling-oriented society
・Dealing with climate change
・Environment protection and environmental technologies<Strengthening of the Management Base and Core>・Occupational Health and Safety– 13 –

・Governance・Development of diverse talents
・Responsibility in value chain
・Stakeholder communication
・Digital transformation<d. Our Strengths>
・An Advanced recycling technology and business platform
The recycling business can be promoted by diverse and advanced recycling technology accumulated mainlyin the Metals, Cement and Environmental recycling business, by a wide range of business experience, and bya unique waste collection network and business platform.
・Value chain from raw materials to products with a stable supply
With a consistent production system from stable procurement of raw material resources to products, highquality products can be stably supplied to the market.
・Unique material development and manufacturing technology
As represented by the oxygen-free copper and copper alloy (the Copper & copper alloy business), joining
dissimilar materials (the Electronic materials & components business), cemented carbide materials andcoating (the Metalworking Solutions Business), our manufacturing technology and materials development is
supported by atomic level analysis and simulation technologies. These items are sources of the MMC's
competitiveness.
・A team that can unite to resolve issues
By respecting diverse personalities, values, and honesty, MMC can unite individual power and work together
to solve issues.
<e. Group-wide Policy>
・Optimization of business portfolio
MMC will focus on following businesses that MMC should take an ownership of: businesses that areconsistent with its vision and mission, businesses that are governable by the MMC Group, businesses that arecapable of earning a leadership role in a specific region or the world, and businesses that can deliver stable
returns over capital costs on a medium- to long-term basis. In addition, MMC will build a business portfoliowith two axes of profitability and growth potential to determine the direction of each business, and aim to
optimize the portfolio.
・Comprehensive efforts to increase business competitiveness
MMC will make comprehensive efforts through our manufacturing excellence strategy, quality management
strategy, digital transformation strategy, and business competitiveness.
As to manufacturing excellence strategy, each site draws a vision based on the business strategy, and aims toraise their manufacturing capabilities to the next level by enhancing the production process.
As to quality management strategy, MMC aims to achieve “proactive quality” by not allowing nonconforming products through optimizing the product/process design and equipment maintenance plan.
As to digital transformation strategy, MMC will strengthen customer contact points and promote data sharing
to improve business added-value and operational competitiveness.
In the next 5 years, MMC will invest approximately ¥30 billion and allocate 100 digital professionals.
・Creation of new products and businesses
In order to create new businesses that will become future revenue bases, the Group addresses the following asimportant social needs. "Next-generation vehicles", "IoT/AI", "urban mines" and "clean energy and– 14 –

decarbonization". The Group will create and grow new products and businesses that are the core ofsustainability.
1.4) FY2023 Strategy<Financial Plan>
・Financial indicators and goals
FY2023 Strategy emphasizes medium- to long-term profitability and growth potential. For each business, theprofitability will be mainly evaluated with ROIC and the growth potential will be evaluated by EBITDA
growth rate, etc.
ROA is used complementarily in process-type businesses. ROIC/ROE/ROA are used together as group-wide
financial indicators.
The Group-wide financial target of FY2023 is ROIC 6.0%, ROA 4.0%, ROE 7.0%, consolidated operating
profit of ¥58 billion, consolidated ordinary profit of ¥75 billion, and net D/E ratio 1.0 times or less.
・Investment Policy
The total amount of investment for the FY2023 Strategy period is expected to amount to ¥360 billion, ¥190
billion of which is for growth strategy investment and ¥170 billion for investment for maintenance andupgrading. MMC will make investments using cash flows from operations, proceeds from businessrestructuring and asset sales.
However, in addition to this, if there are other attractive large-scale investment projects for growth,
investments will be made proactively as longs as a net D/E ratio of 1.0 times or less is maintained.
・Shareholder Return Policy
MMC recognizes that returning profits to shareholders is one of the most important objectives ofmanagement. Considering profit allocation, the Group makes decisions based on comprehensive assessmentof concerned factors, which include earnings for the period, internal reserves, and financial standing.
For profit allocation during FY2023 Strategy period, MMC places importance on distributing stabledividends even when MMC’s consolidated business results fluctuates. The annual dividends from FY2021 to
FY2023 will be ¥80 per share.
However, in the case that the consolidated payout ratio becomes less than 25%, MMC plans to temporarily
increase the dividend or conduct share buybacks.
Although, the shareholder return policy and the financial plan, which is the assumption for the policy,
described in this section are as announced on March 25, 2020 and do not take into account the impact of the
global spread of COVID-19 beyond that date.
There is a concern that the impact of COVID-19 on the Group’s businesses will be more serious due todeclining domestic and global demands caused by COVID-19 for automobiles, semiconductors andconstruction which have a deep connection with the Group’s businesses. However, since reasonable estimates
are difficult at the moment, as stated in “1. Overview of Operating Results and Financial Position, (1)Overview of Operating Result, 4) Outlook for the fiscal year ending March 31, 2021”, the business outlook
for the fiscal year ending March 31, 2021 has not been determined yet. Also, as stated in “1. Overview ofOperating Results and Financial Position, (3) Basic profit allocation policies and dividend payments for thecurrent and next fiscal years”, the dividends for the fiscal year ending March 31, 2021 have not been
determined yet.
In addition, MMC will carefully examine the Medium-term Management Strategy including the financial
plan with the shareholder return policy based on further changes in the business environment caused by
COVID-19 and its impact on the medium- to long-term business outlook. MMC will promptly announce anychanges in its content if it is deemed necessary.

– 15 –

・Regarding Strategic Holdings
MMC has a policy of not acquiring or holding shares (strategic holdings) other than purely for investment
purposes, except when it is required for their business strategy.

– 16 –

<f. Long-term Business Goals and Long-term Strategy for each business / g. FY2023 Strategy>・Advanced Products
Long-term business goals

Global First SupplierLong-term strategy

・Create new businesses and products through the sophistication andintegration of our core competencies (e.g. production and development ofoxygen-free copper, oxygen-free copper base alloys, and functional
materials as well as technical capabilities such as bonding different materials
bonding different metals, etc.)
・Accelerate marketing activities to replicate successful practiceSpecific measures of the
FY2023 Strategy

・Assign key account managers acting cross-sectionally・Enhance information analysis by digital marketing such as theemployment of AI or IoT・Share product roadmaps with customers (co-creation capabilities)
・Develop new products through collaboration with Central ResearchInstitute・Fortify production capabilities such as establishing a mass production
system and improving productivity, etc.)
・Pursue opportunities to execute M&A or business alliances

・Metalworking Solutions BusinessLong-term business goals

Top 3 supplier in strategic markets

Long-term strategy

・Promote clean manufacturing
・Provide high-efficiency products with advanced technology
・Expand advanced metal powder business in electronic devices

Specific measures of the
FY2023 Strategy

・Increase recycling rate in our tool recovery system and utilize renewableenergy・Provide high efficiency tools and digital solutions
・Transition to smart factory and optimization of logistics and supply
chain・Expand advanced metal powder business to rechargeable battery market

・Metals BusinessLong-term business goals

Leader in environmentally-friendly mining & smelting businessLong-term strategy

Stable supply and recycling of nonferrous metals, predominantly copper・Creation of a sustainable raw material portfolio consisting of clean copper
concentrate and E-Scrap
・Promotion of recycling
・Response to climate change

Specific measures of the
FY2023 Strategy

・Secure clean copper concentrate by investing in new mines
・Development impurity removal technology in copper concentrate
・Optimize valuable metal material flow
・Reduce fossil fuels– 17 –

・Cement BusinessLong-term business goals

Leader in the domestic and international cement industry with advanced
environmental technologies

Long-term strategy

・Stable supply of basic building materials for social infrastructure anddisaster prevention infrastructure
・Sophistication of waste disposal
・Response to climate change by reducing CO2
・Construction of a resilient domestic business foundation through businessrestructuring and growth in overseas markets

Specific measures of the
FY2023 Strategy

・Improve and optimize production system through domestic businessrestructuring
・Expand capabilities in waste plastics processing and installation ofchlorine dust cleaning equipment
・Introduce low-temperature burning technology and develop CO2
reduction, capture, and recycling technologies
・Expansion of US businesses and development of new overseas bases

・Environment & Energy BusinessLong-term business goals(Environmental recycling) Driving force of resource-recycling systems(Renewable energy) Leading company in geothermal development

Long-term strategy

・Provision of a safe recycling system with thorough traceability, etc.
・Decarbonization by expanding renewable energy businessSpecific measures of the
FY2023 Strategy

・Expand Home appliance recycling business, advancement of automation,and improvement of added value of recovered products・Demonstrate LiB recycling technologies and solar panel recycling
technology
・Secure stable plant operations in Fly ash recycling business andbiogasification business・Complete Komatagawa new hydroelectric power plant, construction ofAppi geothermal power plant, and survey of new geothermal sites– 18 –

・Corporate division’s strategy
The following are the key corporate division’s strategies for support each business strategy in the FY2023
Strategy.
R&D and marketingstrategy

By focusing on changes in the external environment such as megatrends,
etc., MMC Group will create high value-added products and services mainly
in IoT and AI, next-generation vehicles, urban mines, and clean energy anddecarbonization areas to meet customer needs based on its integratedfunctions, material composite, infrastructure and mass production, andrecycling technologies.

Manufacturing excellence
strategy

By formulating and realizing the factory vision based on the businessstrategy, as well as enhancing the production process, and proactively
utilizing external knowledge, MMC Group will raise its manufacturing
capability to the next level.

Quality management
strategy

By optimizing its product/process design and equipment maintenance plan,
MMC Group will implement proactive quality management to ensure that
non-conforming products are not produced.

Digital transformation
strategy

MMC Group will use Digital Transformation to strengthen our three key
pillars: “Business added-value”, “Business operations competitiveness”, and“Management speed”. In the next five years, MMC will invest
approximately ¥30 billion and allocate 100 digital professionals.

– 19 –

・Governance
The following are main measures for the Group’s governance in FY2023 Strategy.
Strengthening corporate
governance

In June of 2019, MMC transitioned to a company with a nominationcommittee, etc., and is working on the following measures
・Continuous improvement of the functions of the Board of Directors
・Formulation of basic corporate governance policy (effective April 1,
2020)
・CEO appointment and dismissal, planning and execution of successor
development plan
・Review of executive remuneration system
・Enhancement of governance of subsidiaries

Strengthening group
governance

The Group will implement the following measures to establish a governancesystem in which communications can be carried out smoothly andautonomously between the parent and its subsidiaries, between the head
office and its respective bases, and among respective bases and the Group
companies.
・Evaluation of effectiveness and improvement of the Board of Directors of
the Group companies
・Group companies’ officer training
・Enhancement of governance audits
・Prompt decision making by delegating authority and strengthening
supervisory functions
・Promotion of business operations with an awareness of differing
managements in R&D, manufacturing, and human resources exchange
・Accelerated strategy execution by Digital Transformation Management
OfficeHR strategy

The Group will work on the following measures with the aim of securing
and fostering adaptive human resources and forging a healthy organizational
culture.
・(Talent) Secure and develop human resources
・(Organizational culture) Enhance motivation and management capabilitiesof the Group companies
・(Improvement of social value) Engage in the employment of diverse
talents and health & productivity management

Change of organizations(Business Divisions)・Promotion of Environment & Energy Business Division to in-house
Company・Separation of Aluminum Division from Advanced Products Company(Corporate Division)
・Establishment of Marketing Department
・Establishment of Corporate Communications Department(Company-wide organization)
・Establishment of Digital Transformation Management Office・Establishment of Sustainable Management Office– 20 –

2) Measures for strengthening the Group governance system including quality control
Concerning some of the products manufactured and sold in the past, in light of incidents where someproducts delivered had deviated from customer standards or internal company specifications due tomisconduct, including the rewriting of inspection records data and insufficient testing, MMC and the Grouphas been working on various measures (the “Measures”) since December of 2017 to enhance the Group
governance system framework including quality control in order to prevent such incidences.
In addition, the “Committee for Monitoring of Measures to Enhance Governance” (the “Committee for
Monitoring”) was established on May 10, 2018, for the purpose of supervising the progress of the Measures
etc., from an independent perspective separated from business execution.
As MMC and the Group have been implementing the Measures as planned, and as MMC currently has an
outlook for the future that each site will be able to continue autonomous work on strengthening quality
control and governance, we dissolved the Committee for Monitoring on May 13, 2020.
After the dissolution of the Committee for Monitoring, we will supervise and promote actions related togroup governance including quality control at the “Sustainable Management Office” established on April 1,
2020. While doing so, we will continue to discuss and confirm the progress of our action plans for enhancing
the governance at the “Meeting of the Governance Deliberative Council” which has been held regularly sinceApril 2018.
In accordance with the policy established by the Sustainable Management Office and so on and thegovernance plan approved by the Meeting of the Governance Deliberative Council, each site of MMC andthe Group will autonomously promote actions to strengthen governance while the corporate division supports
such actions of each site. In addition, the Sustainable Management Office will report to the Board of
Directors on the status of our efforts to enhance governance and monitor them regularly.
MMC and the Group will endeavor to further improve group governance, including quality control of MMC
and the Group, in order to prevent such situations in the future.
3) Measures to reinforce the Antimonopoly Act compliance framework
In September 2019, Universal Can Corporation, a consolidated subsidiary of MMC, received a cease anddesist order and an order for surcharge payment from the Japan Fair Trade Commission (hereinafter “JFTC”)
for violating the Antimonopoly Act concerning transactions of aluminum beverage cans before March 31,
2016.
MMC sincerely apologizes to shareholders for any and all inconvenience and concerns this has caused.
MMC and the Group understand the gravity of this issue and will continue to reinforce the Antimonopoly Act
compliance framework to prevent these kind of situations in the future and sequentially have formulated andimplementd measures such as clarification of rules by enacting regulations, continuous enhancement ofeducation and enlightenment, and strengthening the auditing framework.

– 21 –

<Issues in each business>● Advanced Products
Demand of automotive and semiconductor-related sectors, which are the main markets for advanced
products, is expected to increase over the medium- to long-term due to the spread of next-generation vehicles
and high-capacity communications.
However, due to the global spread of COVID-19, there is a concern over declining demand in automotive andsemiconductor-related products. The Group will keep a close watch on economic conditions and the market
environment.
Under these circumstances, regarding copper and copper alloy products, MMC conducted an absorption-typemerger of Mitsubishi Shindoh Co., Ltd., on April 1, 2020.
While maximizing the effect of the merger with the company, the Group will strengthen marketing, R&D,
and sales systems, and expand production capacity to provide high-value-added products through integrated
development manufacturing and sales, in addition to enhancing profitability.
For electronics materials & components, the Group aims to become a highly profitable business entity thatsustains growth potential by providing products with high added-value through material technology to highgrowth industries such as next-generation vehicles, semiconductors, and electronics.
For polycrystalline silicon, the business environment is expected to remain difficult. However, the Group willreinforce profitability by securing safe and stable operation, quality improvement, and cost reduction.
● Metalworking Solutions Business
The market environment for cemented carbide products is expected to have increased demand over the
medium- to long-term in the aircraft and medical fields.
However, due to the global spread of COVID-19, in addition to decline in demand reflecting the economic
slowdown in Japan and in major overseas countries. There are concerns over a sourcing risk of raw materials
and a slowdown of production activities by customers, etc. Therefore, MMC will keep a close watch on
economic conditions and the market environment.
Under these circumstances, while MMC will continue to work on strengthening sales activities to theautomotive industry, which is a major customer, MMC will prioritize the investment of our management
resources in the aerospace industries and medical industries, which are expected to grow over the medium- tolong-term, and seek to strengthen development, manufacturing, and sales functions.
Regarding cutting tools, under the two brands DIAEDGE (Mitsubishi Materials Corporation) and
MOLDINO (MOLDINO Tool Engineering, Ltd.), while utilizing the technology sites (technical center)established in key regions of the world, MMC will work on providing customer-oriented solutions that willbuild customer trust as a true partner. Regarding the sourcing of key materials, tungsten and cobalt, MMC
will continue working to reduce sourcing risks and sourcing costs by improving the amount of tungsten
recycled and diversifying procurement sources. In addition, MMC will utilize mineral resources efficiently inorder to contribute to build a recycling-oriented society.
Turning to sintered products, etc., in order to increase earnings of this business, MMC will work to enhancequality and productivity by introducing automated inspection equipment to save labor and implementing
measures to improve yield ratio. In addition, Diamet Corporation, which manufactures and sells sinteredparts, has continuously recorded operating losses and impairment losses on fixed assets, and is in a state ofexcessive liabilities. MMC is provided financing to Diamet on grounds of a credit line.
*As of April 1, 2020, MMC made Mitsubishi Hitachi Tools, Ltd. a wholly owned subsidiary by acquiring
additional shares and changed the company name to MOLDINO Tool Engineering, Ltd.

– 22 –

● Metals Business
Regarding the Copper business, one of our main products, MMC can expect growth in demand over the
medium- to long-term in the field of plates and strips.
Regarding the procurement of copper concentrate, which is a major raw material, it is expected that the
supply-demand balance will be eased due to the slowdown of the expansion rate of smelting capacity in
China, and the start and expansion of operations at several new large-scale mines.
However, due to the global spread of COVID-19, there is a concern over sourcing risk of raw materials
associated with a decline in the operating rate of overseas copper mines, falling copper prices, and declining
copper demand, etc. MMC will keep a close watch on economic conditions and the market environment.
Under these circumstances, resources business divisions will work on improvement and reinforcement of the
facilities at the Los Pelambres Copper Mine, Escondida Copper Mine, and the Copper Mountain Mine, as
well as development of new projects. In addition, resources business divisions will support smelting
operations by providing smelters with a stable supply of clean copper concentrate with minimum impurities.
In FY2021, in addition to existing projects, MMC will participate in development projects at the Mantoverde
Copper Mine for which MMC signed an acquisition of stake in, in FY2020. MMC will also focus on researchat the Mining & Metallurgy Laboratories established on April 1, 2020, aimed to develop technologies forremoving impurities in copper concentrate, etc.
In smelting business divisions, MMC will utilize the world-leading E-Scrap processing capacity to enhance
profitability. At the same time, MMC will work on optimizing the material flow in order to efficiently recoverand recycle trace components that grow in the process with an increase in processing volume for E-Scrap.
Furthermore, MMC have again set out to raise dealing with climate change as a theme, to maximize theenvironmental advantages of MMC’s unique Mitsubishi process which has a low impact on the environment.
MMC will also contribute to build a decarbonized society by working on smelting process reform, such as
reducing fossil fuels, improving efficiency in energy conversion and energy use, and use of renewableenergies, etc.
● Cement Business
In Japan, during FY2021, construction delays due to a series of natural disasters during the last fiscal year
will be resolved, and growth in demand is expected due to large-scale projects such as urban redevelopment
projects, etc. On the other hand, there is a concern over delays in construction due to labor and transportcapacity shortages and demand is expected to decline over the medium to long term.
Overseas, MMC expect a moderate increase in demand for cement and ready-mixed concrete in FY2021.
However, due to the global spread of COVID-19, there is a concern over declining shipment volume of
cement due to construction delays. MMC will keep a close watch on economic conditions and the market
environment.
Under these circumstances, in order to respond to a decrease in demand for cement in Japan, which is
forecasted to continue in the future, MMC have signed a letter of intent to start specific discussions andconsiderations for an integration of business with Ube Industries, Ltd., which is to be implemented around
April 2022, aiming to optimize production systems and establish a stable profit base through economies ofscale.
Under the integration, MMC will aim to implement sustainable growth by directing cash flows generated
from the cement business in Japan toward concentrated investment in businesses that are anticipated togenerate growth in and outside of Japan.
In addition, MMC will strive to secure sales volumes by steadily taking in demand for cement for large
projects. MMC will also strive to reduce failure rates in manufacturing and maintain stable supplies.

– 23 –

Furthermore, MMC will contribute to build a recycling-oriented society by strengthening waste disposal
facilities, introducing high-efficiency facilities, and expanding the use of energy alternative waste.
Overseas, in order to bring in steady medium- to long-term demand in the United States, MMC will strive tofurther strengthen our business platform by expanding our operating base into growth markets and expanding
and strengthening our vertical value chain structure.
● Environment & Energy Business
Regarding the environment & energy-related business environment, there is a strong demand forstrengthening our response to environmental problems such as efficient treatment of urban waste, efficientuse of energy resources, and requests for CO2 emissions reduction, as medium to long-term social issues.
However, due to the global spread of COVID-19, there are concerns over delays in renewable energy related
construction work. MMC will keep a close watch on economic conditions and the market environment.
Under these circumstances, in energy-related fields, MMC will expand our renewable energy business andcontribute to build a decarbonized society.
In addition to completing ongoing construction of Komatagawa new hydroelectric power plant from theprevious fiscal year, MMC will proceed with the construction of the Appi Geothermal Power Plant onschedule and continue to carry out surveys of new geothermal sites to develop new businesses.
Regarding the environmental and recycling-related business, while MMC will expand our home appliancerecycling business and car recycling business through advancement of automation and improving the added
value of recovered products, MMC will proactively work demonstrating lithium-ion battery recycling
technologies and solar panel recycling technology.
Furthermore, MMC will aim to secure stable plant operations in the fly ash recycling business andbiogasification business for food waste, and strive to develop a recycling business that does not rely on final
disposal sites.
● Aluminum business
Regarding aluminum beverage cans, domestic demand for ordinary cans is not expected to increase sharply
in the future. Bottle cans are also stagnating due to the release of PET bottle coffee.
Regarding rolled and processed products, increasing demand over the medium- to long-term is expected dueto the growth of next-generation vehicles.
However, due to the global spread of COVID-19, there is a concern over slowdown of production activitiesof our main customers, etc. MMC will keep a close watch on economic conditions and the market
environment.
Under these circumstances, regarding aluminum beverage cans, MMC promote adding value to products
such as large bottle cans. In addition, from the perspective of environmental protection, MMC will makefurther efforts on a sales expansion of bottle cans as alternatives to plastic bottles, reducing the size andweight of products and recycling used aluminum cans.
Regarding rolled and processed products, MMC will promote increasing sales of can materials which is
expected to have continuous demand. MMC will also promote increasing sales of foil products for lithiumion batteries and investing in production facilities, as well as strengthening the business of heat exchangermaterials and extruded products for automobiles.
In addition, MMC will build a competitive corporate structure by strengthening cost competitiveness as wellas promoting production stabilization and selection and concentration of businesses and products in order toensure stable profitability and achieve sustainable growth.

– 24 –

3. Basic Concept for Selection of Accounting Standards
The Group intends to prepare the consolidated financial statements in accordance with Japanese standard for thetime being considering inter-period comparability and inter-company comparability of consolidated financial
statements.
The Group intends to appropriately decide the application of IFRS (International Financial Reporting Standards)
taking various situations into account.

– 25 –

4. Consolidated Financial Statements and Key Notes(1) Consolidated balance sheets
As of March 31, 2019
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Leased gold bullion
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Land, net
Construction in progress
Other, net
Total property, plant and equipment, net
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Retirement benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets– 26 –(Million yen)
As of March 31, 2020

108,648248,220
92,452
108,293
134,825
99,154
120,954(2,900)134,444
217,259
111,409112,908
127,908
95,557
158,444(2,470)909,647

955,462

157,448
243,815
235,664
34,211
16,275

155,868
233,923
216,487
29,29823,720687,415659,298

40,816
17,92435,586
15,90658,74051,492

236,572
1,050
19,61029,322(4,088)183,043
3,211
15,57240,081(4,112)

282,467

237,796

1,028,622

948,588

1,938,270

1,904,050

As of March 31, 2019
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Commercial papers
Income taxes payable
Provision for bonuses
Provision for loss on disposal of inventories
Provision for product compensation
Deposited gold bullion
Other(Million yen)
As of March 31, 2020

147,566
180,100
5,000
7,869
12,872
624
1,435
253,918
118,623

113,148
191,038
50,000
10,221
12,944670
809
294,312
124,746

728,011797,892

50,000259,667
25,61624,09760,000246,578
26,66721,514805

4,014

Provision for loss on business restructuring－

30,272

Provision for environmental measures
Provision for product compensation
Provision for directors' retirement benefits
Retirement benefit liability
Other

40,4271,040
1,623
50,003
33,63932,581392
1,710
56,31240,078

Total current liabilities
Non-current liabilities
Bonds payable
Long-term borrowings
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Provision for loss on business of subsidiaries andassociates

486,921520,123

1,214,933

1,318,016

119,457
92,393352,932(2,123)

119,457
92,393274,723(2,157)562,659

484,416

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans

51,220124
33,023(5,828)(7,617)22,806708
28,059(12,212)(16,997)

Total accumulated other comprehensive income

70,922

22,364

Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity

Non-controlling interests

89,754

79,252

Total net assets

723,337

586,034

1,938,270

1,904,050

Total liabilities and net assets– 27 –

(2) Consolidated statements of profit or loss and consolidated statements of comprehensive
incomeConsolidated statements of profit or loss
(Million yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Rental income from non-current assets
Share of profit of entities accounted for using equity
methodOther
Total non-operating income
Non-operating expenses
Interest expenses
Expense for the maintenance and management ofabandoned mines
Rental expenses on non-current assets
Loss on retirement of non-current assets
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of investment securities
Gain on sales of non-current assets
Other
Total extraordinary income
Extraordinary losses
Impairment loss
Provision for loss on business restructuring
Loss on the Antimonopoly Act
Loss on valuation of investment securities
Provision for environmental measures
Provision for product compensation
Other
Total extraordinary losses
Profit (loss) before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit (loss)
Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent

Year Ended March 31, 2019
(Apr. 1, 2018–Mar. 31, 2019)
1,662,990
1,469,911
193,078
156,21736,861– 28 –

Year Ended March 31, 2020
(Apr. 1, 2019–Mar. 31, 2020)
1,516,100
1,325,438
190,662
152,70937,952

1,254
19,577
5,123

1,302
18,403
5,110

3,594

3,521

2,861
32,412

3,023
31,362

4,855

4,858

3,382

4,018

3,043
2,435
959
3,916
18,59350,679

3,066
2,346
2,073
3,340
19,704
49,610

1,596
5,021
1,301
7,919

14,535826
1,199
16,562

8,440
－
－
3,376
6,630
2,529
1,275
22,25336,345
16,187
12,55028,738
7,606
6,307
1,298

55,09530,272
10,423
4,830
－
－
6,050
106,671(40,498)
18,248
10,561
28,810(69,308)
3,541(72,850)

Consolidated statements of comprehensive income(Million yen)
Year Ended March 31, 2019
(Apr. 1, 2018–Mar. 31, 2019)
Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income(Break down)Comprehensive income attributable to
Owners of parent
Non-controlling interests– 29 –

Year Ended March 31, 2020
(Apr. 1, 2019–Mar. 31, 2020)

7,606(69,308)(44,468)(1,141)
7,371
392
(517)

(28,544)
1,520(7,700)(9,263)(729)(38,363)(44,718)(30,756)(114,027)(39,086)
8,329(116,068)
2,040

(3) Consolidated statements of changes in net assets
Year Ended March 31, 2019 (Apr. 1, 2018–Mar. 31, 2019)(Million yen)
Shareholders’ equity

Share capital
Balance at beginning of current
periodChanges during period
Cash dividends
Profit (loss) attributable toowners of parent
Reversal of revaluation
reserve for land
Increase due to increase in thenumber of consolidated
subsidiaries
Increase due to decrease in
the number of affiliates
accounted for using equity
methodPurchase of treasury shares
Disposal of treasury shares
Changes in ownership interestof parent due to transaction
with non-controlling interests
Net changes in items otherthan shareholders’ equity
Total changes during period

Balance at end of current period

Capital surplus

Retained earnings

92,422

361,430

119,457

Treasury shares

Total shareholders’equity(2,089)571,222(11,786)(11,786)

1,298

1,298

48

48

1,940

1,940

0

0
(36)
1

(0)

(36)
1

(28)

–
119,457(28)(29)
92,393(8,498)352,932(34)(2,123)(8,562)562,659

Accumulated other comprehensive income
Valuation
Deferred
Revaluationdifference on
gains or losses reserve foravailable-foron hedges
landsale securities

Balance at beginning of current
periodChanges during period
Cash dividends
Profit (loss) attributable toowners of parent
Reversal of revaluation
reserve for land
Increase due to increase in thenumber of consolidated
subsidiaries
Increase due to decrease in
the number of affiliates
accounted for using equity
methodPurchase of treasury shares
Disposal of treasury shares
Changes in ownership interestof parent due to transaction
with non-controlling intersts
Net changes in items otherthan shareholders’ equity, net
Total changes during period

Balance at end of current period

95,487

1,068

33,071

Foreigncurrencytranslation
adjustment(10,312)

Total
NonRemeasureme accumulated controllingnts of defined
otherinterests
benefit plans comprehensive
income(8,066)111,249

86,023

Total net
assets768,495(11,786)
1,298
48
1,940

0
(36)
1
(28)
(44,267)

(944)

(48)

4,484

448

(40,326)

3,730(36,595)(44,267)
51,220

(944)
124

(48)
33,023

4,484(5,828)448(7,617)(40,326)
70,922

3,730
89,754(45,158)
723,337– 30 –

Year Ended March 31, 2020 (Apr. 1, 2019–Mar. 31, 2020)(Million yen)
Shareholders’ equity

Share capital
Balance at beginning of current
periodChanges during period
Cash dividends
Profit (loss) attributable toowners of parent
Reversal of revaluation
reserve for land
Increase due to increase in thenumber of consolidated
subsidiaries
Increase due to decrease in
the number of affiliates
accounted for using equity
methodPurchase of treasury shares
Disposal of treasury shares
Changes in ownership interestof parent due to transaction
with non-controlling interests
Net changes in items otherthan shareholders’ equity, net
Total changes during period

Balance at end of current period

Capital surplus

Retained earnings

92,393352,932

119,457

Treasury shares

Total shareholders’equity(2,123)562,659(10,476)(10,476)(72,850)(72,850)

4,963

4,963

153

153

–
(34)
0

(0)

(34)
0

(0)

–
119,457(0)(0)
92,393(78,208)
274,723(33)(2,157)(78,242)484,416

Accumulated other comprehensive income
Valuation
Deferred
Revaluationdifference on
gains or losses reserve foravailable-foron hedges
landsale securities

Balance at beginning of current
periodChanges during period
Cash dividends
Profit (loss) attributable toowners of parent
Reversal of revaluation
reserve for land
Increase due to increase in thenumber of consolidated
subsidiaries
Increase due to decrease in
the number of affiliates
accounted for using equity
methodPurchase of treasury shares
Disposal of treasury shares
Changes in ownership interestof parent due to transaction
with non-controlling interests
Net changes in items otherthan shareholders’ equity, net
Total changes during period

Balance at end of current period

51,220124

33,023Foreigncurrencytranslation
adjustment(5,828)

Total
NonRemeasureme accumulated controllingnts of defined
otherinterests
benefit plans comprehensive
income (loss)(7,617)70,92289,754

Total net
assets723,337(10,476)(72,850)
4,963
153

－
(34)
0
(0)
(28,413)583(4,963)(6,383)(9,379)(48,557)(10,502)(59,060)(28,413)22,806583
708(4,963)28,059(6,383)(12,212)(9,379)(16,997)(48,557)
22,364(10,502)
79,252(137,302)
586,034– 31 –

(4) Consolidated statements of cash flows
Year Ended March 31, 2019
(Apr. 1, 2018–Mar. 31, 2019)
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for loss on business of
subsidiaries and associates
Increase (decrease) in provision for productcompensation
Increase (decrease) in provision for environmental
measures
Increase (decrease) in provision for loss on businessrestructuring
Increase (decrease) in retirement benefit liability andprovision for directors' retirement benefits
Interest and dividend income
Interest expenses
Share of loss (profit) of entities accounted for using
equity method
Loss (gain) on sales of property, plant and equipment
Loss on retirement of non-current assets
Impairment loss
Loss on the Antimonopoly Act
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Decrease (increase) in notes and accounts receivable –trade
Decrease (increase) in inventories
Proceeds from sales of gold bullion
Payment for purchase of gold bullion
Decrease (increase) in other current assets
Increase (decrease) in notes and accounts payable –trade
Increase (decrease) in accrued expenses
Increase (decrease) in other current liabilities
Increase (decrease) in other non-current liabilities
Others, net
Sub-totalInterest and dividend received
Interest paid
Income taxes (paid) refund
Loss on non-conforming products paid
Net cash provided by (used in) operating activities– 32 –(Million yen)
Year Ended March 31, 2020
(Apr. 1, 2019–Mar. 31, 2020)

36,34559,974
4,544(40,498)
64,208
4,449

128

(346)

(181)

3,209

2,475

(1,273)

2,594(7,845)－30,272(1,392)(2,232)(20,831)
4,855(19,706)
4,858(3,594)(3,521)(4,830)
2,435
8,440
－
(1,596)
3,376

(598)
2,507
55,095
10,423(13,086)
4,830

13,922

28,87633,17799,992(99,684)
9,611(18,698)
99,984(99,736)(871)(13,707)(31,249)

(896)
9,750
645
(1,692)
143,865
22,771(4,847)(20,135)(1,486)140,168(5,693)8,650(81)(6,730)65,191
22,597(4,861)(15,381)－
67,545

(Million yen)
Year Ended March 31, 2019
(Apr. 1, 2018–Mar. 31, 2019)
Cash flows from investing activities
Payment for purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Payment for purchase of intangible assets
Payment for purchase of investment securities
Proceeds from sales of investment securities
Payment for purchase of subsidiaries' shares
Proceeds from sales of subsidiaries' shares
Proceeds from liquidation of subsidiaries
Proceeds from sales of subsidiaries' shares resulting inchange in scope of consolidation
Proceeds from transfer of businesses
Payment for loans
Proceeds from collection of loans
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayment of long-term borrowings
Proceeds from issuance of bonds
Payment for redemption of bonds
Net increase (decrease) in commercial papers
Payment for purchase of treasury shares
Cash dividends paid
Cash dividends paid to non-controlling interests
Others, net
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents resulting
from change of scope of consolidation
Cash and cash equivalents at end of period– 33 –

Year Ended March 31, 2020
(Apr. 1, 2019–Mar. 31, 2020)(88,746)
6,396(1,735)(573)
3,000(1,350)285
2,149(89,599)
2,099(1,585)(47)
23,827(1,657)
25
0

－

68

－
(2,720)992(3,935)(86,238)

1,527(4,330)484
2,289(66,898)(17,733)
61,547(52,462)－(25,000)
5,000(36)(11,786)(5,249)(1,893)(47,613)

9,013
32,578(42,078)
10,0001,375(1,960)7,691
87,35527,55999,672

4,624

52

99,672

127,284－
45,000(34)(10,476)(12,829)(2,300)28,873

(5) Key notes related to consolidated financial statements
Segment Information, etc.
[Segment Information]
1. Overview of reporting segments(1) Method to define reporting segments
MMC’s reporting segments are those units of MMC for which discrete financial information is available andsegments are subject to regular review by the Board of Directors to decide allocation of management resources
and to assess the performance.
MMC adopts an in-house company system and each in-house company and business unit or office makecomprehensive domestic and international strategies and conduct business activities with respect to the
products & services handled.
Accordingly, MMC consists of segments by products & services based on in-house company and has 4reporting segments of “Advanced Products”, “Metalworking Solutions Business”, “Metals Business” and“Cement Business”.
(2) Products and services which belong to each reporting segment
Major products of each business are as follows:(i) Advanced Products
Copper alloy products, electronic materials, aluminum products(ii) Metalworking Solutions Business
Cemented carbide products, sintering products(iii) Metals Business
Copper smelting (including copper, gold, silver or sulfuric acid)(iv) Cement Business
Cement, aggregate, ready-mixed concrete, concrete products
2. Method of calculating the amounts of net sales, income and losses for each reporting segment.
・Reporting segments are based on the ordinary profit.
・Amount of revenues and transfer within the Group are based on current market price
3. Matters regarding the change of the reporting segments, among other changes
At the meeting of the Board of Directors held on February 12, 2019, MMC resolved to partially change theorganization of business division. This change became effective on April 1, 2019.
The coal-related business in the “Other businesses” was switched to the “Cement Business,” in which coal isused as thermal energy, to achieve more efficient business management.
In this regard, the segment information for the previous consolidated fiscal year that is disclosed herein is madeaccording to the changed method of segmentation.

– 34 –

4. Information on net sales, profits or losses, assets, liabilities and other items of each reporting segment
Year ended March 31, 2019 (From April 1, 2018 to March 31, 2019)(Million yen)Amount in
Adjustment consolidated
amountfinancialstatements

Advanced
Products

Metalworking
Solutions
Business

MetalsBusiness

CementBusiness

Other
Businesses

Total(1) Sales to outside customers

557,323

159,632

549,232

249,552

147,249

1,662,990－(2) Within consolidated group

13,666

11,918170,864

4,098

47,515

248,064(248,064)－

570,990

171,551

720,097

253,650

194,764

1,911,055(248,064)

1,662,990

Net sales

Total

1,662,990

Segment profit

13,227

15,6092,323

19,725

10,37861,264(10,584)

50,679Segment assets

531,846

230,636

559,421368,081

142,254

1,832,239

106,030

1,938,270

Segment liabilities

437,966

126,598

391,460

132,014122,344

1,210,385

4,548

1,214,933

17,228

11,381

11,897

12,7083,077

56,294

3,680

59,974

434

1,230

－

2,876

2

4,544

－

4,544

Other items
Depreciation
Amortization of goodwill
Interest income

416

56

852

161

289

1,776

(522)

1,254

Interest expenses

2,197

856

1,803

1,193

152

6,204

(1,348)

4,855

Share of profit (loss) of entities
accounted for using equity
method

1,304

－

(577)

2,399

468

3,595

(0)

3,594

Investment into entities
accounted for using equity
method11,697－

3,941

22,9605,265

43,864(150)

43,714

Increase in property, plant andequipment and intangible assets

26,12022,81029,274

16,972

3,694

98,873

4,545

103,418

Notes: 1. “Other Businesses” include nuclear-energy-related services, environmental and recycling-related business, andengineering-related services.
2. “Adjustment amount” of segment profit of -¥10,584 million includes the elimination of intersegment transactionsof ¥81 million and corporate expenses of -¥10,666 million which are not distributed to the reporting segments.
Corporate expenses consist mainly of general and administrative expenses, basic experiment and researchexpenses, and financial revenue and expenses that do not belong to the reporting segments.
3. “Adjustment amount” of segment assets of ¥106,030 million includes the elimination of intersegment transactionsof -¥51,667 million and corporate assets of ¥157,698 million which are not distributed to the reporting segments.
Corporate assets consist mainly of assets of administrative department and assets relating to basic experiment andresearch that do not belong to the reporting segments.
4. “Adjustment amount” of segment liabilities of ¥4,548 million includes the elimination of intersegment transactionsof -¥51,808 million and corporate liabilities of ¥56,356 million which are not distributed to the reporting segments.
Corporate liabilities consist mainly of liabilities of administrative department and liabilities relating to basic
experiment and research that do not belong to the reporting segments.
5. “Adjustment amount” of ¥4,545 million of the increased amount of property, plant and equipment and intangible
assets are mainly capital expenditure made by the Central Research Institute.
6. Segment profit has been adjusted together with ordinary profit on the consolidated statements of profit or loss.

– 35 –

Year ended March 31, 2020 (From April 1, 2019 to March 31, 2020)(Million yen)Amount in
Adjustment consolidated
amountfinancialstatements

Advanced
Products

Metalworking
Solutions
Business

MetalsBusiness

CementBusiness

Other
Businesses

Total(1) Sales to outside customers

499,063

138,396504,380

234,931

139,329

1,516,100－(2) Within consolidated group

12,891

11,878160,634

3,314

48,021

236,741(236,741)－

511,954150,275

665,015

238,246

187,350

1,752,842(236,741)

1,516,100

Net sales

Total

1,516,100

Segment profit

1,499

6,969

28,083

14,968

9,808

61,328(11,717)49,610

Segment assets

496,782

210,092

598,106

333,268

138,451

1,776,702

127,348

1,904,050

Segment liabilities

439,785

141,155434,815

113,977

115,064

1,244,799

73,216

1,318,016

Other items
Depreciation

18,341

13,085

13,132

13,3773,125

61,062

3,145

64,208

Amortization of goodwill

406

1,220

－

2,819

2

4,449

－

4,449

Interest income

418

146

819

67

290

1,742

(440)

1,302

Interest expenses

2,146

944

1,879

582

432

5,984

(1,126)

4,858

495

－

145

1,407

1,471

3,521

(0)

3,521

Investment into entities
accounted for using equity
method

9,174

－

3,704

23,507

8,722

45,108(152)

44,956

Increase in property, plant andequipment and intangible assets

29,92918,55814,602

16,542

5,929

85,562

2,481

88,043

Share of profit (loss) of entities
accounted for using equity
methodNotes: 1. “Other Businesses” includes nuclear-energy-related services, environmental and recycling-related business, andengineering-related services.
2. “Adjustment amount” of segment profit of -¥11,717 million includes the elimination of intersegment transactionsof -¥117 million and corporate expenses of -¥11,600 million which are not distributed to the reporting segments.
Corporate expenses consist mainly of general and administrative expenses, basic experiment and researchexpenses, and financial revenue and expenses that do not belong to the reporting segments.
3. “Adjustment amount” of segment assets of ¥127,348 million includes the elimination of intersegment transactionsof -¥45,931 million and corporate assets of ¥173,279 million which are not distributed to the reporting segments.
Corporate assets consist mainly of assets of administrative department and assets relating to basic experiment andresearch that do not belong to the reporting segments.
4. “Adjustment amount” of segment liabilities of ¥73,216 million includes the elimination of intersegment
transactions of -¥37,352 million and corporate liabilities of ¥110,569 million which are not distributed to thereporting segments. Corporate liabilities consist mainly of liabilities of administrative department and liabilities
relating to basic experiment and research that do not belong to the reporting segments.
5. “Adjustment amount” of ¥2,481 million of the increased amount of property, plant and equipment and intangible
assets are mainly capital expenditure made by the Central Research Institute.
6. Segment profit has been adjusted together with ordinary profit on the consolidated statements of profit or loss.

– 36 –

[Related information]
Year ended March 31, 2019 (From April 1, 2018 to March 31, 2019)
1. Information by product and service
This section is omitted as the same information is disclosed in Segment information.
2. Information by region(1) Net sales
Japan(Million yen)
United States

916,687

159,656

EuropeAsia

84,863

Other

480,389

21,394(2) Property, plant and equipment
Japan

United States

Total
1,662,990(Million yen)

Europe

Asia

Other

544,068
83,9299,188
48,657
1,570
1. Segmentation by country or region is based on geographical proximity.
2. Major countries or regions which belong to segments other than the United States(1) Europe
Germany, the United Kingdom, Spain, France and Finland(2) Asia
Indonesia, South Korea, Malaysia, Singapore, China, Taiwan, Hong Kong and Thailand(3) Other
Australia, Canada and Brazil

Total
687,415

3. Information by major customers
This section is omitted as no single customer accounts for 10% or more in the net sales in the consolidated
statements of profit or loss.
Year ended March 31, 2020 (From April 1, 2019 to March 31, 2020)
1. Information by product and service
This section is omitted as the same information is disclosed in Segment information.
2. Information by region(1) Net salesJapan
842,261(Million yen)

United States
156,444

EuropeAsia

146,924

350,225

Other
20,246(2) Property, plant and equipment
Japan
511,479

United States
83,641Total
1,516,100(Million yen)

EuropeAsia

10,85351,855

Other
1,468

Total
659,298

1. Segmentation by country or region is based on geographical proximity.
2. Major countries or regions which belong to segments other than the United States(1) Europe
Germany, the United Kingdom, Spain, France and Finland(2) Asia
Indonesia, South Korea, Malaysia, Singapore, China, Taiwan, Hong Kong and Thailand(3) Other
Australia, Canada and Brazil

3. Information by major customers
This section is omitted as no single customer accounts for 10% or more in the net sales in the consolidated
statements of profit or loss.

– 37 –

[Information on impairment loss on fixed assets by reporting segments]
Year ended March 31, 2019 (From April 1, 2018 to March 31, 2019)(Million yen)

Impairment loss

Advanced
Products

Metalworking
Solutions
Business

MetalsBusiness

CementBusiness

Other
Businesses

2,445

5,547

－

232

66

Total

8,291

Corporate or
elimination

Grand total

148

8,440

(Note) Adjustment amount of 148 million yen of impairment loss consists mainly of impairment loss on idle assets.

Year ended March 31, 2020 (From April 1, 2019 to March 31, 2020)(Million yen)

Impairment loss

Advanced
Products

Metalworking
Solutions
Business

MetalsBusiness

CementBusiness

Other
Businesses

33,80621,122

－

20

55

Total

55,005

Corporate or
elimination

Grand total

90

55,095(Note) Adjustment amount of 90 million yen of impairment loss consists mainly of impairment loss on idle assets.

[Information on amortized and unamortized amounts of goodwill by reporting segments]
Year ended March 31, 2019 (From April 1, 2018 to March 31, 2019)(Million yen)
Advanced
Products

Metalworking
Solutions
Business

MetalsBusiness

CementBusiness

Other
Businesses

Amortization in thefiscal year ended March
31, 2019

434

1,230

－

2,876

2

Unamortized balance atthe end of the fiscal year
ended March 31, 2019

7,762

7,302

－

25,746

4

Corporate or
elimination

Grand total

4,544

－

4,544

40,816－40,816

Total

Amortized and unamortized amounts of negative goodwill resulted from business combination, etc. carried out
before April 1, 2010 are as follows(Million yen)
Advanced
Products

Metalworking
Solutions
Business

MetalsBusiness

CementBusiness

Other
Businesses

Amortization in thefiscal year ended March
31, 2019

–

–

–

–

–

Unamortized balance atthe end of the fiscal year
ended March 31, 2019

2,221

–

–

–

–

Corporate or
elimination

Grand total

–

–

–

2,221

–

2,221

Total

Year ended March 31, 2020 (From April 1, 2019 to March 31, 2020)(Million yen)
Advanced
Products

Metalworking
Solutions
Business

MetalsBusiness

CementBusiness

Other
Businesses

Amortization in thefiscal year ended March
31, 2020

406

1,220

－

2,819

2

Unamortized balance atthe end of the fiscal year
ended March 31, 2020

7,081

6,077

－

22,4252– 38 –

Corporate or
elimination

Grand total

4,449

－

4,449

35,586－35,586

Total

Amortized and unamortized amounts of negative goodwill resulted from business combination, etc. carried out
before April 1, 2010 are as follows.
(Million yen)
Advanced
Products

Metalworking
Solutions
Business

MetalsBusiness

CementBusiness

Other
Businesses

Amortization in thefiscal year ended March
31, 2020

–

–

–

–

–

Unamortized balance atthe end of the fiscal year
ended March 31, 2020

2,221

–

–

–

–

Corporate or
elimination

Grand total

–

–

–

2,221

–

2,221

Total

Per-share Information

Net assets per share
Profit (loss) per share

Year ended March 31, 2019
(From April 1, 2018
to March 31, 2019)
4,838.31 yen
9.92 yen

Year ended March 31, 2020
(From April 1, 2019
to March 31, 2020)
3,870.35 yen(556.34) yen(Notes) 1. Diluted per share pertaining to the current consolidated fiscal year is loss per share and also it is notprovided as there is no potential share. Diluted profit per share pertaining to the previous
consolidated fiscal year is not provided as there was no potential share.
2. Profit (loss) per share is calculated based on the following items:
Year ended March 31, 2019Year ended March 31, 2020
(From April 1, 2018
(From April 1, 2019
to March 31, 2019)
to March 31, 2020)
Profit (loss) per share
Profit (loss) attributable to owners of parent
1,298(72,850)(million yen)Amount not attributable to common shareholders(million yen)－

Profit (loss) attributable to common shareholdersof owners of parent (million yen)
Average number of shares issued during terms(thousand shares)

1,298
130,956– 39 –－(72,850)
130,945

Important Subsequent Events(Additional purchase of subsidiaries’ shares)
MMC entered into a share purchase agreement with Hitachi Metals, Ltd. on March 2, 2020 under which MMC
acquires the shares in Mitsubishi Hitachi Tool Engineering, Ltd. which is a subsidiary of MMC, and has
acquired such shares on April 1, 2020.
1. Overview of transaction(1) Name and business of acquired enterprise
Name of acquired enterprise: Mitsubishi Hitachi Tool Engineering, Ltd.
Description of business: Manufacturing and sale of cemented carbide tools(2) Date of business combination
April 1, 2020
(3) Legal form of business combination
Share acquisition from non-controlling shareholders in consideration for cash(4) Name of the companies after the business combination
MOLDINO Tool Engineering, Ltd.
(5) Other matters concerning overview of transaction
MMC additionally acquired 49% of the voting rights of Mitsubishi Hitachi Tool Engineering, Ltd. resulting in
MMC holding 100% of the voting rights. The purpose of the additional acquisition is to cope with rapidlychanging market needs and to realize more flexible operation.
2. Overview of implemented accounting procedures
MMC plans to account processing for the merger as a transaction conducted with non-controlling shareholders
under common control in accordance with the Accounting Standard for Business Combinations (AccountingStandards Board of Japan (hereinafter “ASBJ”) Statement No. 21, January 16, 2019) and Guidance on
Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures (ASBJ
Guidance No. 10, January 16, 2019).
3. Matters to be provided upon additional purchase of subsidiaries’ shares
Cost of acquisition and breakdown of considerations by kindConsideration for acquisition (million yen)

Cash and deposits (million yen)

Acquisition cost (million yen)

24,916
24,916(Note) The amount above is calculated at the time of acquisition before price adjustments.
4. Matters concerning changes in MMC’s interest due to transactions with non-controlling shareholders(1) Major factors affecting capital surplus
Additional purchase of subsidiaries’ shares(2) Amount of capital surplus decreased by transactions with non-controlling shareholders
Not yet defined at this moment.

– 40 –

(Change in business segmentation)
MMC changed its reporting segments due to restructuring implemented on April 1, 2020.
By this change, the energy-related business and environmental and recycling-related business that fell underto “Other Businesses” was changed to “Environment & Energy Business”. The aluminum-related
business was split off from “Advanced Products” to “Other Businesses”. In addition, the cement
sales-related business, which was included in “Other Businesses”, has been transferred to “Cement
Business”.
Due to these changes, MMC has changed their method of business segmentation from “Advanced Products,”“Metalworking Solutions Business,” “Metals Business,” “Cement Business,” and “Other Businesses” to“Advanced Products,” “Metalworking Solutions Business,” “Metals Business,” “Cement Business,”“Environment & Energy Business,” and “Other business.”
Information on net sales, profits or losses, assets, liabilities, and other items for each reporting segment forthe consolidated fiscal year under review based on the business segments after the change is as provided
below.
Consolidated fiscal year (From April 1, 2019 to March 31, 2020)
Information on net sales, profits or losses, assets, liabilities, and other items for each reporting segment(Million yen)Amount in
Metalworkin
Advanced

Environment
MetalsCementg Solutions
Products

Other

Adjustment& Energy
Business

Business

Business

consolidated

Total
Businesses

amountfinancialBusinessstatements

Net sales
363,101138,396504,380

244,180

26,562

239,480

1,516,100－

1,516,100

12,282

11,878160,634

3,329

526

45,811

234,464(234,464)

－

Total

375,384

150,275

665,015

247,510

27,088285,291

1,750,565(234,464)

1,516,100

Segment profit

5,440

6,969

28,083

15,539

3,437

1,842

61,310(11,700)

49,610

Segment assets

370,482

210,092

598,106

340,527

41,068217,629

1,777,906

126,143

1,904,050

Segment liabilities

317,256

141,155434,815

118,635

39,582

194,026

1,245,472

72,544

1,318,016

10,68013,085

13,132

13,642

1,373

9,148

61,062

3,145

64,208

406

1,220

－

2,819

－

1

4,449

－

4,449

Interest income

410

146

819

70

24

208

1,680

(377)

1,302

Interest expenses

1,654

944

1,879

584

100

759

5,922

(1,064)

4,858

527

－

145

1,407

1,471

(31)

3,521

(0)

3,521

8,821

－

3,704

23,507

8,741

333

45,108(152)

44,956

20,51018,55814,602

16,892

3,977

11,021

85,562

2,481

88,043(1）Outside customers(2）Within consolidated
group

Other items
Depreciations
Amortization of
goodwill

Share of profit (loss) ofentities accounted forusing equity method

Investment intominority shareholding
Change in property,
plant and equipment
and intangible assets– 41 –

(Note 1) Other Businesses include aluminum-related and engineering-related services.
(Note 2) “Adjustment amount” of segment profit of -¥11,700 million includes the elimination of intersegment
transactions of -¥100 million and corporate expenses of -¥11,600 million which are not distributed to thereporting segments. Corporate expenses consist mainly of general and administrative expenses, basic
experiment and research expenses, and financial revenues and expenses that do not belong to the reporting
segments.
(Note 3) “Adjustment amount” of segment assets of ¥126,143 million includes the elimination of intersegment
transactions of -¥47,135 million and corporate assets of ¥173,279 million which are not distributed to thereporting segments. Corporate assets consists mainly of assets of the administrative department and assets
relating to basic experiments and research that do not belong to the reporting segments.
(Note 4) “Adjustment amount” of segment liabilities of ¥72,544 million includes the elimination of intersegment
transactions of -¥38,025 million and corporate liabilities of ¥110,569 million which are not distributed to
the reporting segments. Corporate liabilities consists mainly of liabilities of the administrative department
and liabilities relating to basic experiments and research that do not belong to the reporting segments.
(Note 5) “Adjustment amount” of ¥2,481 million due to increases in property, plant and equipment and intangible
assets are mainly capital expenditure made by the Central Research Institute.
(Note 6) Segment profit has been adjusted together with ordinary profit on the consolidated statements of profit andloss.

– 42 –