Mitsubishi Materials Corporation
Investor Conference Material

November 9, 2018

Naoki Ono, President
Mitsubishi Materials Corporation
1｜2018.11.9

Contents

1. Status of Respond to the Matters of Non-Conforming Products
and of Implement of the Group Governance Framework
Enhancement Measures (P3-18)

2. Performance Summary (P20-22)
3. Progress on the Medium-Term Management Strategy (P24-27)
4. Initiatives by Segment (P29-42)
5. Recap (P44)2｜2018.11.9

Safety Confirmation Status of the Matters of Non-Conforming ProductsCompany nameProducts

Number ofcustomers

DiametCorporation

Sintering machineryparts, etc.

113

Progress of Safety Confirmation Status

A

B

C

Ｄ

74
67

36
43

3

0

Details
Rewriting of inspection records data, noninspection, etc.

As of November 5, 2018

A The customer has completed its confirmation that there are no safety concerns
B The customer has determined that there are no immediate safety concerns, but is conducting further review
C The affected companies have communicated to the customers its opinion that, from a technical perspective, there is highprobability that the affected products can be assumed to be safe
D The affected companies have provided notification that Non-Conforming Products were delivered to the customer

In regards of Mitsubishi Cable Industries, Ltd., Mitsubishi Shindoh Co.,Ltd., Mitsubishi
Aluminum Co., Ltd., and Tachibana Metal Manufacturing Co.,Ltd., we have completed its
confirmation that there is no major safety concerns at all of their customers. (announced on
August 7, 2018)
3｜2018.11.9

Preventive measures of the Matters of Non-Conforming Products(Announced on May 15, 2018)
Main causes of the shipment of non-conforming products

Preventive measures(Restructuring Measures of the Governance Framework
for Quality Control in the Group)◆Inadequate framework for exerting influence on productdevelopment and order receiving processes at order
receiving stage◆Attitude excessively prioritizing "order receiving" and"delivery date“◆Order received and mass production that the specifications
exceeding manufacturing capability◆Insufficient framework of quality assurance system◆Pressure on quality assurance departments from otherdepartments◆Low awareness of compliance with specifications◆Arrogance in thinking that quality control is being achieved◆Low sensitivity to risk in relation to quality issues

1) Implementation of a front loading system fororder receiving

2) Enhancement of the framework and authority ofthe quality control department

3) Expansion of quality training

4) Promoting automated inspection equipment◆Insufficient business resources(insufficient inspectors, inspection equipment, etc.)

5) Enhancement of quality audits◆Audit procedures that has become a mere facade6) Utilization of outside consultants

4｜2018.11.9

Preventive measures of the Matters of Non-Conforming Products
Tasks already implemented

Preventive measures of the Matters of Non-Conforming Products (1/3)

Tasks being implemented
Tasks to be implemented

As of end of Sep.
Implementation schedule
Name of measure

Outline of measure◆Establishment and wide dissemination ofguidelines◆Confirmation of operation status (35% of
FY2019 plan is completed)1

Implementation of afront loading system(FLS) for order
receiving

FY2019FY
2018First half

Establishment
and widedisseminationof FLS
guidelines- Review of FLS
guidelines

Second half

Subsequent fiscal year

- Confirmation (during quality audits) and periodic review of FLS operation status- Strengthening design review (DR) when making
quotations- Accumulation of technical data
◆Primary preventive measures for quality
issues at 6 affected companies

Continued implementation- Establish a structure to deliberate from the design development stage
Implementation ofdesign review (DR)- Reconsideration of order receiving determination process and improvement ofoperation◆Confirmation that independence of quality
assurance function is ensured: - At the endof Sep., improvement already made◆Confirmation of area of responsibility andstatus of fulfilment at quality assurance
department: -At the end of Sep.,
improvement already made2

- Investigation- Confirmation- Formulation of
improvement
measures- Improvement of
independence/area of
responsibility- Confirmation of effectiveness of framework and authority using internal audits, etc.
- Confirmation of operation status during quality audits- Change of organization of quality assurance departments- Increase in quality assurance-related human resources- Formulate the policy of quality control

Enhancement of theframework andauthority of thequality control
department- Enhancement of the independence of quality assurance
department and ensuring the authority of shipment◆Primary preventive measures for quality
issues at 6 affected companies- Development of system forinspection before shipment- Clarification of quality
responsibility in eachdepartment- Expansion of in-process inspection system and improvement of equipment- Review of quality assurance standards and construct quality control system- Strengthening of the quality and quantity of humanresources for the Quality Assurance Department

5｜2018.11.9- Rotation inside the business division- Rotation across the business division

Preventive measures of the Matters of Non-Conforming Products
Preventive measures of the Matters of Non-Conforming Products (2/3)

Tasks already implemented
Tasks being implemented
Tasks to be implemented

As of end of Sep.
Name of measure

Outline of measure◆Provision of quality training to relevant
employees including R&D, manufacturing andquality assurance at locations in Japan andoverseas (88% of FY2019 plan is completed)

3

FY
2018
- Training
preparation

First halfTraining provision(see P.7)

Implementation schedule
FY2019Second half

- Follow-up and review of training content- Additional implementation (China and Thailand)- Compliance education- Education based on this matter

Expansion ofquality training◆Primary preventive measures for quality issues at
6 affected companies

Implementation of tiered personnel training- Leadership meetings for managers- Categorization ofskills required at eachlevel

◆Promotion of automated inspection equipment(24% of FY2019 plan is completed)

4

Promotingautomatedinspection
equipment- Collection andcollation of data

- Improvement
andenhancement of
the function of
the Company's
enterprisesystem◆Primary preventive measures for quality issues at
6 affected companies

Subsequent fiscal year

- Skill support training for leaders ofworkplace- Confirmation of progress in promoting automated inspection equipment- Sharing information and applying within the Group
Status of progress(see P.8)- Introduction of the inspection equipment for automated- Automated uploading to the Company's enterprise system- Introduction of new technology for measurement and automated- Improvement of issuance system for certificate of analysis- Compilation of database for product specification- Automated collecting of inspection data

6｜2018.11.9

Holding a report meeting on the
progress of recurrence
prevention measures

3

Expansion of quality training(Provision of quality training to relevant employees including R&D, manufacturing and quality assurance at locations in Japan and overseas)

Training for education leader of quality was completed based on the formulated plan. We will also carry out training overseas
and hold quality guidance meetings led by outside consultants to establish the educational program in the training.
■Training for education leader of quality
Category

Schedule

Location

Participants

Number ofTrainings

Number ofParticipantsPlan- August

Japan (Saitama)

Relevant employees including R&D, manufacturing and quality
assurance at locations in Japan and overseas

14

218

14 (100%)

218 (128%)(Addition) Relevant employees including R&D, manufacturingand quality assurance at locations in China

120(Addition) Relevant employees including R&D, manufacturingand quality assurance at locations in Thailand

1

14(Addition) Relevant local employees including R&D,
manufacturing and quality assurance at locations in Thailand

1

7

3

41

Results as of End of August
July 30, 2018
Addition

Overseas (China)

October 9, 2018

Overseas (Thailand)
October 10, 2018

Additions total■Follow-up
Issue: Participants need support in providing training at each workplace (e.g., responses to questions)

Measures
RegionDescription

Japan

•
•

Continue to hold quality guidance meetings led by outside consultants
Respond to questions

Overseas••(New) Hold quality guidance meetings led by outside consultants(New) Translate quality textbooks into local languages (Chinese and Thai)

7｜2018.11.9

Quality training held by outside
consultants (Shanghai, China)

4Promoting automated inspection equipment- When the three-year is completed, 90% of planned devices subject to inspection will be ready for automation.
- In FY2019, we plan to realize 40% of devices for automated inspection.
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0

Unit (set)Trends in the Number of Devices for Automated Inspection (Plan)
Final automation total number (3,855 sets)

3,393

2,598
1,601
345

379

End of June 2018(result)

End of Sep.
(result)

End of FY2019

End of FY2020

Measuringequipment

End of FY2021

Measuringequipment

Automatedacquisition of
inspection data

Elimination of data input and copying andautomatic transfer of measured values
8｜2018.11.9

Automated inspection equipment

Preventive measures of the Matters of Non-Conforming Products
Tasks already implemented

Preventive measures of the Matters of Non-Conforming Products (3/3)

Tasks being implemented
Tasks to be implemented

As of end of Sep.

Name of measure

Outline of measure◆Review of checklist for quality audits

5

Enhancement of quality
audits◆Implementation of quality audits of all
affected locations requiring quality audits(35% of FY2019 plan is completed)* Part of quality audits moved forward

FY
2018
Establishment

First half

Implementation schedule
FY2019Second half

Subsequent fiscal year

- Review as necessary after establishment- Implementation of quality audits- Planning andpreparation- Preparation of internal audit
checklist- Internal auditor training
Implementation of quality audits

6◆Implementation of quality consultant
guidance (50% of FY2019 plan iscompleted)* Guidance meetings increased from 18
to 30 meetings

Utilization of outside
consultants- Implementation of quality consultant guidance meetings for each location- Confirmation of status of improvement and progress at each company, sharing of information and applying within the Group◆Primary preventive measures for quality
issues at 6 affected companies

9｜2018.11.9

Promotion Framework for Governance Framework Enhancement(Announced on May 15, 2018)
Recommend

Report, advice,proposal

Board of Directors

Committee for Monitoring of Measures toEnhance Governance
Report1

Consultation
Provision of
information

Governance Deliberative Council

The Committee will deliberatebusiness divisions' policies andplans related to governance.
The Committee is composed of
the President, Officers at thelevel of Managing Executive
Officer and above, Standing
Corporate Auditor, etc.

- Checking of progress,
supervision andguidance

President(Chairman)

1~

Report on performance of
operations (Quarterly)

Corporate Strategy
Committee

Propose- Checking of progress ofenhancement measures,etc.,
supervision and guidanceSupervision of establishment andimplementation of enhancement
measures, etc.

Members- Officers at the level of Managing
Executive Officer and above- Standing Corporate Auditor (Observers)

collaboration

Report on performance of operations (monthly)- Progress and achievements of enhancement measuresin the GroupManagement audits,quality audits, support

Business
locations of theCompany

4Group Governance Enhancement and Promotion Division <New>(Support implementation of governance enhancement and confirm
progress）

2

Group
companies

5
Report of progress,
confirmation

Notes:The organizations that implement and promote ofGroup Governance Framework Enhancement Measures(5 measures).

10｜2018.11.9

Corporate Auditor

Executive officers responsible
for corporate division

Executive officers responsible
for business division
Business divisions(Implementation of
governance enhancement
measures)Committee for Nomination andCompensation

Governance Division
Strengthen management and support ofgovernance-related matters by management
divisions- Request business divisions to provide
necessary information- Propose improvements and measures for
implementation to business divisions
Safety & Environment Dept.

CSR Dept.

Quality Management Dept.

Internal Audit Dept.

5Corporate Strategy
Division3

Human Resources& General Affairs
Division
Technology
Division

Task Force of the Matters of Non-Conforming Products(preventive measures at 6 affected locations)Initiatives for Governance Framework Enhancement

Key point that we have learned
through our activities so far■ Inadequate communication had become thenorm, often preventing the feedback in theworkplace from reaching the management. The
parent company was not providing adequate
support based on the condition of the workplacein response to reports of on-site employees.
■ When the management informed workplace
employees of policies and rules, it failed toadequately explain the purposes and details ofsuch policies and rules.

Current activities■ Developing information routes and networks
and having dialogues between the
management and workplace employees tofacilitate accurate and prompt interactive
communication from the management to theworkplace and vice versa. Also considering
the introduction of information tools to promote
active communication.
■ Learning issues through questionnaires taken
by management of subsidiary, employee
attitude surveys, and on-site governanceaudits, and developing support systems forproblem solving.
■ Conducting reviews focusing on thecomprehensibility of rules for group
governance.

11｜2018.11.9

The Target of Group Governancethat the Mitsubishi Materials Group Aims to Achieve
We aim for governance under which efficient and autonomous communication takes place between the parent company
and subsidiaries, between the head office and plants, and among the subsidiaries.
Parent company

Management

Governance whose strength
varies for each in-housecompany, business locationsand Group company

P
A D
C

Appropriate operation
through PDCA mechanism

Managers(GeneralManagers andmanagers)

In-housecompany…

P
A DC
Organizations

Employees

Reporting lines in both
directions between theparent company andsubsidiaries and among
different levels in an
organization have beendeveloped, and informationis shared appropriately.

・
・
・

P
A D
C

P
A D
C

Plants of theCompany

Subsidiary

Management

Management

P
A D
C
…

P
A D
C

Maintenance of interactive
communication

・・・Managers(GeneralManagers andmanagers)

・
・
・

・
・
・

P
A D
C
…

P
A D
C
Employees

Employees
Employees

The management makes
prompt decisions based on
the information shared, and
the Group as a whole carries
out its businessappropriately.

・
・
・

・
・
・

Creation of corporate culturethat promotes active
communication[Legend]P
A D: Range in which the PDCA mechanism and system have been developed and operated and risk information is reported and shared appropriately
C…

12｜2018.11.9: Level at which communication is active and employees are free to express their opinions

Group Governance Framework Enhancement Measures(Announced on May 15, 2018)
1

Enhancement offramework for discussion,and reporting ofgovernance-related
matters◆ We will implement a framework for reducing risks and preventing problem occurrences⇒ In April 2018, we have deliberated and shared policies, plans, etc. on governance-related
matters through the “Governance Deliberative Council”

Improvement of functionsof management divisions
and their collaboration
with operating divisions◆ Launch of Governance Division on April 1, 2018
We have established the Governance Division to improve administrative division’s control andsupport functions for governance-related matters

Improvement of humanresources training andencouragement of active
interaction◆ We will expand educations regarding governance-related matters◆ In addition to promoting human resources interactions in the Group, and endeavoring todeepen communication, we will provide human resources training throughout the Group by
developing the knowledge and experience in various divisions

Internal audit
strengthening◆ The frequency and content of audits will be enhanced through cooperation with eachdepartment within the Governance Division.

Studies with a business
optimization focus◆ Effectiveness of the governance is one of the important decision-making criteria when
considering business portfolio◆ We will seek to achieve an appropriate balance so that the Group’s governance capabilities
match the business domains

2

3

4

5

13｜2018.11.9

Group Governance Framework Enhancement Measures
Tasks already implemented

Group Governance Framework Enhancement Measures (1/4)

Tasks being implemented

As of end of Sep.

Name of measure

Outline of measureFirst half

Tasks to be implemented

Implementation schedule
FY2019Second half

Subsequent fiscal year

Establishment of Governance Division
Clarification of provisions on
the reporting framework /content

1
Enhancement offramework fordiscussion, andreporting ofgovernance-related
matters◆Formulation of annual plan regarding
governance enhancement◆Restructuring of the Group’s internalreporting framework regarding
initiatives on governance-related
matters◆Redesign of matters to be reported anddiscussed at meetings of Corporate
Strategy Committee and Board of
Directors including in-house companies
and subsidiaries

Formulation of annual plan
Investigation and analysis ofcorporate management at
subsidiaries

Consideration of outline of the Group
Governance Policy (GGP)

Fomulation of enhancement measures of governance of subsidiaries

Design and development of PDCA
cycle for risk management

2
Improvement offunctions ofmanagement divisions
and their collaboration
with operating
divisionsContinued operation and monitoring◆Design of PDCA cycle for risk
management across the entire Group◆Promoting implementation of risk
reduction measures across the entire
Group and management of progress

Promoting implementation of risk
reduction measures andmanagement of progress

Introduction of GRP to subsidiaries,
evaluation and improvement after
introduction

Introduction of Group risk management

Holding of Group Governance Deliberation Council and monitoring◆Holding of Governance Deliberation
Council and monitoring

14｜2018.11.9● Apr.
Deliberative
Councilheld● May
Progressannouncement⇒ done● Aug.
Progressannouncement⇒ done◆ Oct.
Monitoring● Nov.
Progressannouncement● Feb.
◆ Feb.
Progress
Deliberative
announcement Council(Progress report at Corporate Strategy Committee meeting each month)

Continued operation and monitoringGroup Governance Framework Enhancement Measures
Tasks already implemented

Group Governance Framework Enhancement Measures (2/4)

Tasks being implemented
Tasks to be implemented

As of end of Sep.

Name of measure

Outline of measureFirst half

Implementation schedule
FY2019Second half

Subsequent fiscal year

Implementation of explanations and training on governance of subsidiaries and risk management< Revision of related training programs/expansion of trainees >◆Training on governance-related mattersfor executives of each Group company◆Familiarizing of reporting system forrisk management and risk information

Implementation ofmanagement
executives training

Foster the sense of a risk management perspective / Solving problem in the eachorganization to which management is in charge of< Dialogues from the President / compliance workshop (managers level) >Continued implementation of investigation regarding corporate culture
and compliance awareness3
Improvement of
human resources
training andencouragement ofactive interaction◆ May
Investigation⇒ done◆Encouragement of active interaction ofhuman resources between
departments,
between parent company andsubsidiaries, and within subsidiaries◆Human resources training throughout
the Group◆Aug.
Additional investigation⇒ doneConsideration of human resources
measures to encourage active
interaction◆ Dec.
Investigation• Attitude surveys was conducted atbusiness locations of the Company
and 124 Group companies• We will conduct attitude surveys semiannually (June and December) fromnow on and continuously monitorchanges in employees’ awarenessContinued implementation of
investigation regarding corporate
culture and compliance awarenessIntroduction and implementation of human resources measures to encourage active
interaction (in conjunction with introduction of governance of subsidiaries)

Formulation and implementation of Group-wide human resources development plans

As part of measures to improve
communication through human resourcesinteraction and the development of nextgeneration management executives in theentire Group, we sent eight employees toGroup companies and received sevenemployees from Group companies.

Activation of workplace and raising compliance awareness< Dialogues from Managing Executive Officer / Implementation of small group activities >◆Transformation of Corporate Culture- Organization with good and healthy
communication where employee can beunrestricted communication -Continued implementation of various
measures
Consideration of measures based on results of attitude surveys

15｜2018.11.9

Expansion of Various Workshop
Group Governance Framework Enhancement Measures (3/4)- Aiming to Be a Organization with Good and Healthy Communication
where Employee Can Be Unrestricted Communication As of end of Sep.
FY2019Name of measure

Tasks already implemented
Tasks being implemented
Tasks to be implemented

Objective and Purpose
First half

Promotion of active dialogues through workshops(1) Dialogues from the President

From the President togeneral managers of
the plants of theCompany and theGroup companies'
presidents

Second half

◆From the President to general managers of the plants of the Company and
the Group companies' presidents◆Expansion from the general manager to its managers◆Expansion from the presidents of the Group companies to the management
executives at each company◆Expansion from executive officers at each company to managers◆Expansion from president of indirectly owned subsidiaries to managers
at each company

From the President
to managers(2) Dialogues from Managing
Executive Officer(General Manager ofGovernance Div.)

Mutual trust and mutual understanding• Mutual understanding: relationship in which parties involved
feel safe to express their opinions• Mutual trust: relationship in which one endeavors tounderstand the ideas of the others and the others alsoendeavor to understand the his or her ideas

A) Dialogues from the President• Communication of issues based on the string of quality issues, progress of
implementation and policies of respond, etc.
• Sense of ownership of businesses and organizations

A
Dialogies with the generalmanagers of the locationsof the Company and thepresidents of the Group
companies by the
President• Deeply thinking through workshops about what to do to one’s organization andwhat to do for that purpose• For downstream expansion, raising a sense of ownership of one’s own
organization or business through determination by speaking in his or her own
words as a instructor◆Lectures and direct dialogues provided to managers at subsidiaries andbusiness locations (four sessions with 57 participants in first half of FY)• Improvement of communication through "mutual understanding" and "mutual
trust" relationships developed by the President by having direct dialogues withmanagers level at workplace◆Lectures, direct dialogues, and workshops provided to assistant manager
of subsidiaries and business locations (seven sessions with 238
participants in first half of FY)• Closing the gap between the head office and workplace through directcommunication to improve communication* Carry out for the purpose of following up on the aspect of (3) (supporting
applicable employees, providing management knowledge, etc.)

B◆Group training provided by a specialized agency (outside
resources)◆Workshop that primarily uses the Matters of Non-Conforming
Products in the Group as a case study(3) Complianceworkshops◆Participants are managers level in business locations• Establishment of a sense of crisis and promotion of problem solving in theworkplace
1. Creating a sense of ownership based on the recognition of the current
situation of their own organization and ask how they would like it to change

2.

Repeatedly conveying the Matters of Non-Conforming Products in the Group
as a case study to prevent weatheringB) Dialogues from Managing
Executive Officer(4) Small group activities

16｜2018.11.9◆Autonomous and continuous activities that use small group activities in the workplace• Fostering the sense of a compliance mindset• Improvement of communication in and between workplaces

Group Governance Framework Enhancement Measures
Tasks already implemented

Group Governance Framework Enhancement Measures (4/4)

Tasks being implemented
Tasks to be implemented

As of end of Sep.
Implementation schedule
Name of measure

Outline of measure

FY2019First half
Development offramework foraudited locations,
themes, andprocedures◆Implementation of management audits◆Implementation of quality audits (70-80
locations / year and 2 year cycle)

4 Enhancement of

Examinationof audit
themes,bases, andprocedures

auditsTrialaudits◆Joint audits with Corporate Auditor

Studies with a

5 business
optimization focus

17｜2018.11.9◆Consideration of business portfolio
incorporating governance perspective

Second half

Implementation of management and quality audits

Formulation of audit plan for next
fiscal year
Audits in 20 locations
were completed in firsthalf of FY (target for FY
is 90 locations)

Implementation of joint audits with Corporate Auditor

Examination in conjunction with measures (1) and (4)Subsequent fiscal year

Implementation of management andquality audits (continued)

4

Utilization of Governance Audit Results

Governance audits are conducted to investigate whether governance issues exist and the causes of these issues. Sharing
information about them helps to solve issues across the Group.
Purpose of governance audits
 To support solving issues across the Group, including at the corporate division and in-house companies, by investigating whether issues exist in
considering and implementing governance enhancement measures and business operation stated in the plan for the conduct of governance and thecauses of these issues, and by sharing information about these issues and causes

Tasks of governance audits⇒ Whether subsidiaries and associates manage their business(including the selection of risks and return related to importantrisks) based on instructions provided by the parent company⇒ Whether the parent company is monitoring the management
conditions of its subsidiaries and associates⇒ Whether subsidiaries and associates are reporting the conditions of
their business management

The plan for the conduct of governance

Overall

Perspectives of governance audits

 Identify issues in considering and implementing governanceenhancement measures stated in the plan for the conduct ofgovernance Evaluate the governance of the entire Group from the following
perspectives, identify "positive aspect"s and "conditions currently
requiring improvement", and clarify the specific actions (including
who does what)

Scope of implementation of governance audits

Riskmanagement

SafetyHealthDisasterprevention

Environment

CSR

Quality

Developmentof human
resources
Interaction ofhuman
resources

Preventive
measuresReportingsystem /management
function• Whether plans and policies are considered by an appropriate meeting or executives, instructed to eachdepartment, and implemented in the workplace• Whether the status of implementation in the workplace is reported to each department and appropriate
meeting or executives and monitored

Human
resources /investment• Whether recruitment, training, placement, and evaluation of executive human resources (department
general managers) are carried out without problems• Whether investment required for governance enhancement is made without problems

Audit• Whether the internal audit department (the same system) is functioning properly

Utilization of audit results of audit results
 Utilize the results to the consideration of governance enhancement measures in each plants and the Group companies
 Utilize the results to the development of issues that should be handled by in-house companies and corporate division and to the consideration of
measures18｜2018.11.9

Contents

1. Status of Respond to the Matters of Non-Conforming Products
and of Implement of the Group Governance Framework
Enhancement Measures (P3-18)

2. Performance Summary (P20-22)
3. Progress on the Medium-Term Management Strategy (P24-27)
4. Initiatives by Segment (P29-42)
5. Recap (P44)
19｜2018.11.9

FY2019 1st Half Result (Comparison with YoY Result)Comparison
with
YoY
ResultNet sales: Net sales increased overall thanks to increased sales in the Metals Business.
Operating profit: Operating profit decreased overall as a result of a decline in the Cement Business and other businesses despite an increasein the Advanced Materials & Tools Business.

Ordinary income: Ordinary income decreased primarily due to a fall in operating profit despite an increase in dividend income.
Net income*: Net income decreased chiefly due to a decline in ordinary income.

FY2018
1st Half Result (a)FY2019
1st Half Result (b)Net sales

725.4

855.2

129.8

Operating profit

36.4

27.5

-8.8

Ordinary income

39.5

33.0

-6.4

Net income *

20.1

14.8

-5.2

153.83113.39-40.44

Dividend per share (yen)

30

40

10

Exchange rate USD (yen / $)

111

110

-1

Copper price (LME) (¢ / lb)

272

294

22

(¥ billions)

Net income per share (yen)* Net income attributable to owners of parent

20｜2018.11.9

Difference(b)-(a)FY2019 1st Half Result (Comparison with Previous Forecast)Comparison
withPrevious
Forecast

Net sales: Net sales increased overall thanks to increased sales in the Metals Business.
Operating profit: Operating profit decreased overall as a result of a decline in the Metals Business and other businesses despite an increasein the Advanced Materials & Tools Business.
Ordinary income: Ordinary income decreased primarily due to a fall in operating profit despite an increase in dividend income.
Net income*: Net income decreased largely due to a decline in extraordinary income / loss in addition to a decrease in ordinary income.

(¥ billions)

FY2019 1st Half
Forecast (a)(Announced on Aug. 7)

FY2019 1st Half
Result (b)Difference(b)-(a)Net sales

820.0

855.2

35.2

Operating profit

32.0

27.5

-4.4

Ordinary income

33.5

33.0

-0.4

Net income *

19.0

14.8

-4.1

145.08113.39-31.69Dividend per share (yen)

40

40

－

Exchange rate USD (yen / $)

110

110

0

Copper price (LME) (¢ / lb)

310

294

-16

Net income per share (yen)* Net income attributable to owners of parent

21｜2018.11.9

FY2019 Full Year Forecast
Comparison
withPrevious
Forecast

Net sales: Net sales expected to remain at the same as the previous forecast overall despite some changes in individual businesses.
Operating profit: Operating profit expected to decrease overall as a result of a fall in the Metals Business and other businesses
Ordinary income: Ordinary income expected to decrease mainly due to a decrease in operating profit.
Net income*: Net income expected to decrease owing largely to a decline in ordinary income.

Dividend: Annual dividend expected to remain the same as the previous forecast.

FY2019Forecast (a)FY2019Forecast (b)(Announced on Aug. 7)(Announced on Nov. 6)

1,660.0

1,660.001,599.5

Operating profit

67.0

53.0

-14.0

72.8

Ordinary income

79.0

64.0

-15.0

79.6

Net income *

35.0

25.0

-10.0

34.5

267.26190.90-76.36264.15

80

80

－

80

110

2

111

292

-18

292

(¥ billions)

Net sales

Net income per share (yen)Dividend per share (yen)Exchange rate USD (yen / $)Copper price (LME) (¢ / lb)* Net income attributable to owners of parent

22｜2018.11.9

2nd Half
Assumption
107
2nd Half
Assumption
310

108
310

2nd Half
Assumption110
2nd Half
Assumption
290

Difference(b)-(a)

FY2018ResultContents

1. Status of Respond to the Matters of Non-Conforming Products
and of Implement of the Group Governance Framework
Enhancement Measures (P3-18)

2. Performance Summary (P20-22)
3. Progress on the Medium-Term Management Strategy (P24-27)
4. Initiatives by Segment (P29-42)
5. Recap (P44)
23｜2018.11.9

Group-wide PolicyLong-term Management Policy
Medium-to-long-term Goals(the company in the future)

ValuesCorporate
Philosophy

Code of
Conduct

VisionGroup-wide Policy

Resources and Recycling◆ Optimization of business portfolio◆ Comprehensive efforts to increase businesscompetitiveness◆ Creation of new products and businesses

Sustainable
Development

Processed
Goods

24｜2018.11.9◆ Leading company in domestic and overseas key
markets◆ Achieving high profitability and efficiency◆ Achieving growth that exceeds the market
growth rate

Medium-Term Management Strategy
Materials

Key Strategies in FY2020 Strategy

Global Strategy

Technology andDevelopment Strategy

Marketing Strategy

HR Strategy◆ Achieve growth through innovation◆ Create value by building a recycling-oriented
society◆ Increase the company’s market presence
through investment for growth◆ Increase efficiency through continuous
improvement

Establishment of Advanced Products Company
Change of the organization

Purpose◆To integrate three productmanufacturing businesses andestablish a new in-house company◆To promote the creation of new products and businesses in product manufacturing business, establishingcross-functional organization to develop and strengthen target products and business from a long-term
perspective◆Establishing the system to appropriately respond to customer needs and contribute to customers

Business organization (As of Sep. 30)

Establishment of a new in-house company (As of Oct. 1)

MetalsCompany

Advanced Products Company

Metallurgy Div.

Planning & Administration Dept.

Mineral Resources Div.

Company Strategy Dept.

Copper & Copper Alloy Div.

Company Marketing Dept.

Governance system- To become a contact point to put
together governance cases within thein-house company and manage progressof the plan for the conduct ofgovernance.
Marketing system- To conduct marketing at common fields
and customers in three businessdivisions.

New Business
Development Dept.

Electronic Materials& Components
Company

Aluminum Division

Quality Assurance Dept.
Copper & Copper Alloy Div.
Integration

Electronic Materials &Components Div.
Aluminum Div.

New Business
Development &Promotion Division25｜2018.11.9

Transfer of part of functions

New products and businesses- To make plans for new products andbusiness within the in-house company
and conduct planning and promotion ofbusiness models.

Quality assurance andquality governance systems- To strengthen quality assurance andquality governance within the in-housecompany.

Establishment of Advanced Products Company
New products and businesses
NextGeneration
VehicleIoT
AI

Fields of new products and businesses ofAdvanced Products Company
26｜2018.11.9

Thermistors
Sensors

DBA substrate

Cutting tools for
new materials

Industries considered
Chip antennas

Copper-alloy strips
for electronic materials

Electronics

Automobile

EnergyEnvironment

Copper-alloy strips
for terminal materials

Battery cases(aluminum)

Recycling
Geothermal power generation

Recycling

Urban Mines

Clean Energy
Recycling

E-Scrap

Needs that the Company should meet

Potential new products and businesses

Next-generation vehicle, IoT and AI

Solutions for the shift of automobiles to EVs and the needs ofautomatic driving, heat management materials, sensors,antenna modules, and etc.

Building a rich, sustainable society

Recycling, renewable energy, businesses related tohydrogen-energy society, and etc.

Key Measures to Strengthen and Restructure the Business Since April 2017
Key Business Strengthening and Acquisition of Shares
Advanced Products• “Luvata Special Products Division” became a consolidated subsidiary through completion of the acquisition ofshares• "Central Japan Technical Center" was established

Metalworking
Solutions Business• “TianJin LingYun tool Design Co.,LTD.” was relocated, and improved and expanded• Tungsten recycling capacity at Japan New Metals Co., Ltd. was increased 1.5 times• “Machining Technology and Education Center in North America” was relocated, and improved and expanded * New

Metals Business• “MM Metal Recycling B.V.”, an E-Scrap sampling facility established in the Netherlands, went into operation

Cement Business• Capacity of waste plastic processing at Kyushu Plant increased 1.7 times

Other business• “KitaKyushu Ash Recycle Systems Co., Ltd.”, which is engaged in the treatment of incineration fly ash, went into
operation• “New Energy Fujimino Co., Ltd.” was established for operating a business of producing biogas from food waste• “New Business Development & Promotion Division” and “EV Material Development & Recycling Business
Promotion Dept.” were established

Common• Investment to “Incubation Alliance, Inc.”, which is involved in the development and manufacture of new
carbonaceous material “graphene”• To begin the joint development of recycling technology of cobalt, nickel and other metals with
Nippon Magnetic Dressing Co., LTD. * NewKey Business Restructuring and Sales of Shares

Metalworking
Solutions BusinessCommon27｜2018.11.9• All shares in “Hitachi Metals MMC Superalloy, Ltd.” were sold• All shares in “Mitsubishi Materials Real Estate Corporation” were sold* NewContents

1. Status of Respond to the Matters of Non-Conforming Products
and of Implement of the Group Governance Framework
Enhancement Measures (P3-18)

2. Performance Summary (P20-22)
3. Progress on the Medium-Term Management Strategy (P24-27)
4. Initiatives by Segment (P29-42)
5. Recap (P44)28｜2018.11.9

Initiatives by Segment

Advanced Products

29｜2018.11.9

Copper & Copper Alloy Products
Performance History(Advanced Products)(billion yen)
20.0

Operating profit
18.4 18.4

Ordinary income
16.6
15.1

15.0

Overview of Business◆ Mitsubishi Shindoh Co., Ltd.
● Receiving orders centering on terminal materials for automobiles andleadframes for semiconductors are strong● Capital expenditure to improve productivity is being implemented◆ Mitsubishi Cable Industries, Ltd.
● Receiving orders of sealing parts for semiconductors and automobiles
are strong● The top priority will be to implement preventive measures of the Mattersof Non-Conforming Products

10.0

5.0

0.0
FY2018FY2019Forecast◆ Luvata Group● Luvata will contribute to consolidated results as full year starting from
FY2019 and creation of business synergies will be achieved

Key Strategy: Focus on high value-added areas

ECOBRASS®▶

◆ Mitsubishi Shindoh Co., Ltd.
● Rolled products: Boost sales of terminal materials for automobiles
and MSP alloys● Extruded products: Boost sales of copper alloys and increase
sales of lead-free and free-cutting copper alloy "ECOBRASS®"
30｜2018.11.9◀Copper strips

Copper & Copper Alloy Products
Key Strategy: Business Expansion◆ Luvata Group• Mutual supply of materials among the Group• Expansion of sales of Luvata Group’s products in the Japanese market

Increased sales and market
share using the sales andmanufacturing facilities of
the Group and Luvata

LuvataMitsubishi Shindoh Co.,Ltd.

31｜2018.11.9

Electronic Materials & Components
Overview of Business◆ Electronic Materials● Strong sales of silicon materials and components for semiconductor manufacturing equipment(precision silicon products) in the first half of the fiscal year
● Impact of reassessment of capital expenditure by major semiconductor manufacturers is expectedin the second half despite the strength of the overall semiconductor market being expected toremain◆ Electronic Components● Firm sales of products such as thermistor sensors (temperature sensors) for automotive andrefrigerators● Planning capital expenditure for increasing production to meet strong demand

Key Strategy: New products and sales
expansion in the IoT - related market◆ Antenna modules
Established “Antenna Solution Center”
inside Saitama Property Management
Office (March, 2018)

three-dimensional enabled
anechoic chambers▲◆ Thermistor sensors

The world's smallest Flake-type
thermistors with long-term reliability(Sep. 2018)32｜2018.11.9

Key Strategy: New products and sales
expansion in the next-generation vehicle market◆ Insulated substrates with highthermal conductivity

Enhancement of production system anddevelopment of new products for highoutput power control inverters in response toincreased demand for the shift of automobiles to EVs◆ In-vehicle sensors
Promote the development of in-vehicle
sensors in order to enter the EV market
which is expected to grow

Aluminum◆Mitsubishi Aluminum Company, Ltd. (Rolled and extruded products)
Overview ofBusiness● Sales of sheet products for heat exchanger for automobiles, and foil products for lithium-ion
battery cases has remained strong, while sales of sheet products for beverage cans and litho
sheets decreased.
◆Universal Can Corporation (Aluminum beverage cans)● Sales of regular cans recovered thanks to strong sales of RTD beverages, etc.
* RTD (Ready-To-Drink) beverages: low-alcohol beverages (such as chu-hi) that can be
consumed directly from the can● Bottle cans decreased due to expansion of coffee in PET bottles◆ Mitsubishi Aluminum Company, Ltd.
Key Strategies:● Shift to heat exchanger sheet materials forautomobiles ⇒ Increase slitter facilities● Increase sales of foil products for lithium-ion
battery cases⇒ increase separators and slitter facilities● Establishment of a new production base for
products for heat exchangers for automobiles inNorth America with Gränges was taken back to
the drawing board.
We will, however, continue to hold discussions
with Gränges on collaboration in North America.
33｜2018.11.9◆ Universal Can Corporation
Key Strategies:● Develop and launch bottle cans with weight saving
and new shapes⇒ Establishing a new production line at Gifu Plant(operation will be started in FY2020)● Promote UBC recycling● Development overseas business⇒ Considering development
business in the Southeast Asianmarket, etc.

Initiatives by Segment

Metalworking Solutions
Business ** As of October 1, 2018, “Advanced Materials & Tools Company” has changed its name to “Metalworking Solutions Business Company.”
34｜2018.11.9

Cemented Carbide Products
Performance History(Metalworking Solutions)(billion yen)
20.0

Operating profit
18.5
16.8

Ordinary income

18.3 17.4

15.0

Overview of Business● Strong global demand for products related toautomobiles, industrial machinery, and aerospace● Revised sales prices as planned due to rising raw
material costs

10.0

5.0

0.0
FY2018FY2019Forecast

Key Strategies: Increase capacity to provide solutions● Machining Technology and Education Center in North America
was relocated, and improved and expanded (October, 2018)● Plan to establish new technical centers in Germany and India● Currently increasing sales engineering human resources forembodying solution sales

35｜2018.11.9

MMC Technical Centerin North Carolina

Cemented Carbide Products
Sales Trend by Industry (billion yen / year)
Aerospace

Automotive(billion yen)(billion yen)

10.0

40.0

YoY +23%

5.0

MedicalMold & Die(billion yen)YoY +12%(billion yen)

2.0

YoY +39%

30.0

YoY +6%

30.0
20.0
20.0

1.0
10.0

10.0
0.0

0.0

(FY)

2017

2018

2019

Result Result Forecast

0.0

(FY)

2017

2018

2019

Result Result Forecast

(FY)

0.0
2017

2018

2019

ResultResult Forecast

(FY)

2017

2018

2019

Result Result Forecast

Creation of synergies between Mitsubishi Hitachi Tool Engineering and Mitsubishi Materials

Basic
Activities

Provision of Marketingand Solutions by the
Aerospace Dept.

Selection of key accounts and launch of full-scale expansion activities

Establishment and promotion of new brand, DIAEDGEFY2018Establishment of the Central Japan Technical Center
Development of asystem for
improving
responsivenessRelocation and expansion of Machining Technology and Education Center in the US(from Chicago to North Carolina)
Research on demand for EVs

Establishment of a specialized
team in the US

Enhancement of capacity of tools for processing components

36｜2018.11.9

Establishment and promotion of
new brand, MOLDINO

M&A research

FY2019M&A research

Key Activities

Development of industry-specific products

Establishment of Shizuoka Sales Office

Regional expansion of solution service
methodInitiatives by Segment

Metals Business

37｜2018.11.9

Mining
Performance History(Metals)(billion yen)

Operating profit

Overview of Business◆Dividend income

Ordinary income● Expecting to receive 13.3 billion yen,
1.0 billion yen less than the previous
fiscal year

30.0
25.4
25.0

◆Investment for copper mines

20.0

14.4

15.0

● Continue to develop new mines aiming for stableprocurement of copper ore● Continue to consider acquisition of new mining stakes

12.7

10.0
5.2

5.0

Los Pelambres Mine
(Chile)0.0
FY2018Key strategy: Develop new projects

FY2019Forecast

Dividends from Copper Mines & Copper Price
Dividends from copper mines (billion yen, left axis)

50.0

500

Copper price (¢/lb, right axis)

40.0

400

30.0

300

20.0

200

10.0

100

0.0

0
05/3

38｜2018.11.9

07/3

09/3

11/3

13/3

15/3

17/3

19/3
Forecast● To promote the Zafranel project in Peru
→ Aim to complete F/S in FY2019● Continue to consider acquisition of new mining stakes→ Considering development of new mines utilizing technology
built up in copper smelting and refining businessLong-term controlled
volume ratio target

Approx. 50%(early 2020s)* Controlled volume ratio: The ratio of the volume of ore according to mining interests plus thevolume under off-take agreements

Smelting
Overview of Business◆ Status of operation at smelters● Naoshima Smelter & Refinery, Onahama Smelting and Refining Co.,Ltd.
and PT. Smelting plan a high level of operations● Large-scale periodic repairs in FY2019 are planned at PT. Smelting
and Naoshima Smelter & Refinery (second half)

Gresik Copper Smelter and Refineryof PT. Smelting (Indonesia)

MM Metal Recycling B.V.
(Netherlands)◆ Recycling (E-Scrap)● The E-Scrap recycling facility in the Netherlands began operation, recycling capacity has increased toapprox. 160,000 tons a year
History of E-scrap treatment capacity (Naoshima & Onahama)● Operation of the E-Scrap recycling facility in
the Netherlands will be increased to fullcapacity treatment (operations began in Feb. and thethousand tons

200

E-Scrap160

Key strategy: Increasing E-Scrap recycling

completion ceremony was held in Sep. 2018)120⇒ Capacity increased 20,000 tons,
to 160,000 tons

80

● Considering additional investment fromFY2020, aiming to increase capacity40
009/3 10/3 11/3 12/3 13/3 14/3 15/3 16/3 17/3 18/3 19/3
Forecast

39｜2018.11.9

Initiatives by Segment

Cement Business

40｜2018.11.9

JapanPerformance History(Cement)(billion yen)
25.0

Operating profit

Overview of Business◆Trends of demand● For FY2019, domestic demand assumption of the Company is42.5 million tons, which is unchanged from the forecast at the
beginning of the fiscal year (YoY+1.5%)

Ordinary income

21.0
19.4

20.0

15.1

15.0

◆Sales price

15.5● Sales price optimization (up 1,000 yen / ton) due to anincrease in the purchase prices of thermal energy, electricity,
consumables, and transportation fuel● Tenaciously continuing explanation and negotiations

10.0
5.0

◆Waste disposal processing & Recycling

0.0
FY2018FY2019Forecast

Demand history (Domestic / Export)
Million tons

70

14
Domestic trend (left axis)

60

Exports (right axis)

12

50

10

40

8

30

6

20

4

10

2

0

0
07/3

09/3

41｜2018.11.9

11/3

13/3

15/3

17/3

19/3

● Continuing the raise of coal ash processing prices in view of themarket conditions● Reduced acceptance volume due to the torrential rain and a lotof typhoons● Making maximum efforts to accept waste related natural disasters
such as earthquakes and torrential rains

Key Strategy: Fortifying the domestic foundation forcompetitiveness●Capacity of waste plastic and wood chips processing increased⇒ Capacity at Kyushu Plant increased 1.7 times(operations began in Feb. 2018)●Supply system⇒ Establish optimal production and logistics systems in responseto changing demand

Forecast(Source: Japan Cement Association, forecast at the beginning of the fiscal year)

United States
Overview of Business◆ Trends of demand (Southern California Area)● Demand has continued growing in the region, driven by demand for private
housing and non-residential in the private sector◆ Trends of sales● The price of cement was raised additionally from April by Mitsubishi
Cement Corporation (MCC)● Robertson's Ready Mix, Ltd. (RRM) also tends to raise the price of readymixed concrete due to strong demand
Demand history for cement in Southern California
thousand tons

12,000(Source: PCA)

Domestic Products

Import Products

Ready-mixed concrete
plant of Robertson's Ready
Mix, Ltd.

Key Strategies: Expansion of the US
business◆ Robertson's Ready Mix, Ltd.

10,000● New ready-mixed concrete plant in Simi Valley,
northwest of Los Angeles, plans to go into
operation (in second half of FY2019)

8,000
6,000
4,000

● Systematically promote expansion of existing
mines and acquisition of new mines with aim of
securing aggregate resources

2,000
0
95 97 99 01 03 05 07 09 11 13 15 17 19 21
42｜2018.11.9

Forecast

Contents

1. Status of Respond to the Matters of Non-Conforming Products
and of Implement of the Group Governance Framework
Enhancement Measures (P3-18)

2. Performance Summary (P20-22)
3. Progress on the Medium-Term Management Strategy (P24-27)
4. Initiatives by Segment (P29-42)
5. Recap (P44)43｜2018.11.9

RecapThorough Enhancement andPromotion of Group Governance

To Ensure Implementation ofeach Measures in the MediumTerm Management Strategy

Genuine Excellent Company

44｜2018.11.9

◆ For further information, please contact at:◆
Mitsubishi Materials Corporation
IR Dept., Finance & Accounting Dept., Corporate Strategy Div.
3-2, Otemachi 1-chome, Chiyoda-ku, Tokyo, 100-8117, Japan
E-mail: ml-mmcir@mmc.co.jp
URL: http://www.mmc.co.jp/corporate/en/

These projected performance figures are based on information available to the Company’s
management as of the day for releasing this material.
There are many uncertain or risk factors inherent in projections, and there might be cases inwhich actual results materially differ from projections of this material.

45｜2018.11.9

Note

46｜2018.11.9