Investor Meeting
Mitsubishi Materials Corporation

May 14, 2015
Akira Takeuchi, President

Cemented carbide toolContents

1. Message from the President (p 3–6)
2. Progress on the Medium-Term Management Plan (p 7–11)
3. Initiatives by Segment (p 12–15)

4. Recap (p 16)

2

1. Message from the President (Management Trajectory)
FY09–11: Following the Lehman shock, introduced comprehensive management measures tostrengthen the corporate constitution
FY12–14: Twin focus on growth strategy and enhancement of financial position
FY15–17: Aim for sustained growth and fortify the foundation for growth
140 Operating margin
120(Right axis, %)Conversion of
RRM in the U.S.
to a subsidiary

100% ownershipof RRM in theU.S.

100 Operating profit
80

Redemption ofSUMCO preferredstock, sale of somecommon stock(Left axis, billions of yen)

60
40

Conversion of
Hitachi Tool
Engineering to asubsidiary

100.1
78.7
57.2
35.1

20

52.2

52.5

66.2

71.8

FY2006

FY2008

Record results(sales and eachprofit category)

FY2009FY2010100.0Strategic investmentof ¥100 billion

12.6
FY200785.0

FY2011 FY2012

FY2013

FY2014FY2015Comprehensivemanagement measures(cost reductions)

Acquired “A-” credit rating (JCR)

FY2016 FY2017
Forecast Plan
Profits and dividends
expected up for fourthconsecutive year

ROA (ordinaryincome base)
Net D/E (times)

6.3%

7.5%

2.2%

- 0.5%

3.1%

2.4%

4.2%

4.3%

4.4%

4.8*%

6%

1.5

1.3

1.7

2.1

2.0

1.8

1.6

1.3

1.0

0.9

<1Dividend pershare (yen)

6.0

8.0

4.0

0

2.0

2.0

4.0

6.0

8.0

10.0

TBD

3

1. Message from the President (Long-Term Management
Policy and Medium-Term Management Plan)Long-Term Management Policy: Overview (Policy towards early 2020s)

VisionWe will become the world’s leading business group committed tosupporting recycling-oriented society through materials innovation, withuse of our unique and distinctive technologies
Image for scale of operations

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

Medium-term Management Plan: Overview (FY2015–FY2017)
Materials Premium 2016 —Challenge to become the world’s leading business group—

Growthstrategy●Fortifying thefoundation for growth●Strengthening global
competitiveness●Pursuing a recycling-basedbusiness model

FY2014FY2017

 Operating profit¥66.2 billion

 Ordinary income¥76.9 billion
4.3%¥100 billion¥110 billion
6%

1.3 times

1.0 time or lower

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

41. Message from the President (Basic Policy)

Basic Policy
To carry forward the measures pursued over a five-year period by
the former president, Hiroshi Yao, who worked to strengthen
management foundations, promote a growth strategy andthoroughly introduce safety and CSR measures, as well as to further
develop and strengthen these measures.

Topmost Priority
Certain achievement of medium-term management plan targets

51. Message from the President (Topmost Priority)

Certain Achievement of Medium-Term Management Plan Targets

Medium-Term Management PlanMaterials Premium 2016 —Challenge to become the world’s leading business group

Growthstrategy

Fortifying the foundation for growth
Strengthening global competitivenessPursuing a recycling-based business model・Pursuing even swifter and certain growth strategies
・Implement appropriate measures through PDCA management ofprogress on the medium-term management plan・Reform corporate culture and revitalize human resources62. Progress on the Medium-Term Management Plan
(Looking Back on the First Year)
FY2015 Comparison with
Initial Forecasts
1,517.2

1,500.0(Billions of yen)

110

Operating profit
Ordinary income
Net income

9084.081.0

74.0◆Ordinary income
Initial forecast: ¥84.0 billion→ Actual: ¥81.0 billion

71.8

70
56.1
50.0

5030

FY15 Initial Forecast

1,700 ◆Changes in major assumptions
Initial
FY2015
forecast
actual
1,500 Copper price310￠297￠
USD
¥102
¥110
Demand for cement in Japan 48m t
45.5m t1,300 Dividends from copper mine ¥12.6 billion ¥11.9 billion
SUMCO’s equity-methodinvestment gain
¥2.2 billion ¥4.2 billion

Primarily because sales volumes of cement and ready-mixed
concrete in Japan and the United States were not achieved,fell short by ¥2.9 billion.
(Cement: - ¥7.2 billion; Metals: - ¥4.0 billion;
Advanced Materials & Tools: + ¥2.3 billion;
Electronic Materials & Components: + ¥2.5 billion)

FY15 Actual

7

2. Progress on the Medium-Term Management Plan
(Outlook for the Second Year)◆Changes in major assumptions

FY2016 Performance
Forecasts
1,580.01,600.0

1,7001,517.2(Billions of yen)

1,500
Operating profit

110

110.0

Ordinary income
100.0◆Ordinary income: FY2015 → FY2016 + ¥11.0 billion
・Cement:+6.6 billion (North American businessexpansion, etc.)
・Metals:+10.9 billion (TCRC* improvements,lower depreciation, etc.)
・Advanced Materials +3.5 billion (Increased sales,& Tools:consolidation of Hitachi Tool
Engineering, etc.)
・Electronic Materials: 0 billion (Increased operation at
Yokkaichi, etc.)
・Aluminum:-2.5 billion (Higher materials
prices, etc.)
・Others:-7.3 billion (Increased maintenancecosts at non-operational or abandoned
mines, etc.）

92.0
90

85.0

81.0
71.8
705030

FY15 Actual

FY16 Forecast

1,300

FY2015FY2016
actualforecast
Copper price297￠
270￠
USD
¥110
¥118
Demand for cement in Japan 45.5m t
46m t
Dividends from copper mine ¥11.9 billion ¥10.5 billion
SUMCO’s equity-method
investment gain
¥4.2 billion ¥3.0 billion

FY17 MediumTerm Plan

*TCRC=Treatment Charge, Refining Charge

82. Progress on the Medium-Term Management Plan
(Outlook for the Third Year)◆Changes in major assumptions

Strategies for Reaching
FY2017 Targets
1,580.01,600.0

1,700Copper priceUSD

1,517.2
1,500(Billions of yen)

110110.0

Operatingprofit
Ordinaryincome

100.0
92.0
85.090◆Ordinary income FY2016 → FY2017 + ¥18.0 billion
Cement: ・Higher income from waste treatment
・Strengthen North American cement business
Metals: ・Purchase condition improvement
・Expanded e-scrap processing
Processing: ・Higher sales of cemented carbide products
・Impact of acquiring Hitachi Tool

81.0

Electronic materials: ・Increased sales of products in
Advanced Materials Div. andElectronic Components Div.
・Organic growth at SUMCO

71.870

Aluminum: ・Expanded heat-exchanger operations
・Overseas development of bottle cans

5030

1,300

FY2016FY2017
forecast Medium-Term Plan
270￠
300￠
¥118
¥100

FY15 Actual

FY16 Forecast

FY17 MediumTerm Plan

9

2. Progress on the Medium-Term Management Plan (Groupwide Growth Strategy)
Fortifying thefoundation for growth• Enhancing safety management systems and securing stable operations• Strategic investment (M&A, etc.) to embody sustainable growth• Improving financial position continuously (raising profitability through businessselection and focus)
Status of Strategic Investment (¥100 Billion) and Major Investment Projects
ProjectStatus

Acquisition of Hitachi Tool Engineering

April 2015: Began operations as Mitsubishi
Hitachi Tool Engineering

New electronic components plant in
LaosFebruary 2015: Completed construction

New aluminum heat exchanger plant inIndia

2H 2015: Operations slated to commence

Mine investment in Zafranel (Peru)

2014: Start of pre F/S10

2. Progress on the Medium-Term Management Plan
(Group-wide Growth Strategy)
Progress on improving thefinancial position(Billions of yen)
BSInterest-bearing debt

In January 2015, credit rating upgraded from “BBB+” to “A-” (JCR)
FY2015 ActualPLFY2017 Plan630.8

580.0650.01.00.9< 1.0

Operating cash flow

108.0

120.0

－

Investing cash flow

(42.3)(85.0)－

Free cash flow

65.735.0－

Operating profit

71.8

85.0

100.0

Ordinary income

81.0

92.0

110.0

Net income

56.1

65.0

－

Net D/E ratio
CFFY2016
Forecast

Future financial strategy directions
Accelerate investment
in growthStrengthen thefinancial structure

Maintain stable dividends inaccordance with performance11

3. Initiatives by Segment (Cement)
Performance (Cement)

Japan(Billions of yen)40302035.0 35.0

Adjust exports flexibly in response tochanges in demand23.9 23.3
17.3 16.7◆Promote high-value-added industrial
waste processing

100

FY15 Actual◆Respond flexibly to demand in Japan

FY16 Forecast

Operating profit

FY17 MediumTerm Plan

Boost earnings by increasing acceptance ofdifficult-to-process waste

Ordinary income◆Set a fair price
Adjust prices through ongoing measures

NorthAmerica
Long Beach Terminal◆Expand cement supply capabilities
Properly cope with the tight supply-demand balance◆Further expand ready-mixed concrete business
Establish/acquire new plants, secure aggregate materials

Emerging ◆Consider new business developmentsMarkets
RRM Ready-Mixed
Concrete Plant

Continue to consider candidate regions andways to penetrate markets

123. Initiatives by Segment (Metals)
Performance (Metals)

Mining◆Embarking on new mine development
In pre F/S at Zafranel (Peru)(Billions of yen)
50

43.7
34.4

40

32.8
30

40.0
30.0

24.8

20
10Smelting◆Improve purchase conditions
In addition to yen depreciation, continuous
improvement of the smelting margin0
FY15 Actual

FY16 Forecast

Operating profit

FY17 MediumTerm Plan

Ordinary income◆Expand the recycling business operations
Aim to become the world leader in
e-scrap processing volume
Increase domestic sales percentage forcopper slag

Copper◆Expand sales in the volume zone inprocessing
emerging countries

E-Scrap

Promote sales expansion by leveraging
new alloy, “MNEXⓇ”◆Expand sales of ECOBRASS® lead-freebrass rods
Leverage strength and anti-wear properties toexpand sales in automotive parts market

Automotive terminalmaterials (copper strip)13

3. Initiatives by Segment (Advanced Materials & Tools)
Performance (Advanced Materials & Tools)(Billions of yen)25
20.4 20.0
2023.0 23.0

16.7 16.5

Cemented◆Expand overseas locations
carbideSales and production locations, technical centers◆Strengthen sales capabilities with industryspecific teams

1510

Drive growth with individual strategies, taking
automotive, aircraft and medical as target industries

50
FY15 Actu al

FY16 Forecast

Operating profit

FY17 MediumTerm P lan◆Augment ability to provide solutions
Enhance cooperation among technical bases(currently, five locations)

Ordinary income

Planned expansion of cemented carbide productsales locations (FY15–17)
EasternEurope

ChinaIndia

New sales
network
Existing sales
companies

SoutheastAsiaSouthAmerica143. Initiatives by Segment(Electronic Materials & Components, Aluminum)
ElectronicMaterials &Components◆Develop unique, major new products
World’s thinnest flexible thermistor sensor(electronic components)

World’s first fluorine compound with hydrophilic
oil-repellent characteristics(Mitsubishi Materials Electronic Chemicals Co., Ltd.)

Performance (ElectronicMaterials & Components)(Billions of y en)

87654
32
10

7.0
6.0

4.8

4.4

FY15 Actu al◆Silicon business (SUMCO)

7.2

7.2

Operating profit

FY16 Forecast
Ordinary income

FY17 MediumTerm P lanRedemption of all preferred stock, sale of somecommon stock held by the Company(For foreseeable future, maintain as
equity-method affiliate)
Performance (Aluminum)(Billions of y en)
108.0

8Aluminum◆Expand overseas business
Expand overseas locations forheat-exchanger materials
New company in India (manufacturing extruded multi-hole tubes)
to become operational in 2H FY16

Strengthen overseas development of bottle cans

7.0
6

5.6
5.1
3.54

2.6

20

FY15 Actu alOpe rating profit

FY16 Forecast

FY17 MediumTerm P lan

Ord inary in co me154. Recap◆Certain achievement of medium-term management plan targets
Continue financial constitutional improvement along with bold strategic
investment for sustained growth, and strengthen the basis for growthMaterials Premium 2016
Challenge to become the world’s
leading business group
For further information, please contact:
Mitsubishi Materials Corporation
Keidanren Kaikan, 1-3-2, Otemachi, Chiyoda-ku, Tokyo 100-8117, Japan
E-mail: ml-mmcir@mmc.co.jp
URL: http://www.mmc.co.jp/corporate/en/index.html
These projected performance figures are based on information available to the Company’s management as of the dayfor 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.

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