Mitsubishi Materials Corporation
Investor Conference Material

May 15, 2018

Akira Takeuchi, President
Mitsubishi Materials Corporation

1｜2018.05.15

Contents

1. Respond to the Matters of Non-Conforming Products (P3-18)

2. Performance Summary (P20-22)
3. Progress on the Medium-Term Management Strategy (P24-29)

4. Initiatives by Segment (P31-43)
5. Recap (P45)

2｜2018.05.15

Overview of the Matters of Non-Conforming Products
Products

Number ofcustomers

Details

Sealing parts

218

Rewriting of inspection records data, non-inspection, etc.

MEXCEL®

5

Rewriting of inspection records data, etc.

Brass strips andcopper strips

30

Rewriting of inspection records data, etc.

Rolled products

8

Rewriting of inspection records data, inadequate testing
method, etc.

Extruded products

114

Rewriting of inspection records data, inadequate testing
method, etc.

Tachibana Metal
Manufacturing Co.,Ltd.

Extruded products

339

Rewriting of inspection records data, inadequate testing
method, etc.

Diamet Corporation

Sintering machineryparts, etc.

113

Rewriting of inspection records data, non-inspection,etc.

Company name

Mitsubishi Cable
Industries, Ltd.

Mitsubishi Shindoh
Co.,Ltd.

Mitsubishi AluminumCo., Ltd.

Total

3｜2018.05.15

762 ** Excluding overlap between subsidiaries

Results of Extraordinary Quality Audit

Overview of Extraordinary Quality Audit◆ Implementation period: February to May 2018
◆ Audited period:
January 1, 2017 to December 31, 2017
◆ Audited locations:
Manufacturing locations of the Company and
the Group companies (119 locations)

Results of Extraordinary Quality Audit◆ In cases where matters with quality control methods, etc. wereidentified in the audits, corrective action has already been taken.
◆ There were no confirmed cases of issues with product quality.

4｜2018.05.15

Safety Confirmation Status
As of May 9, 2018
Products

Number ofcustomers

A

B

C

Ｄ

Sealing parts

218

201

17

0

0

MEXCEL®

5

3

2

0

0

Brass strips andcopper strips

30

29

1

0

0

Rolled products

8

7

1

0

0

Extruded products

114

40

74

0

0

Tachibana Metal
Manufacturing Co.,Ltd.

Extruded products

339

129

200

10

0

Diamet Corporation

Sintering machineryparts, etc.

113

33

33

47

0

Company Name

Mitsubishi Cable
Industries, Ltd.

Mitsubishi Shindoh
Co.,Ltd.

Mitsubishi AluminumCo., Ltd.

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

5｜2018.05.15

Measures to Address the Matters of Non-Conforming Products
Final report from Special Investigation Committee
In terms of results, given the fact that the Company
failed to discover and remediate the misconduct
earlier, measures based on the understanding thattransforming the corporate culture and strengthening
governance is necessary, has to be stated thattimeliness of required reactions was insufficient insome ways.

Need to work on recurrence prevention byenhancement of the group governance, etc.
including quality control with further enhanced
sense of crisis and in a more timely manner

Measures to Address the Matters of
Non-Conforming Products(i) "Preventive measures" at the company where have the Matters of Non-Conforming
Products(formulated from December 2017 to March 2018)(ii) “Restructuring Measures of the Governance Framework for Quality Control in theGroup”(formulated December 2017)(iii) “Governance Framework Enhancement Measures of the Group”(formulated March 2018)(iv) "Committee for monitoring of measures to enhance governance"(established May 10, 2018)(v) “Committee for nomination and compensation”(plan to establish on June 22, 2018)6｜2018.05.15

Preventive measures of the Matters of Non-Conforming Products
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

7｜2018.05.15

Preventive measures of the Matters of Non-Conforming Products
Preventive measures of the Matters of Non-Conforming Products (1/3): Tasks already implemented: Tasks being or to be implemented

Implementation schedule
Name of measures

1) Implementation of a front loading
system (FLS) for order receiving
We will implement a system (FLS) for making
decisions on specifications and receiving
orders after considering whether the order canbe accepted taking into accountmanufacturing capability at each departmentin the business division.

Outline of measures◆Establishment and wide dissemination ofguidelines◆Confirmation of operation status

FY2019FY
2018First half

Establishment
and widedissemination of
FLS guidelines- Review of FLS
guidelines

Second half

Subsequent fiscal year

- Confirmation (during quality audits) and periodic review of FLS operation status- Strengthening DR when making quotations- Accumulation of technical data
◆Primary preventive measures for quality
issues at 5 affected companies- Establish a structure to deliberate from the design
development stage- Reconsideration of order receiving determination process and improvementof operation◆Confirmation that independence ofquality assurance function in eachbusiness organization is ensured◆Confirmation of area of responsibility andstatus of fulfilment at quality assurance
department in each businessorganization
2) Enhancement of the framework andauthority of the quality control
department
Centered on the Governance Division and the
Quality Management Department, we will
establish a framework aimed at improving
quality control for the Group and will construct
the required quality control function for eachbusiness and product.

Investigation- Confirmation- Formulation of
improvement
measures- Confirmation of operation status during quality audits- Review of framework / authority and training- Change of organization of quality assurance departments- Increase in quality assurance-related human resources- Formulate the policy of quality control- Enhancement of the independence of quality assurance
department and ensuring the authority of shipment◆Primary preventive measures for quality
issues at 5 affected companies- Strengthening of system and equipment for
inspection before shipment- Review of quality assurance standards and construct quality control system- Strengthening of the quality and quantity of human resources for Quality Assurance Department

8｜2018.05.15- Rotation

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 or to be implemented

Implementation schedule
Name of measure

Outline of measures◆ Provision of quality training to relevant
employees at locations in Japan andoverseas3) Expansion of quality training
We will have all our employees understandthe importance of quality and what should bedone to maintain and improve quality. We will
establish a practical training systemcorresponding to each group company’sbusiness.

FY2019FY
2018- Training
preparation

First half
- Training
provision- Follow-up and review of training content- Compliance training- Education using materials based on this matter◆ Primary preventive measures for quality
issues at 5 affected companies- Leadership meetings for managers- Improvement and enhancement
the function of the Company's
enterprise system◆ Promotion of automated inspection
equipment (3 years)
4) Promoting automated inspection
equipment
By promoting initiatives such as automatedacquisition of inspection data and uploading
inspection data into manufacturing control
systems, we will aim to prevent misconduct,
including the rewriting of data.

Second half

- Collection andcollation ofdata- Skill support training for leaders ofworkplace- Confirmation of progress in promoting automated inspection equipment- Sharing information and applying within the Group- Introduction of the inspection equipment for automated- Automated uploading to the Company's enterprise system◆ Primary preventive measures for quality
issues at 5 affected companies- Introduction of the latest technology for measurement
and automatedContinuation- Improvement of issuance system forcertificate of analysis- Compilation of database for product specification- Automated collecting of inspection data

9｜2018.05.15

Subsequent fiscal year

Preventive measures of the Matters of Non-Conforming Products
Preventive measures of the Matters of Non-Conforming Products (3/3): Tasks already implemented: Tasks being or to be implemented

Implementation schedule
Name of measure5) Enhancement of quality audits
We will aim to establish more robust quality
audits by measures such as improving theindependence of our Group’s internal audit
departments and strengthening their authority
and increasing the frequency of quality audits.

Outline of measure

FY2019FY
2018First half

◆ Review of checklist for quality audits- Establishment◆ Implementation of quality audits of all
affected locations requiring quality audits- Planning andpreparation

Second half

From next fiscal year

- Review as necessary after establishment- Implementation of quality audits◆ Implementation of quality consultant
guidance meetings6) Utilization of outside consultants
In order to introduce a third-party perspectiveon quality control, we will utilize outside
consultants specializing in quality control on
an ongoing basis.

10｜2018.05.15- 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 measures to prevent a
recurrence of quality issues at 5 affectedcompanies

Group Governance Framework Enhancement Measures
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

* We plan to announce the progress of Group Governance Framework Enhancement Measures through opportunities such as Investor Conference.

11｜2018.05.15

Group Governance Framework Enhancement Measures
Group Governance Framework Enhancement Measures (1/4): Tasks already implemented: Tasks being or to be implemented

Implementation schedule

Name of measure

FY2019Outline of measureFirst half

Subsequent fiscal year
Second half

Establishment of Governance Division

1

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

Establishment of provisions
on the reporting framework /content
Formulationof annualplan

Enhancement offramework fordiscussion, andreporting of governancerelated matters◆Formulation of annual plan
regarding governanceenhancement◆Restructuring of the Group’s
internal reporting framework
regarding initiatives on
governance-related matters◆Redesign of matters to bereported and discussed atmeetings of Corporate Strategy
Committee and Board of
Directors including in-housecompanies and subsidiaries

Investigation andanalysis of corporate
management at
subsidiaries

Consideration of outline of the Group
Governance Policy (GGP)

Enhancement measures of governance of subsidiaries

Design and development of PDCA cycle for risk
management(including development of the Group Risk
Management Policy (GRP))

Promoting implementation of risk
reduction measures and managementof progress

Introduction of Group risk management

12｜2018.05.15◆Apr.
Deliberative
Council◆Holding of Group Governance
Deliberative Council andmonitoring

Continued operation and monitoring

Introduction of GRP to subsidiaries,
evaluation and improvement after
introduction

Holding of Group Governance Deliberative Council and monitoring●August ◆Sep.
●May
Progress Monitoring
Progressannouncement announcement

◆Feb.
●Nov.
●Feb. Deliberative
Progress
Progress Council
announcement announcement(Progress report at Corporate Strategy Committee meeting each month)

Continued operation and monitoringGroup Governance Framework Enhancement Measures
Group Governance Framework Enhancement Measures (2/4): Tasks already implemented: Tasks being or to be implemented

Implementation schedule
Name of measure

FY2019Outline of measureFirst half
Implementation of management executives
training◆Training on governance-related
matters for executives of eachGroup company◆Familiarizing of reporting
system for risk management
and risk information

13｜2018.05.15

Subsequent fiscal year

Implementation of explanations and training on governance of subsidiaries and risk management- Leadership meetings by top of management -Implementation of training on quality control

Continued implementation of investigation regarding corporate culture and complianceawareness
◆May
◆Jul.
◆Oct.
◆Jan.
Investigation
Investigation
Investigation
Investigation

3
Improvement of humanresources training andencouragement of active
interaction

Second half

◆Encouragement of active
interaction of human resources
between departments, between
parent company andsubsidiaries and withinsubsidiaries◆Human resources training
throughout the Group

Consideration of human resources
measures to encourage active interaction(In conjunction with consideration ofoutline of GGP)

◆Transformation of Corporate
Culture- Organization with good andhealthy communication where
employee can be unrestrictedcommunication -Communication in small group activities(compliance and workplace activation)

Continued implementation of investigationof corporate culture and complianceawareness

Introduction 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

Continued implementation of various
measures
Transformation of awareness among managers through leadership meetings(compliance training and creation of workplace with good communication)

Group Governance Framework Enhancement Measures
Group Governance Framework Enhancement Measures (3/4)- Aiming to Be a Organization with Good and Healthy Communication where Employee Can Be Unrestricted Communication FY2019
TargetName of measure

Description and Remarks
First half

Top level of management -President

Leadership
meetings(to be held
continuously)◆ Meetings with the presidents of the group companies and general managers of thelocations of the Company by the President◆ Grouping persons from different business divisions to eliminate the sectionalism mindset

Presidents ofthe groupcompanies◆ Expansion from the presidents of the Group companies to the
management executives at each company (General managers andhigher class + presidents of indirectly owned subsidiaries)◆ Expansion from executive officers at each company to generalmanagers and then employees◆ Expansion from president of indirectly owned subsidiaries tomanagers at each company and then employees

Generalmanager of
each location◆ Expansion from general managers of locations to managers and thenemployees

All manager levels

Dialogues from executive vicepresident and managing
executive officer

Front
line

Implementation of small group
activities

Compliance workshop

14｜2018.05.15

Second half

◆ Endeavoring to deepen communication through lectures, direct dialogues andworkshops provided to managers of subsidiaries and each locations◆ Group training provided by a specialized agency (outside resources)◆ Workshop that uses the Matters of Non-Conforming Products in theGroup as a case study◆ Targets are managers level in business locations◆ Implement autonomous and continuous workshops using small group activities◆ Foster the sense of a compliance mindset◆ Improve communication in and between workplaces- Transformation of leadership mindset (foster the sense of a risk
management)
1) Report on the backgrounds, progress of implementation andpolicies of respond for the Matters of Non-Conforming
Products
2) Educate the importance of responsibility of the top ofmanagement
3) Explain the meaning of restructuring the governance system
4) Discuss of important issues and solutions regarding
governance at each company or location
5) Have management play the role of instructors to deepen
their understanding- Foster the sense of a mindset that management and managers
listen to the voices at workplace and respond sincerely- Enhance the support for expansion from the presidents at theGroup companies and general managers at locations (Dispatcha facilitator as required)- Close the gap between the head office and workplace throughdirect communication- Report on the backgrounds, progress of implementation andpolicies of respond for the Matters of Non-Conforming Products
to foster the senses of ownership and crisis, aiming to transformof awareness among managers- Create a sense of ownership based on the recognition of thecurrent situation of their own organization and ask how theywould like it to change- Repeatedly convey the Matters of Non-Conforming Products in
the Group as a case study to prevent weathering- Enhance support by dispatching inside or outside facilitators as
requiredGroup Governance Framework Enhancement Measures
Group Governance Framework Enhancement Measures (4/4): Tasks already implemented: Tasks being or to be implemented

Implementation schedule
Name of measure

Outline of measure

FY2019First half

4Internal audit
strengthening◆ Implementation ofmanagement audits◆ Implementation of quality
audits(70-80 locations / year and2 year cycle)

Development offramework foraudited locations,
themes andprocedures

Second half

Implementation of management and quality audits

Examinatio
n of audit
themes,bases andprocedures

Formulation of audit plan fornext fiscal year

Trial
audits◆ Joint audits with Corporate
Auditor

5

Studies with abusiness
optimization focus

15｜2018.05.15◆ Consideration of businessportfolio incorporating
governance perspective

Implementation of joint audits with Corporate Auditor

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

Implementation of management andquality audits (continued)

Establishment of New Committees
Committee for monitoring of measures to enhance governanceCommittee for nomination and compensation

Purpose

PurposeTo supervise the progress of the Group Governance
Framework Enhancement Measures, including quality
control, from a standpoint that is independent from theexecutive organs of the Company

To guarantee the transparency and objectivity of judgment on theelection and removal of directors and executive officers of theCompany and judgement of remuneration by the Board of
Directors

Composition

Composition

Mariko Tokuno, External director
Hiroshi Watanabe, External director
Kazuaki Takenaka, Executive Vice President, Executive Director,
Japan Management Association

Mariko Tokuno, External director
Hiroshi Watanabe, External director
Hikaru Sugi, External director
Naoki Ono, Director and Executive Vice President
Yasunobu Suzuki, Director and Senior Managing Executive Officer

DutiesMatters for deliberation(i) Confirmation and supervision of progress of each measures(ii) Reporting the results of (i) above to the Board of Directors, andprovision of advice and proposals to the Board of Directors on
action to address issues based on the results

To deliberate the following matters and to recommend to theBoard of Directors(i) Policy and standard for the election and removal of directors
and executive officers and proposal of candidates(ii) Succession plan of management executives including thePresident(iii) Systems and levels of remuneration of Directors andExecutive Officers(iii) Other matters incidental to the foregoing

Date of establishment
May 10, 2018

Date of establishment
June 22, 2018
(Date for ordinary general meeting of shareholders)

16｜2018.05.15

Monitoring of Governance Enhancement Framework

Committee for monitoring of measures
to enhance governanceCommittee for nomination andcompensation

The Committee will confirm and supervise theprogress of the governance enhancement
measures and report the results to the Boardof Directors and will also provide advice andproposals to Board of Directors on action toaddress issues, etc.
It will also monitor any performance andachievements of internal directors related tothe measures.

The Committee will deliberate matters suchas the policy and standard for the election
and removal of directors and executive
officers and proposal of candidates,
succession plan of management executives,and systems and levels of remuneration
based on information obtained from theCommittee for monitoring of measures toenhance governance, and will recommend to
the Board of Directors.
As an important organ for enhancement of
the Company’s corporate governanceframework, the Committee will responsibly
fulfil its important role with respect todecisions on the election and removal of
directors and executive officers and systemsof remuneration.

17｜2018.05.15

Promotion Framework for Governance Framework Enhancement
Recommend

Report, advice,proposal

Board of Directors
Consultation

Committee for Monitoring of Measures toEnhance Governance <New>
Provision of
information

Report1

Governance Deliberative Council<New>

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.

Corporate Auditor- Checking of progress,
supervision andguidance

President(Chairman)

Report on performance of
operations (Quarterly)- Checking of progress ofenhancement measures, etc.,
supervision and guidance

18｜2018.05.15

4

Executive officers responsible
for corporate division
Management audits,quality audits, support

Business
locations of theCompany

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

2

Group
companies

Governance Division <New>
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.

32
Enhancement of framework fordiscussion, and reporting ofgovernance-related matterscollaboration

Report on performance of operations (monthly)- Progress and achievements of enhancement measuresin the Group

Report of progress,
confirmation

1

Supervision of establishment andimplementation of enhancement
measures, etc.

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

Corporate Strategy
Committee

Propose

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

Improvement of functions ofmanagement divisions and theircollaboration with operating
divisions

Corporate Strategy
Division3

Human Resources& General Affairs
Division
Technology
Division

54
Improvement of humanresources training andencouragement of active
interaction

5

Internal audit
strengthening

Studies with a business
optimization focus

Contents

1. Respond to the Matters of Non-Conforming Products (P3-18)

2. Performance Summary (P20-22)
3. Progress on the Medium-Term Management Strategy (P24-29)

4. Initiatives by Segment (P31-43)
5. Recap (P45)

19｜2018.05.15

FY2018 Result (Comparison with YoY Result)Comparison
with
YoY
ResultNet sales: Net sales went up, mainly due to the rising copper prices and increased sales quantity of products such as cemented carbide products.
Operating profit: Operating profit rose, particularly in the Metals, and Advanced Materials & Tools business, mainly due to the sales quantity
effect and the yen depreciation.
Ordinary income: Ordinary income increased, mainly reflecting increases in operating profit and dividends from copper mines.
Net income*: Net income increase, chiefly reflecting higher ordinary income.
Dividend: Annual dividend per share increased by ¥20 to ¥80, in accordance with the capital policy set out in the Medium-Term Management
Strategy.

(¥ billions)

FY2017
Result (a)Difference(b)-(a)

FY2018Result (b)1,304.0

1,599.5+295.4

Operating profit

59.7

72.8

+13.0

Ordinary income

63.9

79.6

+15.6

Net income *

28.3

34.5

+6.2

216.44264.15+47.71Dividend per share (yen) *1

60

80

+20

Exchange rate USD (yen / $)

108

111

+3

Copper price (LME) (¢ / lb)

234

292

+58

Net sales

Net income per share (yen) *1*1 A consolidation of shares of the Company's common stock at a 10:1 ratio was executed, with an effective date of October 1, 2016. According to this, net income per share anddividend per share are calculated on the assumption that the consolidation of its shares was conducted at the beginning of FY2017.
* Net income attributable to owners of parent

20｜2018.05.15

FY2018 Result (Comparison with Previous Forecast)Comparison
withPrevious
Forecast

Net sales: Net sales were more or less on a par with the previous forecast.
Operating profit: Operating profit exceeded the forecast mainly due to better-than-anticipated sales of cemented carbide products.
Ordinary income: Ordinary income exceeded the forecast, mainly reflecting an increase in operating profit.
Net income*: Net income was on par with the previous forecast mainly due to deterioration in extraordinary income (loss).
Dividend: The previous forecast was left unchanged.

(¥ billions)

FY2018
Forecast (a)(Announced on Feb. 13)

Net sales

Difference(b)-(a)

FY2018Result (b)1,580.0

1,599.5+19.5

Operating profit

70.0

72.8

+2.8

Ordinary income

78.0

79.6

+1.6

Net income *

35.0

34.5

-0.4

267.23264.15-3.08

Dividend per share (yen)

80

80

-

Exchange rate USD (yen / $)

112

111

-1

Copper price (LME) (¢ / lb)

288

292

+4

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

21｜2018.05.15

FY2019 Full Year Forecast
Comparison
with
YoY
ResultNet sales: Net sales will increase mainly due to rising copper prices.
Operating profit: Although net sales are expected to rise due to such as ready-mixed concrete in the U.S. and cemented carbide products,
operating profit will fall largely due to the impact of the external factor including energy costs and foreign exchange rates.
Ordinary income: The decline will be smaller than at the operating profit stage, chiefly due to an improvement in equity in earnings of affiliates.
Net income*: Net income will increase mainly due to an improvement in extraordinary income (loss).
Dividend: The annual dividend per share will be ¥80, the same as the previous fiscal year, in accordance with the capital policy set out in theMedium-Term Management Strategy.

(¥ billions)

FY2018Result (a)Difference(b)-(a)

FY2019Forecast (b)1,599.5

1,660.0+60.4

Operating profit

72.8

67.0

-5.8

Ordinary income

79.6

79.0

-0.6

Net income *

34.5

35.0

+0.4

264.15267.23+3.08

Dividend per share (yen)

80

80

-

Exchange rate USD (yen / $)

111

107

-4

Copper price (LME) (¢ / lb)

292

310

+18

Net sales

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

22｜2018.05.15

Contents

1. Respond to the Matters of Non-Conforming Products (P3-18)

2. Performance Summary (P20-22)
3. Progress on the Medium-Term Management Strategy (P24-29)

4. Initiatives by Segment (P31-43)
5. Recap (P45)

23｜2018.05.15

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｜2018.05.15◆ 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

Rolling Review of Medium-Term Management Strategy
Provisional financial calculations

Rolling Review of Medium-Term
Management Strategy◆ Growth strategies and investment
plan for upcoming three years under
the Medium-Term Management
Strategy are reviewed every year.
◆ There has been no major change inthe business environment, etc. since
formulation in FY2018.

ROA(Ordinary income to total assets)

3.5%

FY20172016年度Result実績

4.5-5%

4.1%

3.9%

FY20182017年度Result実績

FY20192018年度Forecast
予想

ROE→ There are no major changes to thebasic strategies, investment planand provisional financial calculationsof the Group and each business.

4.8%

FY20172016年度Result実績

25｜2018.05.15

5.3%

FY20182017年度Result
実績

FY20202019年度Medium-Term
中経Strategy
Management

7-8%
5.0%

FY20192018年度Forecast
予想

FY20202019年度Medium-Term
中経Strategy
Management

Capital Policy

Dividend

FY2017 (Results)

FY2018-2020

60 yen/share

80 yen/share◆While the Company’s performance is changed, its policy is to maintainstable dividends, and annual dividends during the FY2018-2020 period
will be 80 yen per share (same as dividend in FY2018).
◆If the consolidated dividend payout ratio is lower than 25%, however,
the Company will temporarily increase the dividend or purchase treasury
stock.
* A consolidation of shares of the Company's common stock at a 10:1 ratio was executed, with an effective
date of October 1, 2016. According to this, dividend per share for FY2017 is calculated on the assumptionthat the consolidation of its shares was conducted at the beginning of the FY2017.
26｜2018.05.15

Optimization of Business Portfolio
Creation of New Products and Business

Product
manufacturing

Growthpromotionbusiness

Profitability
restructuringbusiness

Advanced Materials &Tools
Metals (Copper &Copper Alloy Products)(重要業績評価指標)

KGI *New Business Development& Promotion Division

EBITDA
GrowthRate

In product manufacturing business (Copper & Copper
Alloy Products, Electronic Materials & Components, andAluminum), promote◆Establishment of business model,◆Development of new business,◆Cooperation with parties outside the company(Utilization of external technologies and M&A, etc.)

Electronic Materials &Components

ROS
Aluminum

Process
manufacturing

Technology Division
EV Material Development &Recycling Business Promotion Dept.

CementStable growthbusiness

KPI

Metals (Smelting)

ROA◆Contact point for EV-related business (PR & marketing)◆Establishment of recycling business model◆EV analysis ⇒ Concept model

Environment & Energy◆ Set performance indices (KGIs and KPIs) appropriate for each business and commence operations◆ Incorporate governance perspective when optimizing of business portfolio◆ Establish organization to create new business in both process and product manufacturingbusinesses (from April, 2018)27｜2018.05.15* KGI: Key Goal Indicator

Creation of New Products and Business
Shift to EVs andautomatic driving

IoT and AI

Focus on customers' perspective andsolution-based business

Product
manufacturing

Growthpromotion◆New cemented carbide products → IoT, solutions◆New copper alloys → Plating
Materials & components◆Synergy with Luvata
for power electronics◆Sealing parts for automobiles

Focus on growth product markets
Profitability
restructuring◆Heat exchange materials for automobiles→ Weight reduction◆Heat management materials and modules◆In-vehicle sensors → For IoT

Copper materials& components
for EVs

Heat management
materials for EV

IoT sensor

Materials & components
for EV battery

Electronics

Automobile

EnergyEnvironment

Process
manufacturing◆Stable operation → Automatic operation◆E-Scrap, maximizing waste utilization◆Recycling → Element strategy◆New energy

Low carbon business

Clean energy

28｜2018.05.15◆Solutions for needs by the shift ofautomobiles to EVs◆Solutions for heat management needs→ New advanced materials andcomponents that enrich people andsociety

Contribute to the building ofa rich, sustainable society

Differentiation
StablegrowthProvide “materials andsolutions” to growth
product markets

LiB recycling

Urban mines◆Urban resource recycling No. 1◆Low carbon innovative processes→ Eco-friendly new value creation

Key Measures to Strengthen and Restructure the Business Since April 2017
Key Business Strengthening and Acquisition of Shares
Cement Business

Metals Business• Capacity of waste plastic processing at Kyushu Plant increased 1.7 times• “Luvata Special Products Division” became a consolidated subsidiary through completion of the acquisition ofshares• “MM Metal Recycling B.V.”, an E-Scrap sampling facility established in the Netherlands, went into operation• "Central Japan Technical Center" was established

Advanced
Materials & Tools
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

Other business• “KitaKyushu Ash Recycle Systems Co., Ltd.”, which is engaged in the treatment of incineration fly ash, went into
operation• “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”
Key Business Restructuring and Sales of Shares
Advanced
Materials & Tools
Business
Common29｜2018.05.15• All shares in “Hitachi Metals MMC Superalloy, Ltd.” were sold• All shares in “Mitsubishi Materials Real Estate Corporation” were soldContents

1. Respond to the Matters of Non-Conforming Products (P3-18)

2. Performance Summary (P20-22)
3. Progress on the Medium-Term Management Strategy (P24-29)

4. Initiatives by Segment (P31-43)
5. Recap (P45)30｜2018.05.15

Cement Business

31｜2018.05.15

JapanPerformance History (Cement)◆ Trends of demand(Billion yen)
25.0

Business Forecast for FY2019

20.9

20.0

20.5

19.4 21.0- For FY2019, domestic demand assumption of the Company is 42.5 million tons,
which is a forecast increase of 1.5% from FY2018- As for exports, firm demand especially in the Oceania and Asia is expected18.4 19.2

15.0◆ Sales price

10.0
5.0

- In response to rising manufacturing and logistics costs, price revision of 1,000
yen or more per ton was announced, starting from April 1, 2018 shipments

0.0
FY2017
Operating profit

FY2018FY2019 Forecast◆ Waste disposal processing

Ordinary income- Coal ash processing prices will be raised and acceptance and processing
quantity of waste plastic will be expanded

Demand history (domestic / export)(Millions of tons)
60.0

Domestic tren d (l eft axis)
Exports (ri ght axis)

40.0

12.0

8.0

Key strategy: Fortifying the domestic foundation forcompetitiveness● Capacity of waste plastic processing increased(operations began in Feb. 2018)→ Capacity at Kyushu Plant increased 1.7 times
20.0

4.0

0.0

0.0
FY07FY08FY09FY10FY11FY12FY13FY14FY15FY16FY17FY18FY19(Source: Japan Cement Association, forecast at the beginning of the fiscal year)

32｜2018.05.15● Consider increasing berth capacity for export at Kyushu
Plant→ To accommodate expansion of export volume whendomestic demand declines

United States
Business Forecast for FY2019◆Trends of demand (Southern California)- Demand is expected to continue growing in the region, driven by demand for private housing andnon-residential in the private sector◆ Production & sales plan
- Cement (Mitsubishi Cement Corporation (MCC)) plans full-capacity production as in FY2018- Ready-mixed concrete (Robertson's Ready Mix, Ltd. (RRM)) expects increased sales◆ Sales price

ロングビーチ・ターミナル- Both cement (MCC) and ready-mixed concrete (RRM) plan further price increases
Ready-mixed concrete
plant of Robertson's Ready
Mix, Ltd.

Demand history for cement in Southern California(Source: PCA)

(Thousands of metric tons)

12,000

Domestic Products

Import Products

10,000Key strategy: Expansion of the US business(Robertson's Ready Mix, Ltd.)● New ready-mixed concrete plant in Simi Valley,
northwest of Los Angeles, plan to go into operation

8,000(in second half of FY2019)

6,000● Systematically promote expansion of existing mines
and acquisition of new mines with aim of securing
aggregate resources

4,000

2,000
0

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22

33｜2018.05.15

Forecast

Metals Business

34｜2018.05.15

Mining
Business Forecast for FY2019

Performance History (Metals)(Billion yen)
40.0

36.2
27.5

30.0

20.0

24.0

34.6
23.7

17.3

◆Dividend income- Expected to increase ¥0.3 billion from FY2018,
to ¥ 14.6 billion◆Investment for copper mines

Los Pelambres mine
(Chile)- Continue to develop new mines aiming for stable procurement ofcopper ore- Continue to consider acquisition of new mining stakes

10.0

0.0

FY2017

Operating profit

FY2018FY2019 Forecast

Ordinary income

Dividends from Copper Mines & Copper Price
50.0

Dividends from copper mines (billion yen, left axis)
Copper price (¢/lb, right axis)

40.0

500
400

30.0

300

20.0

200

10.0

100

0.0

0
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
Forecast

35｜2018.05.15

Key strategy: Develop new projects● 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
business
Long-term controlled
volume ratio target

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

SmeltingBusiness Forecast for FY2019

Gresik Copper Smelter andRefinery of PT. Smelting(Indonesia)◆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 (first half)
and Naoshima Smelter & Refinery (second half)◆Recycling (E-Scrap)- Recycling capacity has increased to approx. 160,000 tons a year

MM Metal Recycling B.V.
(Netherlands)

History of E-scrap treatment capacity (Naoshima & Onahama)(Thousands of tons)
千Key strategy: Increasing E-Scrap recycling● The E-Scrap recycling facility in the
Netherlands began operation (Feb. 2018)→ Capacity increased 20,000 tons, to160,000 tons

E-Scrap

160

120

80

40

FY09

36｜2018.05.15

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19
Forecast● Considering additional investment fromFY2020, aiming to increase capacity to
200,000 tons by 2021

Copper & Copper Alloy Products
Business Forecast for FY2019◆Mitsubishi Shindoh Co., Ltd.
- Continued strong demand centering on terminal materials for automobiles andleadframes for semiconductors is expected- Capital expenditure to improve productivity is planned

Copper strips (Mitsubishi Shindoh)◆Mitsubishi Cable Industries, Ltd.

- The top priority will be to implement preventive measures of the Matters of
Non-Conforming Products and to return to normal operations

Superconducting wires
and cables (Luvata SP)◆Luvata Special Products (SP) Division- Luvata SP will contribute to consolidated results as full year starting from FY2019
and creation of business synergies will be achieved
Welding electrodes (Luvata SP)

Key strategies● Focus on high valueadded areas● Business expansion● Efforts for the future

Mitsubishi Shindoh (rolling)- Increase sales of terminal materials
for automobiles(MSP alloys and PIC plating)

Mitsubishi Cable Industries- Increase sales of sealingparts- Create synergy with Luvata- Develop high-performance plating- Shift of automobiles to EVs, etc.

- Establish the foundation for
E-Scrapの一例

increasing sales of terminal materials
and new alloys- Strengthen the production system

37｜2018.05.15

Tactics
Mitsubishi Shindoh (extrusion)- Increase sales, taking advantage ofthe features of ECOBRASS®
- Boost sales of high quality copper
alloys- Establish sales and production
systems to prepare for ELV andRoHS Directive- Establish system for increased
production of copper alloys

MMC Sakai Plant- Increase sales of ROX® alloys- Boost sales of trolley wire,
target materials and high purity
copper- Create synergy with Luvata- Develop sealing parts forautomobiles

Advanced Materials& Tools Business

38｜2018.05.15

Cemented Carbide Products
Performance History (AM&T)(Billion yen)
20.0

18.5

16.8

17.2 16.6

10.0◆Demand and sales forecast- Firm sales environment is expected globally

15.0

11.7

Business Forecast for FY2019

9.9- Announced sales price revision from April 1, 2018
due to rising raw material costs

5.0
0.0
FY2017

Operating profit

FY2018FY2019 Forecast- Increased the capacity of recycling tungsten, a raw materialof cemented carbide products, by 50% (October 2017)

Ordinary income

Key strategy: Increase capacity to provide solutions● Established the Central Japan Technical Center(June, 2017)● Relocated, improved and expanded TianJin LingYuntool Design Co.,LTD. in China (October, 2017)● Plan to establish new technical centers in Germany
and India
TianJin LingYun tool Design
Co.,LTD.

Key strategy: Reinforce the Key Account strategy● Participated in “OMIC R&D” at cooperative
research institute for government, industry andacademia in Oregon, US (November 2017)- 15th cooperative research institute for government,
industry and academia established around the world,and led by The Boeing Company- We will strive for further growth as a global player
driven by the activities at OMIC R&D

Central Japan Technical Center

39｜2018.05.15

Electronic Materials &Components Business

40｜2018.05.15

Electronic Materials & Components Business
Performance History (EM&C)(Billion yen)

Overview◆Advanced Materials

8.0

6.1
6.0

3.4

4.0

2.4

4.5

4.5

2.8

◆Electronic Components

2.0
0.0
FY2017

Operating profit

FY2018FY2019 Forecast

Ordinary income

Key strategy: Lineup of high value-added
products★ Major new products since April, 2017
● New silver alloy sputtering target for organic EL
displays● “EFrontierTM ”, a fluorine compound withhydrophilic oil-repellent● Multiband antennas for cellular bands worldwide
for automotive telecommunications equipment● Aluminum heat sink-integrated substrate module
for automotive LED headlamps● World's first gold-tin alloy solder paste that does
not require a washing process
41｜2018.05.15- Resources will be focused on growth products such as siliconmaterials and components for semiconductor manufacturing
equipment (precision silicon products, silicon parts)- Sales of thermistor sensors (temperature sensors) for air
conditioners are expected to increase- Planning capital expenditure for increasing production to meetstrong demand◆Silicon- Rising prices of metallurgical silicon, which is the raw material,
will lead to higher costs- Operation will be increased to full-capacity production to
improve profitability

Key strategy: Develop and nurture strong new
businesses● Established “Antenna Solution Center” inside Saitama
Property Management Office→ To meet needs for solutions which are increasing due toexpansion of the IoT market, strengthening structure andproposing optimization of wireless communication to morecustomers

Aluminum Business

42｜2018.05.15

Aluminum Business
Performance History (Aluminum)(Billion yen)
8.0

7.8

◆Mitsubishi Aluminum Co., Ltd.

7.4

(Rolled and extruded products)- Sales of heat exchanger sheet materials for automobiles, and lithiumion battery cases are expected to remain strong

6.0

3.8

3.7

4.0

Overview

3.1

3.0
2.0
0.0
FY2017

Operating profit

FY2018FY2019 Forecast

Ordinary income◆Universal Can Corporation (Aluminum beverage cans)- Sales of bottle cans fell in the previous fiscal year, pushed down by
PET bottle products- In FY2019, sales of regular cans are expected to recover, and salesof bottle cans are expected to fall

Mitsubishi Aluminum Co., Ltd.

Universal Can Corporation

Key strategies● Shift the heat exchanger sheet
materials for automobiles throughFuji Plant
selection and concentration● Establish a new production base for heatexchanger sheet materials for automobilesin North America

Key strategies● Increase sales of bottle cans and develop andlaunch cans with new shapes→ Establishing a new production line at Gifu Plant→ Continuing consideration with Gränges, theworld’s largest manufacturer in the industry

43｜2018.05.15● Promote UBC recycling● Development overseas business→ Considering development businessin the Southeast Asian market, etc.

Contents

1. Respond to the Matters of Non-Conforming Products (P3-18)

2. Performance Summary (P20-22)
3. Progress on the Medium-Term Management Strategy (P24-29)

4. Initiatives by Segment (P31-43)
5. Recap (P45)

44｜2018.05.15

RecapGovernance Framework
Enhancement Measures of theGroup, including quality control

All Officers and employees
will implement together with astrong sense of crisis

Recover trust of shareholders,customers and society

Maintain corporate
value of the Company

Continue to promote measures
based on Medium-Term
Management Strategy

Enhance corporate
value of the Company

45｜2018.05.15

◆ 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.

46｜2018.05.15

Note

47｜2018.05.15