The First-Half Year (Nov. 2, 2021)

November 2, 2021

Consolidated Financial Results

for the First Half of the Fiscal Year Ending March 31, 2022

(Under IFRS)

Company name:	Mitsubishi Chemical Holdings Corporation	Listing:	Tokyo Stock Exchange
Securities code:	4188	URL: https://www.mitsubishichem-hd.co.jp/english
Representative:	Jean-Marc Gilson
	Representative Corporate Executive Officer, President&Chief Executive Officer
Contact:	Osamu Shimizu			TEL: [+81] (0)3-6748-7120
	General Manager, Corporate Communications Office

Scheduled date to file quarterly securities report:	November 11, 2021
Scheduled date to commence dividend payments:	December 2, 2021
Preparation of supplementary material on financial results:	Yes
Holding of financial results briefing:	Yes (for securities analysts and institutional investors)

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the First Half of the Fiscal Year Ending March 31, 2022("FY2021") (from April 1, 2021 to September 30, 2021)

1. Results of Operations:

(Percentages indicate year-on-year changes.)

			Core		Operating					Net income		Comprehensive
	Sales Revenue	Operating			Net income		attributable to
		income			Income
			Income *						owners of the parent
Six months ended		%			%			%			%			%			%
September 30, 2021	1,885,095	25.3	156,140	185.8	153,137		－	101,935	－	85,166		－	122,804		－
September 30, 2020	1,504,816	(17.7)	54,639	(58.2)	(28,126)		－	(39,924)	－	(49,687)		－	(12,624)		－

Reference: Income before taxes

Six months ended September 30, 2021: ¥147,165 million(－%)

Six months ended September 30, 2020: ¥(36,800) million(－%)

* Core operating income is calculated as operating income excluding certain gains and expenses attributable to non-recurring factors.

Basic earnings

Diluted earnings

per share

per share

Six months ended

Yen

Yen

September 30, 2021

59.94

55.13

September 30, 2020

(34.99)

(34.99)

(2) Financial Position:

Ratio of equity

Total assets

Total equity

Equity attributable to

attributable to owners

owners of the parent

of parent to total

assets

As of

%

September 30, 2021

5,315,828

1,665,310

1,320,007

24.8

March 31, 2021

5,287,228

1,571,148

1,236,339

23.4

2. Cash dividends

Annual dividends per share

First quarter-

Second

Third

Fiscal

Total

end

quarter-end

quarter-end

year-end

Fiscal year ended

Yen

Yen

Yen

Yen

Yen

March 31, 2021

－

12.00

－

12.00

24.00

March 31, 2022

－

15.00

March 31, 2022

－

15.00

30.00

(Forecast)

Note:

The forecast of cash dividends for FY2021 has been revised to the above from those announced on May 12, 2021.

3. Forecast for the Current Fiscal Year

(Percentages indicate changes in comparison with the previous fiscal year)

			Core		Operating				Net income		Basic
	Sales Revenue	Operating			Net income	attributable to		earnings
		income
			Income *					owners of the parent	per share
		%			%			%		%			%	Yen
FY2021	3,886,000	19.3	300,000	71.7	344,000	623.9	228,000	903.4	192,000		－	135.12

Reference: Income before taxes

FY2021: ¥328,000 million(896.7%)

Note:

The forecast for FY2021 has been revised to the above from those announced on May 12, 2021.

* Notes

(1) Changes in significant subsidiaries during the period				:	None
(changes in specified subsidiaries resulting in the change in scope of consolidation)
(2) Changes in accounting policies and changes in accounting estimates
(i) Changes in accounting policies required by IFRS		:	None
(ii) Changes in accounting policies due to other reasons	:	None
(iii) Changes in accounting estimates		:	None
(3) Number of issued shares (ordinary shares)
(i)Total number of issued shares at the end of the period (including treasury shares)
As of	1,506,288,107 Shares			As of March	1,506,288,107 Shares
September 30,2021			31,2021
(ii)Number of treasury shares at the end of the period
As of	85,259,884 Shares			As of March	85,865,812 Shares
September 30,2021			31,2021
(iii)Average number of shares outstanding during the period
Six months ended	1,420,832,768 Shares		Six months ended	1,420,148,376 Shares
September 30,2021		September 30,2020

*Mitsubishi Chemical Holdings Corporation adopted a performance-based share compensation plan that uses executive compensation Board Incentive Plan (BIP) trusts. Mitsubishi Chemical Holdings Corporation stocks held by BIP trust are included in treasury shares.

(Reference)

Number of Company's shares in executive compensation BIP trust:

September 30,2021	2,833,314	Shares
March 31, 2021	2,994,552	Shares

Disclosure regarding quarterly review procedures

Financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.

Proper use of earnings forecasts, and other special matters

*The forward-looking statements are based largely on the Company's expectations and information available as of the date hereof, and are subject to risks and uncertainties which may be beyond the Company's control. Actual results could differ materially due to numerous factors. The Company's stance on forward-looking statements is described on page [5] and [6] hereof.

*This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Contents:

1. Qualitative Information on Financial Results for the Term
(1)	Business Performance	P.	2
(2)	Financial Position	P.	5
(3) Explanation of Consolidated Financial Results Forecast and Other Forward-Looking Information	P.	5
2. Condensed Consolidated Financial Statements
and Notes Concerning Condensed Consolidated Financial Statements
(1)	Condensed Consolidated Statement of Profit or Loss	P.	7
(2)	Condensed Consolidated Statement of Comprehensive Income	P.	8
(3)	Condensed Consolidated Statement of Financial Position	P.	9
(4)	Condensed Consolidated Statement of Changes in Equity	P.	11
(5)	Condensed Consolidated Statement of Cash Flow	P.	13
(6)	Notes to Condensed Consolidated Financial Statements	P.	15
(Segment Information)	P.	15

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1. Qualitative Information on Financial Results for the Term

1. Business Performance

Performance Overview

In the business environment of the consolidated first half (April 1, 2021 - September 30, 2021; same hereafter) of the Mitsubishi Chemical Holdings Corporation (MCHC) Group, although there was impact mainly from a rise in raw material prices, given that economic activities are gradually returning to normal in each country in tandem with the progress in vaccinations, demand in Japan and abroad is gradually trending toward recovery versus the same period a year earlier.

Amid this backdrop, sales revenue came to ¥1,885.1 billion, an increase of ¥380.3 billion (a rise of 25.3%) from the same period in the previous consolidated fiscal year (April 1, 2020 - September 30, 2020; same hereafter). In the profit front, core operating income climbed ¥101.5 billion, or 185.8%, to ¥156.1 billion. Operating income rose ¥181.2 billion, to ¥153.1 billion. Income before taxes was up ¥184.0 billion, to ¥147.2 billion. And net income attributable to owners of the parent improved ¥134.9 billion, to ¥85.2 billion.

Overview of Business Segments

The overview of financial results by business segment for the first half of fiscal 2021 is shown below. Segment gains or losses are stated as core operating income, which excludes gains or losses from non-recurring factors and including losses from business withdrawals, streamlining, and other factors.

Performance Products Segment, Performance Products Domain

In comparison with the same period in the previous consolidated fiscal year, sales revenue increased ¥106.7 billion, to ¥566.7 billion and core operating income expanded ¥20.8 billion, to ¥45.8 billion.

In polymers and compounds, sales revenue increased reflecting a rise in sales volumes for products used in automobiles and other applications, and also an upturn in market prices for some polymers.

In films and molding materials, sales revenue increased reflecting a rise in sales volume mainly for molding materials used in automobiles and other applications in tandem with a recovery in demand, and there were also brisk sales trends for films used for optical applications for displays as well as for other applications.

In advanced solutions, sales revenue grew underpinned primarily by an increase in sales volume accompanying a recovery in economic activities.

Core operating income in this segment expanded chiefly reflecting an increase in sales volume overall, mainly for automotive applications, and despite impact from a rise in raw material prices.

Major initiative in the Performance Products segment during the first half of fiscal 2021:

• In April 2021, Mitsubishi Chemical Corporation (MCC) decided to make a capital investment in C.P.C. SRL (CPC; Head office: Modena, Italy) in order to strengthen the carbon fiber and composite material business. The investment includes plans for the addition of 5,000-metric ton press machines, which will be among the largest in the world. CPC is an equity-method affiliate of MCC that manufactures and sells carbon fiber reinforced plastic (CFRP) automotive parts. The facility is scheduled for operation in 2023.
• Mitsubishi Chemical Corporation, as a part of its portfolio reforms, transferred its shareholdings in equity-method affiliate Sinopec Mitsubishi Chemical Polycarbonate (Beijing) Co., Ltd. (Head office: Beijing, PRC) to China Petroleum & Chemical Corporation (Head office: Beijing, PRC) in October 2021.

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• In May 2021, Mitsubishi Chemical Corporation and the Japan Steel Works, Ltd. (Head office: Shinagawa-ku, Tokyo) jointly completed construction of a verification facility for mass production of gallium nitride (GaN) single-crystal substrates at the Muroran Plant of Japan Steel Works M&E, Inc. The aim is to conduct verification tests for mass production throughout FY2021, and start market supply from early FY2022. The goal is to contribute to an energy minimum society, which is the improvement of fuel and power generation efficiency through the supply of high-quality GaN substrates.
• Mitsubishi Chemical Corporation (MCC) has decided to construct a new Sugar Ester production line (an annual production capacity of 2,000 tons) at the Fukuoka Plant (Location: Kitakyushu, Fukuoka Prefecture). The goal is to address an increase in demand and strengthen its supply chain. MCC plans to launch operations in mid 2023.
• In September 2021, Mitsubishi Chemical Corporation, as part of its portfolio reforms, agreed to transfer its polycrystalline alumina fiber business and the same business of Mitsubishi Chemical High-Technica Corporation, its consolidated subsidiary, to a special purpose company held by funds managed by affiliates of Apollo Global Management, Inc. (Head office: New York, US).

Chemicals Segment, Industrial Materials Domain

In comparison with the same period in the previous consolidated fiscal year, sales revenue increased ¥203.6 billion, to ¥594.0 billion and core operating income expanded ¥80.3 billion, to ¥62.2 billion.

In MMA, sales revenue expanded owing to a rise in the market price for MMA monomer given strong demand trends.

In petrochemicals, sales revenue expanded. In addition to a growth in sales prices in tandem with higher raw material prices, sales volumes also rose reflecting reduced impact from scheduled maintenance and repairs at the ethylene production facility and a recovery in demand.

In carbon products, sales revenue rose reflecting higher sales volumes in tandem with an overall recovery in demand as well as a rise in selling prices for export coke.

Core operating income in this segment was up owing to performance in petrochemical products, which was highlighted by an increase in sales volume and an improvement in inventory valuation gain in tandem with higher raw material prices, and also in part due to a rise in market prices mainly for MMA monomers and export coke.

Major initiatives in the Chemicals segment during the first half of fiscal 2021:

• Japan Polychem Corporation (JPC), a consolidated subsidiary of Mitsubishi Chemical Corporation, decided in April 2021 to acquire equity in six overseas group companies owned by Japan Polypropylene Corporation, a joint venture of JNC Petrochemical Corporation and JPC, including Mytex Polymers US Corporation (Head office: Indiana, US), and turned them into wholly-owned subsidiaries in July. Mytex Polymers deploys the polypropylene compound and long glass reinforced thermoplastic business. The goal is to accelerate growth in response to an increase in demand, including prominent parts that will contribute to making automobiles lighter, through the use of technological strengths and business infrastructures in Japan and abroad.
• Mitsubishi Chemical Corporation (MCC) and Mitsubishi Chemical Methacrylates Japan Co., Ltd., a consolidated subsidiary of MCC, constructed a verification facility in Japan in June 2021, and decided in May 2021 to carry out verification testing in preparation of the commercialization of chemical recycling for acrylic resins. Regarding the recovery, chemical recycling and reuse of acrylic resins, including tail lights from scrapped cars, both companies are carrying out an examination of a scheme along with Honda Motor Co., Ltd. (Head office: Minato-ku, Tokyo) and are jointly implementing a verification of a recycling system that uses this verification facility.

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