Sumitomo Chemical Company (4005) investor relations material

Executive summary

• FY2025 saw a strong recovery in business performance, with core operating income up 48.3% year-over-year and net income attributable to owners of the parent rising 57.9%.

• Portfolio restructuring advanced, focusing on life sciences and advanced electronic materials as core businesses, with nearly 60% of core operating income now from Agro & Life Solutions (AGL) and ICT & Mobility Solutions (ICTM).

• Strategic focus is on expanding biorationals, advanced semiconductors, and life sciences, with Essentials & Green Materials shifting toward an IP- and licensing-driven business model.

• Business portfolio shift accelerated, reducing reliance on P&P and emphasizing growth drivers AGL and ICTM.

Financial highlights

• FY2025 sales revenue: ¥2,328.5 billion, down 10.7% year-over-year due to divestitures; core operating income rose to ¥208.4 billion, up ¥68 billion.

• Net income attributable to owners of the parent increased to ¥60.9 billion, up 57.9% year-over-year.

• ROE improved to 6.4% from 4.1% in FY2024.

• FY2026 forecast: sales revenue ¥2,360.0 billion (+¥31.5 billion), core operating income ¥215.0 billion (+¥6.6 billion), net income ¥70.0 billion.

• Free cash flow was ¥159.9 billion, down from ¥318.3 billion in FY2024.

Outlook and guidance

• FY2026 expects continued growth in AGL and EGM, with ICTM facing headwinds from semiconductor shortages but anticipating recovery.

• Dividend forecast raised to ¥16 per share, with a target payout ratio of 37.7%.

• ROE is expected to rise to 6.8% in FY2026.

• Free cash flow is projected to decrease to ¥60.0 billion.