Mitsubishi Chemical Group (4188) Investor update summary

Vision and strategy for 2035

• KAITEKI Vision 35 aims to lead with innovative solutions for wellbeing, focusing on green chemicals, eco-conscious mobility, advanced data processing, food quality preservation, and new therapeutics, with a 10-year vision and a new five-year plan through 2029.

• Identifies five key social issues: energy use and decarbonization, sustainable resource management, digital technology advancement, food and water resource optimization, and healthy life expectancy extension.

• The strategy leverages both backcasting from 2050 societal issues and forecasting to enhance profitability and address urgent global challenges.

• Emphasizes sustainability, decarbonization, digital transformation, and extending healthy life expectancy.

• Plans to connect internal and external talent, technology, and manufacturing to drive innovation and value creation.

Business portfolio and operational discipline

• Portfolio transformation will quadruple core operating income in Chemicals by 2035, making it the highest-earning segment.

• Implements strict criteria for business selection: alignment with vision, competitive advantage, and growth potential; non-compliant businesses face divestiture or exit, with 30 cases planned between FY24-29.

• Focuses on price policy, high-value product mix, formula-based pricing for commodities, and rigorous investment selection with monthly progress reviews.

• Targets asset optimization, rationalization of excess capacity, and benchmarking expenses to global standards.

• Plans JPY 400 billion in portfolio transformation projects by 2029, aiming for JPY 140 billion profit increase through rationalization.

Financial targets and shareholder value

• Targets JPY 900 billion in profit by 2035, with FY2024 forecast at JPY 290 billion, and significant growth expected in both chemical and group businesses.

• FY29 targets: sales revenue of 49,500 Oku yen, COI of 5,700 Oku yen, and ROIC of 8%.

• Expects JPY 3 trillion cash income, allocating 20% to shareholders and debt repayment, with a 35% dividend payout benchmark.

• Shareholder returns will be strengthened, with increased dividends linked to profit growth; share buybacks not included in the current plan.

• Growth and strategic investments prioritized in chemicals, semiconductors, and food.