Mitsubishi Chemical : Consolidated Financial Results for the First Half of the Fiscal Year Ending March 31, 2024 (Under IFRS)NEW

3. Forecast for the Current Fiscal Year

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

Reference: Income before taxes

FY2023: ¥263,000 million(56.6%)

Note:

The forecast for FY2023 has been revised to the above from those announced on May 12, 2023.

Details are described in "1. Qualitative Information on Financial Results for the Term (3) Explanation of Consolidated Financial Results Forecast and Other Forward-Looking" on page [5] hereof.

* Notes

(changes in specified subsidiaries resulting in the change in scope of consolidation) Newly included: － Excluded : 1

(Company Name) MTPC Holdings Canada, Inc. (specified subsidiary) and Medicago Inc. (specified subsidiary) merged on April 1, 2023. The company retained the name Medicago Inc. (specified subsidiary) following the merger.

(2) Changes in accounting policies and changes in accounting estimates

Details of changes in accounting policies are described in "2. Condensed Consolidated Financial Statements and Notes Concerning Condensed Consolidated Financial Statements (6) Notes to Condensed Consolidated Financial Statements (Change in Accounting Policy)" on page [14] hereof.

(3) Number of issued shares (ordinary shares)

(i)Total number of issued shares at the end of the period (including treasury shares)

(ii)Number of treasury shares at the end of the period

(iii)Average number of shares outstanding during the period

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

(Reference)

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

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.

*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:

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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, 2023 - September 30, 2023; same hereafter) of the Mitsubishi Chemical Group (the MCG Group), while a moderate recovery trend continued as a result of the normalization of economic activities, outlook remained uncertain due to the effects of monetary tightening, especially in Europe and the United States, and the slowdown in the Chinese economy, on top of the impact of price hikes.

Against this backdrop, sales revenue in the consolidated quarter under review (April 1, 2023 - September 30, 2023; same hereafter) decreased ¥119.9 billion, or 5.3%, to ¥2,149.9 billion. In the profit front, core operating income fell ¥3.0 billion, or 2.5%, to ¥119.6 billion. Operating income was up ¥20.2 billion, or 17.1%, to ¥138.6 billion. Income before taxes increased ¥8.2 billion, or 6.7%, to ¥130.2 billion. And net income attributable to owners of the parent dropped ¥6.7 billion, or 9.1% to ¥67.2 billion.

Overview of Business Domains

The overview of financial results by business segment for the first half of fiscal 2023 is shown below. the MCG Group has reviewed reporting segments from the first quarter of fiscal 2023. For details, please see"2. (6) Notes to Condensed Consolidated Financial Statements (Segment Information).

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.

Specialty Materials Segment, Performance Products Domain

In comparison with the same quarter in the previous consolidated fiscal year, sales revenue decreased ¥44.4 billion, to ¥582.7 billion and core operating income declined ¥26.5 billion, to ¥17.1 billion.

In polymers and compounds, sales revenue decreased due to a decline in demand for paints, inks, adhesives and barrier packages, among other applications, in addition to the effect of partial transfer of the MCG Group's stakes in Mitsubishi Engineering-Plastics Corporation, despite the efforts to correct selling prices

In films and molding materials, sales revenue decreased due to a decline in sales volume reflecting slowdown in demand on the whole, including that related to high-performance engineering plastics, carbon fiber, and polyester films, despite the efforts to correct selling prices.

In advanced solutions, sales revenue dropped as a result of a decline in sales volume mainly in the semiconductor- related business, despite the efforts to correct selling prices.

Core operating income in this segment decreased significantly year on year due mainly to a decline in sales reflecting sluggish overall demand, despite an improvement in the balance between cost and selling prices as a result of an effort to maintain and increase selling prices.

In this segment in the consolidated first half under review, the following items were implemented by or occurred at the MCG Group.

• In April 2023, the MCG Group signed a contract with Neogen Chemicals Limited (Head office: Maharashtra, India) regarding the provision of production technology license in India for electrolytes used in lithium-ion batteries (LIB) with the aim of expanding the electrolyte business. In April 2023, the MCG Group also signed a memorandum of understanding with Koura (Head office: Massachusetts, USA), a producer of fluoroproducts, regarding the collaboration study for various purposes, such as strengthening the supply chain for formulated electrolytes for lithium-ion batteries

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(LIBs) in North America.

• The MCG Group concluded a memorandum of understanding with Korean company L&F Co., Ltd. (Head office: Daegu, South Korea), a manufacturer of cathode active materials for LIB, to conduct feasibility studies into strengthening the supply chain for anode materials in countries that have concluded a free trade agreement with the U.S with the aim of expanding anode materials for LIB business.

Industrial Gases Segment, Industrial Materials Domain

In comparison with the same quarter in the previous consolidated fiscal year, sales revenue increased ¥38.9 billion, to ¥608.2 billion and core operating income rose ¥26.0 billion, to ¥80.3 billion.

Sales revenue increased as a result of price management efforts in each region as well as forex impact, despite sluggish demand in Japan and overseas. Core operating income rose on the back of the effects of cost reduction initiatives on top of an increase in sales revenue.

In this segment in the consolidated first half under review, the following items were implemented by or occurred at the MCG Group.

• A joint venture Terranova Hydrogen NV (Head office: Zelzate, Belgium) was established with Terranova nv (Head office:
  Belgium) and Luminus (Head office: Belgium) to produce green hydrogen and build and operate a green hydrogen production plant. The production of green hydrogen is scheduled to start in early 2025.
• An oxygen supply contract for Direct Air Capture (DAC) plant to be constructed by 1PointFive (Head office: U.S.) in Texas was concluded. The plant is scheduled to commence operations in mid-2025.

Health Care Segment, Health Care Domain

In comparison with the same quarter in the previous consolidated fiscal year, sales revenue increased ¥16.2 billion, to ¥219.3 billion and core operating income rose ¥27.9 billion, to ¥32.4 billion.

Sales revenue increased. Although there was negative impact mainly from National Health Insurance drug price revisions in the domestic ethical pharmaceuticals business, there was offset by positive impact from steady sales for priority products and RADICAVA ORS®, a treatment agent for patients with amyotrophic lateral sclerosis (ALS) which had been released in the United States. Core operating income rose reflecting a decline in R&D and other costs in tandem with the withdrawal from the Medicago business, in addition to an increase in sales revenue.

In this segment in the consolidated first half under review, the following items were implemented by or occurred at the MCG Group.

• In May 2023, edaravone oral suspension (Development code: MT-1186) was approved in the Switzerland (Product
  name: RADICAVA® Oral Suspension) for the indication of amyotrophic lateral sclerosis (ALS). Edaravone oral suspension has already been approved in the U.S., Canada and Japan.

MMA Segment, Industrial Materials Domain

In comparison with the same quarter in the previous consolidated fiscal year, sales revenue decreased ¥28.4 billion, to ¥138.4 billion and core operating income declined ¥3.1 billion, to ¥1.7 billion.

Sales revenue decreased due to a fall in market prices chiefly for MMA monomer. Core operating income declined as the gap between cost and selling prices deteriorated reflecting a fall in market prices, despite a decrease in expenses associated with the closure of the Cassel site in the United Kingdom.

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Basic Materials Segment, Industrial Materials Domain

In comparison with the same quarter in the previous consolidated fiscal year, sales revenue decreased ¥84.8billion, to ¥491.3 billion and core operating income declined ¥30.0 billion, to a loss of ¥12.6 billion.

In petrochemicals, sales revenue decreased as sales volume dropped due mainly to a slowdown in demand and selling prices fell reflecting a decline in raw material costs among other factors.

In carbon products, sales revenue dropped reflecting a decrease in selling prices for cokes in tandem mainly with a fall in raw material costs.

Core operating income in this segment decreased significantly due to a decline in sales volume in line with a deterioration in the gap between cost and selling prices reflecting a fall in market prices for cokes and a slowdown in overall demand, in addition to the recording of inventory valuation loss in tandem with a fall in raw material costs, despite an increase in the price gap between raw materials and products, primarily for polyolefin.

In this segment in the consolidated first half under review, the following items were implemented by or occurred at the MCG Group.

• It was decided to increase the γ-butyrolactone production capacity of Okayama Plant from 18,000 tons/year to 20,000 tons/year in order to respond to an expansion in demand for LIB and semiconductors. The expanded production is scheduled to start in July 2024.

Others

In comparison with the same quarter in the previous consolidated fiscal year, sales revenue decreased ¥17.4 billion, to ¥110.0 billion and core operating income rose ¥2.3 billion, to ¥6.7 billion.

In this segment in the consolidated first half under review, the following items were implemented by or occurred at the MCG Group.

• It was agreed with Roquette Frères SA (Head office: Lestrem, France) to transfer of all shares of Qualicaps Co., Ltd. held by the MCG Group to the company as part of the portfolio reform. The share transfer agreement was concluded on July 28, 2023 and the share transfer was completed in October 2023.

Group Performance Overview

In accordance with "Forging the future," the management policy for the period FY2021-FY2025, the MCG Group has been transitioning to a flat organizational system based on the "One Company, One Team" concept. In conjunction with this transition, it has been decided to embark on intergroup organizational restructuring that will involve respective subsidiaries of MCG and MCC in Singapore with the aim of improving management efficiency by reshuffling, concentrating and optimizing the functions currently divided between the subsidiaries in October 2023.

(2) Financial Position

Total assets at the end of the second quarter of the fiscal year ending March 31, 2024 totaled ¥6,119.7 billion, an increase of ¥345.4 billion compared with the end of the previous fiscal year. This increase in total assets was primarily attributable to a rise in the value of assets translated into yen at overseas consolidated subsidiaries owing to progress in the depreciation of the yen and a temporary increase in cash and cash equivalents in tandem with the refinancing of interest-bearing debt.

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1. Explanation of Consolidated Financial Results Forecast and Other Forward-Looking Information

In light of recent performance trends, the Company has revised the consolidated financial results forecast that it announced on May 12, 2023 for the fiscal 2023, as follows. Also, please refer to the Notice of Revision to Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2024, announced today (November 1, 2023)

(ⅰ) Revision to consolidated financial results forecast for fiscal 2023 (April 1, 2023 - March 31, 2024)

(Billions of yen; unless otherwise noted)

Notes:

*The forecast for net income before taxes has been changed from ¥201.0 billion to ¥263.0 billion.

*Core operating income is operating income (loss) after excluding certain gains and expenses attributable to non-recurring factors.

(ⅱ) Reason for revision

As for the consolidated financial results forecast for fiscal 2023, there has been no revision from the previously disclosed forecast for core operating income as robust business performance is expected in the Industrial Gases Segment and the Health Care Segment, despite sluggish demand in tandem with slow recovery in market conditions in the Specialty Materials Segment and the Basic Materials Segment.

On the other hand, operating income, net income, and net income attributable to owners of the parent are expected to outperform the previously disclosed forecast in prospect of the recording of gain on sale of Qualicaps Co., Ltd. and gain resulting from the acquisition of additional shares of C.P.C.SRL in the second half.

Forward-Looking Statements

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, including, without limitation, market conditions, and the effect of industry competition.

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2. Condensed Consolidated Financial Statements and Notes Concerning Condensed Consolidated Financial Statements

1. Condensed Consolidated Statement of Profit or Loss
   Six months ended September 30, 2022 and 2023

Net income attributable to

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1. Condensed Consolidated Statement of Comprehensive Income Six months ended September 30, 2022 and 2023

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(3) Condensed Consolidated Statement of Financial Position

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