Value creation process

The Mitsubishi Materials Corporation Group ("the Group") will utilize its strengths that include "an advanced recycling technology and business platform," "value chain from raw materials to products with a stable supply," "unique material development and manufacturing technology," and "a team that can unite to resolve issues," etc., to solve social issues, promote key group initiatives, and strengthen its core businesses, and thereby further both social and economic values.

Mission of MMC

Based on its corporate philosophy of "For People, Society and the Earth", the Group's vision is "We will become the leading business group committed to creating a sustainable society through materials innovation, with use of our unique and distinctive technologies, for People, Society and the Earth". Based on the corporate philosophy and vision, MMC formulated the FY2023 Strategy that sets out MMC's mission and medium- and long-term goals from FY 2031 to FY2051 from the perspective of creating both social and economic values.

Financial plan

1.Financial indicators and targets

The FY2023 Strategy emphasizes medium- to long-term profitability and growth potential for each business, and profitability and growth potential primarily by ROIC and EBITDA growth rate, respectively. In the process-type business, ROA is used as a complement, and ROIC, ROE, and ROA are used together as corporate financial indicators. The company's financial targets for FY2023 are: ROIC 6.0%, ROA 4.0%, ROE 7.0%, a consolidated operating profit of ¥58 billion, a consolidated ordinary income of ¥75 billion, and a net D / E ratio of 1.0 times or less.

(Unit: billion yen)

*1 Announced on February 12, 2020
*2 Assuming transition to equity method in cement business

2.Investment policy

For the period of the FY2023 Strategy, total investment is estimated to be ¥360 billion, with a growth strategy investment of ¥190 billion and a maintenance and upgrading investment of ¥170 billion. Financial resources for investment will be generated by using cash flows from operations and proceeds from business restructuring and asset sales. If attractive large-scale investment projects for growth emerge, investments will be made proactively as long as there is a net D/E ratio within the range of 1.0 times or less.

3.Shareholder return policy

In order to return profits to shareholders, MMC will determine its profit allocation based on a comprehensive assessment of concerned factors, which include earnings for the period, internal reserves, and financial standing. With regard to profit allocation during the FY2023 Strategy period, MMC will focus on providing stable dividends despite fluctuating consolidated business results, and will pay out an annual dividend of ¥80 per share from FY2021 to FY2023. In cases that the consolidated payout ratio is less than 25%, MMC will temporarily increase the dividend or conduct share buybacks.

4.Strategic holdings

Unless required for strategic objectives, MMC will not acquire or hold shares other than purely for investment purposes.

Business strategy of each segment

<Advanced Products Business>

Long-term business goals	Global First Supplier
Long-term strategy	Create new businesses and products through the sophistication and integration of our core competencies (e.g. production and development of oxygen-free copper, oxygen-free copper base alloys, and functional materials as well as technical capabilities such as bonding different metals, etc.) Accelerate of marketing activities to replicate successful practice
Specific measures of the FY2023 Strategy	Assign key account managers acting cross-sectionally Enhance information analysis by digital marketing such as the employment of AI or IoT Share product roadmaps with customers (co-creation capabilities) Develop new products through collaboration with Central Research Institute Fortify production capabilities such as establishing a mass production system and improving productivity Pursue opportunities to execute M&A or business alliances

<Metalworking Solutions Business>

Long-term business goals	Top 3 supplier in strategic markets
Long-term strategy	Promote clean manufacturing Provide high-efficiency products with advanced technology Expand advanced metal powder business in electronic devices
Specific measures of the FY2023 Strategy	Increase recycling rate in our tool recovery system and utilize renewable energy Provide high efficiency tools and digital solutions Transition to smart factory and optimization of logistics and supply chain Expand advanced metal powder business to rechargeable battery market

<Metals Business>

Long-term business goals	Leader in environmentally-friendly mining & smelting business
Long-term strategy	Stable supply and recycling of nonferrous metal materials, predominantly copper Creation of a sustainable raw material portfolio consisting of clean copper concentrate and E-Scrap Promotion of recycling Response to climate change
Specific measures of the FY2023 Strategy	Secure clean copper concentrate by investing in new mines Develop impurity removal technology in copper concentrate Optimize valuable metal material flow Reduce fossil fuels

<Cement Business>

Long-term business goals	Leader in the domestic and international cement industry with advanced environmental technologies
Long-term strategy	Stable supply of basic building materials for social infrastructure and disaster prevention infrastructure Sophistication of waste disposal Response to climate change by reducing CO2 Construction of a resilient domestic business foundation through business restructuring and business growth in overseas markets
Specific measures of the FY2023 Strategy	Improve and optimize production system through domestic business restructuring Expand capabilities in waste plastic processing and installation of chlorine dust cleaning equipment Introduce low-temperature burning technology and develop CO₂ reduction, capture, and recycling technologies Expand US business and develop new overseas bases

<Environment & Energy Business>

Long-term business goals	(Environmental recycling) Driving force of resource-recycling systems (Renewable energy) Leading company in geothermal development
Long-term strategy	Provision of a safe recycling system with thorough traceability, etc. Decarbonization by expanding renewable energy business
Specific measures of the FY2023 Strategy	Expand home appliance recycling business, advancement of automation, and improvement of added value of recovered products Demonstrate LiB recycling technology and solar panel recycling technology Secure stable plant operations in fly ash recycling business and biogasification business Complete Komatagawa new hydroelectric power plant, construction of Appi geothermal power plant, and survey of new geothermal sites

Corporate planning strategy

The following are the key corporate planning strategies for supporting each business segment in the FY2023 Strategy.

R&D and marketing strategy	By focusing on changes in the external environment such as megatrends, etc., MMC will create high value-added products and services mainly in IoT and AI, next-generation vehicles, urban mines, and clean energy and decarbonization areas to meet customer needs based on its integrated functions, material composite, infrastructure and mass production, and recycling technologies.
Manufacturing excellence strategy	By formulating and realizing the factory vision based on the business strategy, as well as enhancing the production process, and proactively utilizing external knowledge, MMC will raise its manufacturing capability to the next level.
Quality management strategy	By optimizing its product/process design and equipment maintenance plan, MMC will implement proactive quality management to ensure that non-conforming products are not produced.
Digital Transformation strategy	MMC will use Digital Transformation to strengthen our three key pillars: "Business added-value", "Business operations competitiveness", and "Management speed". In the next five years, MMC will invest approximately ¥30 billion and allocate 100 digital professionals.