This is Yamauchi speaking. Thank you very much for attending the Sumitomo Chemical conference call despite your busy schedule.

I'd like to thank investors and analysts for your deep understanding and support to our management. Thank you very much for that.

Now, let me start with the briefing of the financial results for fiscal year 2025 the third quarter. Before explaining the details of our financial results, I would like to give a brief update of the status of profit and loss for the third quarter.

Core operating income and net income attributable to owners of the parent for the third quarter significantly increased compared to the same period of the previous fiscal year. Core operating income was driven by Sumitomo Pharma's strong sales.

Partial divestiture of the Asian business recorded a gain. Core operating income of Essential & Green Materials increased significantly year-on-year with the gain of a partial sale of shares in Petro Rabigh and better trade terms.

Agro & Life Solutions, crop protection chemical business had solid performance. Net income attributable to owners of the parent already exceeded the third quarter the forecast announced in November.

However, we anticipate that a recording of losses from non-recurring items will be concentrated in the fourth quarter. Consolidated financial results of the third quarter of FY 2025: sales revenue was ¥1,706.3 billion, down ¥198.5 billion year-on-year.

Core operating income expressing recurring earnings power was ¥186.8 billion, up ¥126.8 billion year-on-year. Non-recurring items not included in core operating income was a loss in total of ¥6.4 billion.

In the same period of the previous year, there was the impact of recognizing our interest in Petro Rabigh's debt forgiveness gain of ¥86 billion as a non-recurring item, leading to a profit of ¥85.4 billion. Compared to the previous year, this has worsened by ¥91.8 billion.

As a result, operating income was ¥180.4 billion, up ¥35 billion year-on-year. Finance income was a loss of ¥36 billion, improvement of ¥69.3 billion compared to the same period of the previous year, when loss on debt waiver for Petro Rabigh was recognized.

Gain or loss on foreign currency transactions included in finance income or expenses was a loss of ¥7.7 billion, worsening ¥22.8 billion year-on-year. Income tax expenses was a loss of ¥300 million, increase of tax burden of ¥900 million year-on-year.

Net income or loss attributable to non-controlling interests was a loss of ¥56.8 billion, worsening by ¥44.7 billion year-on-year with improvement of Sumitomo Pharma's income. As a result, net income attributable to owners of the parent for the third quarter was a profit of ¥87.4 billion, up ¥58.8 billion year-on-year.

Exchange rate and naphtha price which impact our performance: average US dollar rate during the term was ¥148.70 to a dollar, and naphtha price was ¥65,000 per kiloliter. Yen appreciated and feedstock price declined compared to the same period of the previous year.

Next, sales revenue by reporting segment. Please look at page 6.

Total sales revenue was down ¥198.5 billion year-on-year. By segment, sales revenue decreased in all segments except Sumitomo Pharma.

As for year-on-year changes of sales revenue by factor, sales price decreased by ¥49.5 billion, volume decreased by ¥121 billion. Foreign exchange transaction variance of foreign subsidiaries' sales revenue decreased by ¥28 billion.

However, the large negative difference in volume is largely due to business restructuring efforts such as the sale of subsidiaries and business withdrawals, and decrease in shipment volume at our sales subsidiary due to a periodic plant maintenance carried out by Petro Rabigh this fiscal year. Next is page 7.

Total core operating income increased by ¥126.8 billion year-on-year. Analyzing by factor: price was +¥6 billion, cost +¥3.5 billion, volume variance including changes in equity in earnings of affiliates was +¥117.3 billion.

I will explain the details on the following pages, but the significant increase in volume variance gain was largely due to profits from business divestitures. Next is performance by segment.

Please turn to page 8. Agro & Life Solutions: core operating income was a profit of ¥28.1 billion, up ¥8.6 billion year-on-year.

Price variance: trade terms improved for overseas crop protection products. Volume variance: there were strong shipments in Japan, India, and other regions, but income declined from exports due to stronger yen, and there was stronger yen's effect on the sales of subsidiaries outside Japan when converted into yen.

Please turn to the next page. ICT & Mobility Solutions: core operating income was a profit of ¥46.5 billion, down ¥13.2 billion year-on-year.

Price variance: selling prices of display-related materials declined. Volume variance: though there was a gain on the sale of large LCD polarizing film business, shipments of display-related materials decreased.

Shipments of semiconductor process materials such as resists and high-purity chemicals increased due to the continued gradual recovery of the semiconductor market. There was lower income from exports due to stronger yen, and the stronger yen's effect on the sales of subsidiaries outside Japan when converted into yen.

Next page. Advanced Medical Solutions segment: core operating income was a gain of ¥300 million, down ¥900 million year-on-year.

Sales at affiliated companies decreased. Please turn to the next page.

For the Essential & Green Materials segment, core operating income was ¥19.8 billion, an improvement of ¥64.1 billion year-on-year. As for the price variance, the profit margin for synthetic resins improved alongside the decline in primary raw material naphtha prices, and the profit margin for alumina also improved.

Regarding the volume and other variances, we recorded a gain on the sale of a portion of our equity in Petro Rabigh, an equity method investee company. In addition, refining margins improved at that company, leading to an improvement in profitability in investments accounted for using the equity method.

Please go to the next page. For the Sumitomo Pharma segment, core operating income was ¥111.2 billion, up by ¥86.9 billion year-on-year.

As for the price difference, due to the impact of NHI drug price revisions within Japan, the selling price fell. Cost differences resulted in a decrease in SG&A due to progress in rationalization and others.

Regarding the volume and other variances, in addition to the increased sales of Orgovyx, a treatment for advanced prostate cancer, and Gemtesa, a treatment for overactive bladder, gains from the partial transfer of equity in the Asia business are included. This concludes the overview of by-segment performance.

Next page will be the explanation of the consolidated statement of financial position. Total assets at the end of December 2025 totaled ¥3,510.4 billion, up by ¥70.6 billion compared to the previous fiscal year end.

Growth in inventory assets due to periodic plant maintenance at the Chiba plant and increased build-up for sales in the fourth quarter and beyond, along with the acquisition of tangible fixed assets for new plant construction and expansions were the primary factors driving the increase. Interest-bearing debt was ¥1,221.5 billion, down by ¥64.6 billion compared to the end of the previous fiscal year.

As a result, the D/E ratio at the end of December 2025 improved by 0.23 times from 1.2 times at the end of March 2025, reaching 0.96 times. Next, I will explain the cash flows.

Please look at page 14. Operating cash flows from operating activities was positive at ¥111.6 billion.

However, cash inflows decreased by ¥29.1 billion year-on-year. Quarterly income before taxes improved.

However, this was influenced by factors such as the deduction of gains from business divestitures from operating cash flow and a significant improvement in working capital last year end based on immediate-term concentrated measures to improve business performance. Cash flow from investing activities was negative ¥39.8 billion, a decrease of ¥96.6 billion year-on-year.

This period also had the sale of part of Sumitomo Pharma's Asian operations. However, the same quarter last year included significant income from the sale of Sumitomo Pharma's shares in Roivant and the sale of Sumitomo Bakelite shares.

As a result, free cash flow was positive ¥71.8 billion, a deterioration of ¥125.7 billion compared to the positive ¥197.5 billion recorded last third quarter. Cash flow from financing activities resulted in a negative ¥100.6 billion due to factors such as loan repayments and dividend payments.

This represents a decrease of ¥41.1 billion in outflows year-on-year. Next, I will explain the outlook for fiscal year 2025.

Please go to page 16. I will explain from the business environment surrounding our company.

Regarding the economic conditions, although investments in the field of technology are firmly supporting the global economy, future prospects remain uncertain due to the expansion of protectionism and increased geopolitical risks. In the main business environment, we use weather symbols to indicate our key business areas and our assessment of their respective environments.

From the top, regarding crop protection chemicals, we expect price competition to continue, and inventory congestion in the distribution chain remains uneven across regions. Regarding the methionine market price, although it recovered in the first half of the fiscal year, we anticipate a continued downward trend in the second half.

Displays are showing steady growth in mobile-related components. Demand for silicon semiconductors has recovered more than anticipated since our previous forecast and is currently showing steady growth.

However, performance continues to vary across different fields. The petrochemical and raw materials market will continue to have low margins.

That concludes the business environment overview. Now, let me explain the consolidated performance summary.

Please turn to page 17. This is the summary of financial forecast for fiscal year 2025.

Core operating income for fiscal year 2025 is forecasted at ¥200 billion, showing improvement over time with an expected increase of ¥15 billion compared to the November performance forecast. As shown in the graph in blue, excluding gains on the divestment of business, profits from business activities improved significantly at Sumitomo Pharma and Essential & Green Materials due to the results of fundamental structural reforms, resulting in a significant increase in profits from approximately ¥80 billion in the previous fiscal year to approximately ¥120 billion in the current fiscal year.

It has largely increased. Furthermore, and as for the profits attributable to the parent, it has increased by ¥1.5 billion to ¥55 billion.

Furthermore, in light of the upward revision due to improved profit and loss, the year-end dividend per share to shareholders will be increased by ¥1.5 from the ¥6 announced in the November financial forecast to ¥7.5 per share. As a result, the annual dividend amount will increase by ¥4.5 from the previous year's ¥9 to ¥13.5.

The payout ratio is expected to be approximately 40%. Please go to page 18.

This is showing the details of the business performance forecast. First, sales revenue is forecasted at ¥2.3 trillion, up by ¥10 billion from the previous forecast.

As for the core operating income, as mentioned before, it is forecasted at ¥200 billion. Net income attributable to owners of the parent, as mentioned before, will be ¥55 billion, an increase of ¥10 billion year-on-year.

The assumptions regarding exchange rates and naphtha prices are as stated on the slide. As for the sales revenue, we expect an increase due to higher shipments of semiconductor processing materials within our ICT & Mobility Solutions segment.

As for core operating income, I will explain the situation by segment on the next slide. Please go to page 19.

As for the full-year business performance by segment, regarding Agro & Life Solutions, Advanced Medical Solutions, Essential & Green Materials, and Sumitomo Pharma segments, these four segments, as you can see here, the previously announced guidance remains unchanged. As for ICT & Mobility, semiconductor processing materials shipments are expected to increase, leading to a slight increase in profit compared to the previously announced guidance by ¥2 billion.

For others and company-wide expenses, compared to the previous forecast, we are expecting a ¥13 billion increase. At the time we made an announcement last time, we considered the uncertainties in the business environments, we have incorporated risks to a certain extent.

Although business activities are now progressing steadily, therefore, we are forecasting an increase in profit compared to the previously announced forecast. This concludes my explanation of financial results and forecasts.

I would now take questions from the participants. Thank you.

Thank you. Watabe from Morgan Stanley.

Thank you for presentation. For Agro & Life Solutions, I have a question.

In the third quarter, there were profits, and sales was not that large, but why was there profit in the third quarter? The differences by region, and what is the situation of inventory adjustment and the movement towards fourth quarter?

The by main products, what is the trend? In the fourth quarter forecast, compared to last year's fourth quarter, you expect a reduction in profits.

Could you tell me about Agro & Life Solutions?

Thank you for your question. For Agro & Life Solutions sector, first, in the third quarter situation, compared to last year, it is true that it is better.

By region, India, and also in Japan, things were very solid. Europe as well, the amount is not that large, but Europe was also firm.

In North America, compared to the same period of previous year, it is at a similar level. South America, it is slightly difficult.

Last year, there was a drought, which is giving impact. Credit constraints about the clients exist, there are difficulties in increasing sales.

Customers with high creditworthiness, in these cases competition is becoming strong. By product, well, in that sense, the main product, indiflin, South America is a main market, but growth is a little slow.

Sales and profit trend, sales is not increasing that much, but profit is increasing. What is the reason for that?

In the same quarter of previous year, compared to the previous quarter of previous year, the impact of foreign exchange rate is seen in each region. There have been increases in local currency, but when converted into yen, there are cases which is flat or slightly declining.

I think that is the impact.

What is the progress of inventory adjustment? From crop protection products, what is your prospect for the next fiscal year?

For inventory, in general, it is moving to an improvement direction. United States and India, we are seeing improvements, but in South America, there's still some inventory remaining.

Towards the next fiscal year, South America is the place where we have to resolve.

Thank you very much.

Thank you.

This is Yamada from Mizuho Securities. Thank you very much for your explanation.

I was told to ask you one question, I'd like to hear about the third quarter situation outlook regarding ICT & Mobility Solutions. In the same way as the previous question related to Agro & Life Solutions, I would like to know the details, especially specifically three months in third quarter, when you are doing analysis of the variances of core operating income.

In three months, it was a -¥5 [billion?] , and in the nine months, it was a -¥3.7 billion.

Year-on-year, it's a +¥1.3 billion is what I think.

For display-related products, the shipment has declined, and thinking about the foreign exchange being negative, that means that the semiconductor was quite performing strongly. In semiconductor, was resist a good performer or and others good, or is resist the contributor?

If so, as DRAM and NAND, the high prices are maintaining, I would like to know the future a trend of this. Thank you very much for your question.

The ICT & Mobility Solutions situation for the third quarter is what you have asked. Looking at the year-on-year basis, just a moment, please.

Regarding semiconductors, from last year, gradually it is recovering. By fields, memory-related area, the DRAM utilization is increasing, and NAND is recovering.

However, depending on the customer, it varies. For DRAM, due to the generation change, the South Korean usage is declining.

For logic usage, Taiwan and China, new plants are being starting their operation and increasing, our shipment volume is on the trend of increasing. However, on the other hand, South Korea and United States is flat.

The resist specifically, is there such factors? With memory, it's going to change a generation.

However, the US capital part is increasing very well. For resist, this is the overall situation.

Compared to last year, the sales is increasing. This time, you have revised upward, so that situation from the third quarter to the fourth quarter, it is a quarter that usually declines, but it's not going to be that way.

Is that the correct understanding?

Yes, I have high expectations, looking forward to it. Thank you.

I'm Miyamoto from SMBC Nikko Securities. Thank you very much.

I also had a question about Agro & Life Solutions. This may be Mr.

Watabe's question. In the third quarter, there was an increase of ¥11.5 billion year-on-year in terms of profit.

In fourth quarter, you expect a decline compared to previous year same quarter. Methionine is showing a declining trend, but there were shipments carried forward, could you tell me what is the impact in particular in Q3?

As Watabe-san mentioned, sales trend is showing a difference. Sales in this segment in Q3 year-on-year is a drop of about ¥4 billion, but profit has increased.

When I see your analysis by factor, looking at the volume variance, in the first half it's -¥3.9, for three months, volume variance is a factor of ¥12 billion increase in profit. On page 23, analysis of sales differences, volume variance at the first half was -¥4 billion, but now is -¥8.4, -¥4.4 in three months.

The sales volume variance is quite a negative, but profit is positive. Could you explain a little more about it?

I think the foreign exchange rate has not changed that much. Please give me a minute.

Yes, thank you for waiting. With regards to the relationship with sales, methionine volume is declining, so as sales, there's a drop.

However, this is not giving a big impact on profit or losses. For crop protection chemicals, India is doing well, in Japan also.

In particular in Japan, from Q4 sales carried forward, in other words, there's a trend of customers placing orders in advance, Q3 has improved, that's a factor for the improvement of Q3. I see.

On page 27, the sales that you have indicated on crop protection, it is flat. For Q3 eight months, there's increase of about ¥2 billion, but volume variance has increased that much.

Why is it so? Page 27, I see.

This is indicated in yen, but if you look at these figures in dollars, it may look different. First, United States, ¥2.6 billion negative, but in local currency, it is nearly flat.

India, it is slightly negative, but in local currency, there's an increase. These are some of the factors.

For sales and profit,

there is no particular major factors.

Understand. Thank you.

In fourth quarter, you expect a decline in profit year-on-year. Could you explain that?

Because shipments were carried forward for crop protection products and methionine sales price is showing a declining trend, so that is taken into consideration.

Understand. Thank you very much.

Thank you very much. This is Umebayashi from Daiwa Securities.

I would like to ask a question regarding Essential & Green Materials. From the second quarter to the third quarter, the trend, the profit and loss has improved by ¥51 billion, and that is due to the Rabigh's share sales.

Other than that, if there are any factors, I would like to know. As a confirmation, Rabigh, the profit that you made from the equity method, is that 37.5% or 15% as of the third quarter?

I wanted to confirm that. Also the third quarter's Essential & Greens, the sales revenue has increased as well, I would like to know the background of that.

I think the fact is that the business performance is doing well. Did the margin improve, or did the petrochemical product sales improve?

Also, the fourth quarter, I believe that there is going to be a periodic plant maintenance, was there a build-up of the inventory due to that or not is what I would like to know.

Thank you very much for your question. Regarding the third quarter's Essentials and Green Materials, as you have pointed out correctly, over here the Petro Rabigh equity sales is included.

When we made a timely disclosure in November, it was a ¥50 billion, and the number that's close to that is incorporated in this. Other than that, there are improvements that were made for Petro Rabigh.

Over here, up to the third quarter, it was 37.5%, our interest was that, and we have applied the equity method. From the fourth quarter, it is going to become 15%.

Regarding refining margin, improvement also occurred, this area has improved as well. In Singapore as well, TPC, due to the improvement of the profit margin, the profit and loss situations have also improved.

Thank you very much. For the sales part, it was Singapore that was doing well in terms of the sales improvement?

Just a moment, please. The products from Rabigh, the sales of those, that compared to the first quarter and the second quarter, the third quarter is showing a larger growth.

From April to June, it has experienced a periodic shutdown for maintenance, and probably to the second quarter, that impact remained. From the third quarter, it returned to the regular sales, and the fourth quarter for the Rabigh manufactured products, we are looking at the same way.

That is reflected in the changes. The impact to the profit is a minor.

These are the factors, is what we think.

Understood very well. Thank you very much.

Thank you. I'm Okazaki from Nomura Securities.

Thank you. About the dividend, I ask a question.

As you have mentioned, this time you're going to increase the dividend. The annual dividend payout ratio is now about 40%.

I think you mentioned the 30% before of the final profit figures may differ. Is that the meaning as a background?

And ¥7.5 for the interim period. Next year, depending on the pharma's milestone, there may be other factors, but basically, you will continue, or it will be rather positive?

You are gradually becoming confident, is this understanding correct about the dividend payment?

Thank you for your question. For dividends, as you mentioned, basically our dividend policy is stable dividend, and with relations to profit, in general, about a 30% is the level.

At the moment, the profit for this year, we made an upward revision to ¥55 billion. It is still in the process of recovery.

In terms of dividend payout ratio, a stable minimum dividend payment is going to be made, that is our feeling, instead of 30%, it is now 40%. Compared to our initial plan, profit has increased.

About will consider continuing in the future, take that into consideration, we decided to have this amount of dividend.

This is a minimum level, more than 38.7. You have not yet determined what would be the performance next year, but depending on the situation, there may be other factors, but among those, ¥7.5 at the moment is amount that you want to keep.

Is my understanding correct?

Yes, you are right.

That is all. Thank you very much.

This is my second time. Regarding Essential & Green Materials, at the flash report, it says that the business transfer gain is ¥55.8 billion, and it was consisted by Rabigh and others, but if you exclude that, it is in the red.

The fourth quarter periodic maintenance and shutdown, when we talk about the refining margin right now, I think the Petro Rabigh performances are improving as well, and there's a business integrations moving forward, but what is the impact of that, and what are you looking at towards the overall Essential & Green Materials?

Thank you very much for the divestment gain. At the flash report, it says ¥55.8 billion.

Yes, up to the third quarter cumulative figure, Petro Rabigh, other than Petro Rabigh, we have divested several companies. Nihon A&L, which is already disclosed, including that, in total is ¥55.8 billion.

Towards the turning around into black ink, regarding Petro Rabigh, it's difficult to share with you what's going to happen in the future, but for the refining margin, and probably all of you can assume what the situation is going to be, and I think you can assume in that way. How it can turn around to profit-making, we're in the midst of setting the budget for next fiscal year, I would like to refrain from commenting.

The fourth quarter non-recorded loss concentrating, it's mainly in Essentials & Green Materials, is that correct?

Including essential as well.

To a certain extent, there are planned items from restructuring, but there are some items that we are aware of, such as impairment, but we are looking at it to that extent.

There is, are there things that is going to work positive in the next fiscal year, such as a decline in depreciation?

Yes, that's how we are understanding it. However, at this point, it's difficult to give you the full answer.

Understood. Thank you.

Thank you. I'm Yamada from Mizuho Securities.

This is a detailed point. Under others this time, though there is a upward revision, for Q4 you expect some level of negative figures.

Also, these are corporate expenses, it is possible that that will surface on Q4 and things are become more untransparent. So ¥20 to ¥25 billion corporate costs can be expected from next year onwards.

What is the trend of that? Could you tell me that?

Thank you. Under corporate expenses, as the corporate expenses, in particular R&D expenses, are included here.

Recently here, regenerative cell research is still under development, the progress of research expenses is very difficult to make a projection. These are also included.

We don't expect a large drop next year, but we expect to maintain a certain level in terms of these expenses.

About more than ¥10 billion R&D will be spent for regenerative cells, and then that is surfaced in a specific quarter like this.

Yes, that is what it is.

Yes, thank you very much.