Sumitomo Chemical Company (4005) investor relations material

Executive summary

• FY 2025 saw strong business recovery, with core operating income rising 48.3% to ¥208.4 billion and net income attributable to owners of the parent increasing 57.9% to ¥60.9 billion, despite a 10.7% drop in sales revenue to ¥2,328.5 billion.

• FY 2026 guidance projects solid earnings growth, led by Agro & Life Solutions (AGL) and ICT & Mobility Solutions (ICTM), with a continued portfolio shift and strategic focus on biorationals, advanced semiconductors, and life sciences.

• Nearly 60% of core operating income now comes from AGL and ICTM, reducing reliance on P&P.

• Operating income declined 21.4% to ¥151.7 billion, but total comprehensive income rebounded to ¥187.9 billion from a loss in FY2024.

• The company maintained stable cash flows from operations and improved its equity ratio to 29.6%.

Financial highlights

• FY 2025 sales revenue: ¥2,328.5 billion, down ¥277.8 billion year-over-year due to divestitures.

• Core operating income: ¥208.4 billion, up ¥68 billion year-over-year.

• Net income attributable to owners of the parent: ¥60.9 billion, up ¥22.4 billion year-over-year.

• Basic earnings per share increased to ¥37.16 from ¥23.59 year-over-year.

• FY 2026 forecast: sales revenue ¥2,360 billion (+¥31.5 billion), core operating income ¥215 billion (+¥6.6 billion), net income ¥70 billion.

Outlook and guidance

• FY 2026 expects continued growth in AGL and EGM, with ICTM facing headwinds from semiconductor shortages but anticipating recovery.

• Dividend forecast for FY2026 is ¥16 per share, with a payout ratio of 37.7% and a target of ¥24 per share in the future.

• Underlying performance (excluding one-time gains) is expected to see a significant increase in income.

• Assumptions include an exchange rate of ¥155/$ and naphtha price of ¥92,000/kl.