November 10, 2022
Consolidated First Half Results
April 1, 2022 through September 30, 2022 of Fiscal Year Ending on March 31, 2023

Figures in Million Yen, unless otherwise noted
1. Net sales and Income

from April 1, 2022 through September 30, 2022
Net sales(Note1)

OperatingIncome

Ordinary
IncomeNet Income

Net Income
Per Share(Note1)

Current Fiscal Year (FY 2023)
First Half (H1)

17,532

1,205

1,361

1,255

116.19Yen

Converted into Million
U.S. dollars (Note2)

130.8

9.0

10.2

9.4

US$0.87

Last Fiscal Year (FY 2022) H1

15,653

1,0511,24582982.04Yen

Change to FY 2023 H1from FY 2022 H1

1,878153116425－

Note1: “Net Income” in this paper is “Net Income attributable to owners of parent”
in current accounting standards
Note2: U.S. dollar amounts are converted from Yen, for convenience only,at the rate of US$1.00 = ¥134.04

2. Main Segment figures

Toner

Electronic Materials

FY 2022 H1

FY 2023 H1

Change to FY2023 H1from FY 2022 H1

5,616

7,322

1,705

433

1,150717

3,094

2,948

▲146671202▲468Net sales

4,935

5,234298

Operating Income▲33▲129▲95Net sales

1,893

1,907

1311213725

Net sales
Operating Income
Net sales
Operating Income

Functional Sheet

Security MediaOperating Income

3. Financial Position

September 30, 2022
Total Assets

EquityCapital toAsset Ratio

EquityPer Share

End of FY 2023 H1
September 30, 2022

43,776

19,20334.1%

1,243.42Yen

Converted into Million
U.S. dollars (Note)

302.3

132.6

-US$8.59

End of FY 2022
43,574
17,616
30.9%
March 31, 2022
Note: U.S. dollar amounts are converted from Yen, for convenience only,at the rate of US$1.00 = ¥144.81

1,113.45Yen

4. Forecast of Current Fiscal Year, which will end on March 31, 2023
Forecast released(Release Date)
Whole FY(July 22,2022)(Note)

NetsalesOperating
IncomeOrdinary
IncomeNet Income

Net Income
Per Share

34,500

1,500

1,550

1,500

134.99Yen(Note)

Note: “Net Income” in this paper is “Net Income attributable to owners of parent”
in current accounting standards

Observation of Current First Half Result
During the First Half (H1) of the Fiscal Year (FY) 2023 (April toSeptember, 2022), the sales of Semiconductor-related business and Tonerbusiness that occupy large portion of TOMOEGAWA’s consolidated net sales,
kept its strong pace since last FY.

In addition, progress of the Yen

depreciation increased Yen-denominated value of overseas sales.

As aresult, we recorded H1 sales of ¥17,532 million, up ¥1,878 million or +12.0%
from that of last FY.
As for the profit, our consolidated Operating Income was ¥1,205
million, up ¥153 million or +14.6% from last FY H1 number. Factors
contributed to this growth are the sales surge that includes the Yen
depreciation effect and the sales price hike to pass along related costincreases. The effects of those are large enough to absorb the material andfuel cost increase.
The consolidated Ordinary Income is ¥1,361 million, up ¥116 million
or +9.4% from that of last FY H1, thanks largely to the equity gain from anaffiliated company that handles processing of optical film used for displays.
Net Income is ¥1,255 million, up ¥425 million or +51.3% from that of last FY
H1.

The main reason for the increase is the gain from the sales of the landand buildings of the US toner factory, which ceased operations in September
2020, in the First Quarter of current FY.

Overview of main segment< Toner >As for the Toner Segment , Net sales were ¥7,322 million, up ¥1,705
million or +30.4% from that of last FY H1, and Segment (operating) income
was ¥1,150 million, up ¥717 million or +165.7% from that of last FY H1.
Thanks to the continuation of strong demand, orders remained
steady, while the Yen depreciation trend in the foreign exchange market also
provided boost to the sales.
In terms of profit, although the Segment was affected by raw
material and fuel price hike, we could pass some of such cost increase onto
sales prices.

In addition, fixed cost reductions derived from the closure of theUS toner factory in September 2020 still contributes to profits.

By prioritized production of high-margin toners and introduction of
raw material from new suppliers, we were able to mitigate the negative impact
on sales and profit from the toner raw material procurement difficulties causedby suppliers' situation, which was a concern at the beginning of current FY.

< Electronic Materials >As for the Electronic Materials Segment, Net sales were ¥2,948
million, down ¥146 million or ▲4.7% from that of last FY H1, and Segment(operating) income was ¥202 million, down ¥468 million or ▲69.8% from thatof last FY H1.
While the sales of the semiconductor-related products and electronicmaterials remained strong since Last FY H1, the optical film-related businessexperienced a sales decline due to the conclusion of one-time special demandprojects.
Profits decreased from that of last FY H1, mainly due to lower salesin the optical film-related business.

< Functional Sheet >As for the Functional Sheet Segment, net sales were ¥5,234 million,up ¥298 million or +6.1% from that of last FY H1, and Segment (operating)loss was ¥129 million (loss of ¥33 million in last FY H1).
While the existing business continued to shrink, the businessfocused on expanding sales of some products for which demand was strong,
including products of its subsidiaries and some of cost increase was passed
onto sales price increase to customers, resulting in current H1 sales increasefrom that of last FY H1.
On the cost front, structural reforms implemented in December 2019and March 2022, including the shutdown of two large paper-manufacturing
facilities, showed positive effects, still, costs were negatively affected byhigher raw material and fuel prices.

< Security Media >As for the Security Media Segment, Net sales were ¥1,907 million,up ¥13 million or +0.7% from that of last FY H1, and Segment (operating)income was ¥137 million, up ¥25 million or +22.7% from that of last FY H1.

Although demand remained stagnant for products like passbooks, amajor product category, Net sales increased thanks to the expanded sales ofcard-related products and other products.

The Segment worked to increase

the in-house production ratio in order to reduce fixed costs.

Explanation regarding Financial Position
Total assets amounted to ¥43,776 million at the end of the Second
Quarter of current FY, up ¥201 million from the end of last FY.

Current

assets totaled ¥21,721 million, up ¥326 million from the end of last FY.

Thiswas mainly due to an increase in cash and deposits resulting from adecrease in working capital requirements and an increase in inventories,
despite a decrease in consumption taxes receivable recorded at the end oflast FY due to a refund.

Non-current assets totaled ¥22,054 million, adecrease of ¥125 million from the end of last FY.

This was mainly due tothe sales of the land and buildings of the US toner factory and a decrease inproperty, plant and equipment value by depreciation over time.
Total liabilities amounted to ¥24,572 million, down ¥1,385 million
from the end of last FY.

Current liabilities totaled ¥14,858 million, up ¥14

million from the end of last FY.

This was mainly due to an increase incurrent portion of long-term loans payable, despite a decrease in notes andaccounts payable for purchase of raw materials and a decrease in accrued
expenses for miscellaneous expenses from the end of last FY.

Non-current

liabilities totaled ¥9,714 million, down ¥1,400 million from the end of last FY,
mainly due to the repayment of long-term debt.

Interest-bearing debt

decreased ¥625 million from the end of last FY to ¥12,029 million.
Total equity amounted to ¥19,203 million, up ¥1,586 million from theend of last FY.

This was due to the recording of net Income attributable toowners of parent, a decrease in treasury stock resulting from the conversion
of a consolidated subsidiary into a wholly owned subsidiary through a shareexchange, and an increase in foreign currency translation adjustments
resulting from the depreciation of the yen against the dollar.

The Forecast of the reminder of FY2023
As for the Second Half (H2) of current FY and beyond, the market ofdisplay-related products has already entered an adjustment phase since thissummer, and in the Toner business, orders are expected to decline due toinventory adjustments, mainly from major customers.
In the Semiconductor-related business, although we expect growthover the medium to long term, we believe that the supply-demand
adjustment that began in the consumer products market will cascade into theautomotive and other markets in H2 of current FY and beyond.

In addition,

the price hikes of raw material and fuel will take full effect on cost of goods
sold, starting in H2 of current FY and beyond, unlike during current H1 whenthe effect of price increase only reached to work in progress and finishedgoods inventories stage.

Since we will make strategic investments andspending for maintenance and renewal that are expected to benefit us in thefuture, for the time being the impact of those increased spending is expected
to precede the return.
To navigate under such a difficult situation, we will further strengthen
the approaches of sales price increase to pass on cost increase, and ofproduction cost reduction through productivity improvement.
In addition, our efforts to strengthen our earnings base by shifting
our business portfolio and promoting structural reforms are steadily yielding
results, and we will further reallocate management resources to launch andmass-produce various new products.
We have decided to maintain the full-year forecast unchanged fromthat announced on July 22, 2022, taking into account the upward swing in
the Second Quarter and an increase in profit attributable to the assumed
depreciation of the yen against the dollar to around 140 yen per dollar,
despite the expected deterioration of the business environment and cost
increases in H2 of current FY and beyond.
By doing so, we make sure to realize our most recent forecast
numbers.

Your continuous support of TOMOEGAWA will be greatly appreciated.