Summary of Consolidated Financial Statements for the Third Quarter Fiscal 2023 (JPGAAP)

January 31, 2024
Tokuyama Corporation
Stock exchange listings:
Tokyo
Local Code :4043(URL https://www.tokuyama.co.jp/eng/)
Representative:
Hiroshi Yokota, President and Representative Director
Contact:
Tetsuya Nakano, General Manager, Corporate Communications & Investor Relations Dept.
+81-3-5207-2552
Scheduled date of dividends payout :Preparation of supplementary quarterly explanatory materials: Yes
Quarterly business results IR briefing to be held:
Yes (for institutional investors and analysts)

1. Consolidated results for fiscal Third quarter ended Dec. 31, 2023 (Apr. 1, 2023 – Dec. 31. 2023)(1) Performance

Note: All amounts are rounded down to the nearest million yen.

Net sales
Year-on(millions ofyear change
yen)
[%]

Operating profit
Year-on(millions ofyear change
yen)
[%]

Ordinary profit
Year-on(millions ofyear change
yen)
[%]

Third Quarter Fiscal 2023
250,255(3.4)
16,93728.7
16,98027.5
Third Quarter Fiscal 2022
259,01022.4
13,161(23.1)
13,313(24.6)(Note) Comprehensive income: 3rd Q FY23: 16,734 million yen [97.4%] 3rd Q FY22: 8,478 million yen [(42.1)%]
Profit attributable toowners of parent
Year-on-year(millions of yen)change [%]Third Quarter Fiscal 2023
Third Quarter Fiscal 2022

11,907
8,526

39.6(36.3)

Total assets

Net assets(millions of yen)(millions of yen)

Basic earnings per
share

Diluted earnings
per share

(yen)

(yen)

165.49118.51-(2) Consolidated financial position

December 31, 2023
March 31, 2023
(Reference)

457,603478,342

Shareholders' equity:

Fiscal 2022, ended
Mar 31, 2023
Fiscal 2023, ending
Mar 31, 2024
Fiscal 2023
（Forecast）(yen)

240,229 million yen

(yen)

(yen)

-

35.00

-

-

35.00

-

Net assets per share
(yen)

52.5
48.0

3,338.84
3,189.01

Mar. 31, 2023:

Annual dividends per share
2nd quarter 3rd quarter
Year-end

1st quarter（Period）

250,998
241,602

Dec. 31, 2023:

2. Dividends

Shareholders’Equity ratio(%)

229,450 million yen

Total

(yen)

(yen)

35.00

70.00

35.00

70.00

(Note) Revision of the latest dividends forecast: No

3. Consolidated performance forecast for fiscal 2023 (April 1, 2023 - March 31, 2024)
Net sales
Fiscal 2023

(millions ofyen)

345,000(% indicates the rate of change over the corresponding previous periods respectively)
attributable to Basic earnings
Operating profit Ordinary profit Profit
owners of parent
per share

[%]

(1.9)

(millions ofyen)

26,000[%]81.3(millions ofyen)

26,000[%]75.9(millions ofyen)

18,000

[%]

92.2

(yen)

250.17(Note) Revision of the latest consolidated performance forecast: Yes* The Company announced the release, “Notice concerning Revision of Performance Forecast for Fiscal 2023,” on Jan. 31, 2024.

*Notes(1) Changes in significant subsidiaries during this period: No(2) Application of accounting methods specific to the preparation of the quarterly consolidated
financial statements: Yes(Note) For more details, please refer to “2. Quarterly Consolidated Financial Statements and (5) Notes on
Quarterly Consolidated Financial Statements (Application of accounting methods specific to the preparation of thequarterly consolidated financial statements)” on page 12 of the Accompanying Materials to this Summary of
Quarterly Consolidated Financial Statement.

(3) Changes of accounting policies, changes in accounting estimates, and retrospective restatements
i. Changes in accounting policy by revision of accounting standards: No
ii. Changes in accounting policy other than the above:Yesiii. Changes in accounting estimates:
Yes
No
iv. Retrospective restatements:(Note) For more details, please refer to “2. Quarterly Consolidated Financial Statements and (5) Notes on
Quarterly Consolidated Financial Statements (Changes in accounting policies that are difficult to distinguish fromchanges in accounting estimates)” on page 12 of the Accompanying Materials to this Summary of Quarterly
Consolidated Financial Statement.
(4) Number of shares issued (in common stock)
Number of shares issued at end of period
3rd Quarteri.
(including treasury stock):
Fiscal 2023:
3rd Quarterii. Number of treasury stock at end of period:
Fiscal 2023:
3rd Quarteriii. Average number of shares over period:
Fiscal 2023:

72,088,327

Fiscal 2022:

72,088,327

138,192

Fiscal 2022:

137,882

71,951,137

3rd Quarter
Fiscal 2022:

71,951,249(Note) Notice on the implementation of quarterly review proceduresThis summary of quarterly consolidated financial statements is not subject to quarterly review procedures in line with
the Financial Instruments and Exchange Act. At the point of disclosure of this summary of quarterly consolidated
financial statements, the quarterly consolidated financial statements review procedures in line with the Financial
Instruments and Exchange Act are underway.
(Note) Cautions pertaining to appropriate use of performance forecast and other particular items(Cautions related to Forward-looking statement)
The performance forecast and other forward-looking statements contained in this material have been prepared on thebasis of information available at this point and certain assumptions which are judged to be rational, and may besubstantially different from the actual performance because of various factors that may arise from now on.
(Access to supplementary explanations on business results)
The Company also provides supplementary materials “Presentation for IR Meeting” through TDnet at the same date.

Contents for Accompanying Materials
1. Qualitative information on consolidated results for this quarter…………………

P. 2(1) Explanation concerning business results…………………

P. 2(2) Explanation concerning financial position…………………

P. 7…………………

P. 7

2. Quarterly Consolidated Financial Statements…………………

P. 8(1) Quarterly Consolidated Balance Sheets…………………

P. 8(2) Quarterly Consolidated Statements of Income…………………

P. 10(3) Quarterly Consolidated Statements of Comprehensive Income…………………

P. 11(4) Notes on Quarterly Consolidated Financial Statements…………………

P. 12(3) Explanation concerning information related to future
prediction such as consolidated performance forecast

11. Qualitative information on consolidated results for this quarter(1) Explanation concerning business results
Consolidated results for the third quarter fiscal 2023 (April 1, 2023 – December 31, 2023) aresummarized as follows:(Unit: Millions of yen)
OperatingprofitNet sales

Ordinary profit

Profitattributable toowners ofparentThird Quarter Fiscal 2023

250,255

16,937

16,98011,907

Third Quarter Fiscal 2022

259,010

13,161

13,313

8,526

(3.4)

28.7

27.5

39.6

Rate of change (%)

Net sales
Consolidated net sales decreased 3.4%, or ¥ 8,754 million compared with the corresponding
period of the previous year, to ¥ 250,255 million. Despite higher sales prices for cement androbust growth in sales of healthcare related products, this decline largely reflected weak sales ofsemiconductor related products on the back of a slowdown in the semiconductor market.
Cost of sales
Cost of sales decreased 5.8%, or ¥ 10,947 million compared with the corresponding period of
the previous year, to ¥ 177,719 million. This was mainly due to the decline in sales volume anddrop in fuel and raw material prices.
SG&A expenses
SG&A expenses decreased 2.8%, or ¥ 1,582 million compared with the corresponding period of
the previous year, to ¥ 55,598 million mainly due to the decline in logistics costs coinciding withsluggishness in sales volume.
Operating profit
Operating profit increased 28.7%, or ¥ 3,775 million compared with the corresponding period of
the previous consolidated fiscal year, to ¥ 16,937 million. Despite weak sales of semiconductor
related products on the back of a slowdown in the semiconductor market, this upswing wasessentially attributable to higher sales prices for cement and chemicals in Japan as well as robust
growth in sales of healthcare related products.

2

Non-operating income/expenses, Ordinary profit
Non-operating income/expenses deteriorated by ¥ 108 million compared with the corresponding
period of the previous fiscal year. Despite the decline in foreign exchange losses, thisdeterioration largely reflected a downturn in share of profit of entities accounted for using equity
method.
As a result of the above, ordinary profit decreased 27.5 %, or ¥ 3,667 million compared with thecorresponding period of the previous consolidated fiscal year, to ¥ 16,980 million.
Extraordinary income/losses, Profit before income taxes, Profit, Profit attributable toowners of parent
Extraordinary income/losses improved by ¥ 446 million compared with the corresponding
period of the previous consolidated fiscal year.
As a result of the above, profit before income taxes increased 31.2%, or ¥ 4,113 million
compared with the corresponding period of the previous consolidated fiscal year, to ¥ 17,283
million.
Profit after deducting income taxes calculated in an appropriate way increased 39.0%, or ¥ 3,306
million compared with the corresponding period of the previous consolidated fiscal year, to¥ 11,778 million.
Profit attributable to owners of parent increased 39.6%, or ¥ 3,380 million compared with thecorresponding period of the previous consolidated fiscal year, to ¥ 11,907 million.

3

(Operating results by segment)
Effective from the first quarter of the fiscal year under review, the Company has reviewed thename of one of its reportable segments. In specific terms, the Electronic Materials Segment
has been renamed the Electronic & Advanced Materials Segment. This change applies only tothe aforementioned segment name and has no impact on segment information. The following
comparison with the corresponding period of the previous fiscal year reflects this change insegment name.
Third Quarter
Fiscal 2023
Operating
Net sales
Profit(loss)

Third Quarter
Fiscal 2022
Operating
Net sales
Profit(loss)(Unit: Millions of yen)
Rate of change(%)
Net sales

OperatingprofitChemicals

86,2858,881

86,432

4,729

(0.2)

87.8

Cement50,663

4,769

43,852(2,898)

15.5-

Electronic &Advanced Materials

54,064551

67,076

6,955(19.4)(92.1)

Life Science

29,433

5,963

27,940

5,696

5.3

4.7

Eco Business

5,438

(355)

10,365316(47.5)-

Others32,301

1,232

33,597

2,114

(3.9)

(41.7)

Total

258,186

21,044

269,265

16,914

(4.1)

24.4

Adjustment(7,930)(4,107)(10,255)(3,752)--

Figures in quarterly
consolidated profit
250,255
16,937
13,161
259,010(3.4)
statement(Note) Sales and operating profit (loss) in each segment include inter-segment transactions.

28.7

Chemicals
Despite a decrease in sales volume, caustic soda earnings grew owing to successful efforts torevise sales prices in Japan.
Vinyl chloride monomer and vinyl chloride resin earnings declined due to such factors as thedecline in sales volumes of both products as well as the downturn in overseas vinyl chloride
monomer market price.
Despite lower sales volumes, soda ash, calcium chloride, and other products earnings increased
owing to successful efforts to revise sales prices.
As a result of the above, segment net sales decreased 0.2% compared with the corresponding
period of the previous consolidated fiscal year, to ¥ 86,285 million and operating profit increased
87.8 % to ¥ 8,881 million. The segment reported higher earnings on lower sales.
4Cement
Despite a slightly decrease in sales volume year-on-year in Japan, cement earnings grew owing tosuccessful efforts to revise sales prices.
As a result of the above, segment net sales increased 15.5% compared with the corresponding
period of the previous year, to ¥ 50,663 million and operating profit amounted to ¥ 4,769
million (Posted operating loss of ¥ 2,898 million in the corresponding period of the previousyear).
Electronic & Advanced Materials
Semiconductor-grade polycrystalline silicon earnings declined. This was mainly due to the decline
in sales volume owing to a slowdown in the semiconductor market.
IC chemical earnings improved. This mainly reflected the increase in operating rates at Formosa
Tokuyama Advanced Chemicals Co., Ltd. In Taiwan and successful efforts to reduce costs.
Fumed silica earnings declined due to the decrease in sales volume attributable to a slowdown inthe semiconductor market and economic conditions in China.
Thermal management material earnings increased. This reflected robust sales volumes of powerdevice applications.
As a result of the above, segment net sales decreased 19.4% compared with the corresponding
period of the previous consolidated fiscal year, to ¥ 54,064 million and operating profit
decreased 92.1% to ¥ 551 million. The segment reported lower earnings on lower sales.
Life Science
Dental materials results remained in line with the corresponding period of the previous fiscal
year thanks largely to robust sales in Japan and overseas.
API and intermediate results were also in line with the corresponding period of the previous
fiscal year. Despite a decrease in the sales volume of generic pharmaceutical, this was mainly due
to successful efforts to reduce costs.
Plastic lens-related material results remained in line with the corresponding period of theprevious fiscal year. This reflected robust sales volumes of photochromic dye materials foreyeglass lenses.
As a result of the above, segment net sales increased 5.3% compared with the corresponding
period of the previous consolidated fiscal year, to ¥ 29,433 million and operating profit increased
4.7% to ¥ 5,963 million. The segment reported higher earnings on higher sales.
Eco BusinessIon exchange membrane earnings decreased owing to the decline in shipments.
In waste gypsum board recycling, earnings decreased owing mainly to a decline in the volume ofwaste gypsum board collected.
5In plastic window sashes, Excel Shanon Corporation was removed from the Company’s scope of
consolidation effective from the second quarter of the fiscal year under review. This reflected thetransfer of a portion of the company’s shares.
Segment net sales decreased 47.5% compared with the corresponding period of the previous year,
to ¥ 5,438 million and operating loss amounted to ¥ 355 million (posted operating profit of¥ 316 million in the corresponding period of the previous year).

6(2) Explanation concerning financial position(Status of assets, liabilities and net assets)
As of December 31, 2023, total assets amounted to ¥ 457,603 million, an decrease of ¥ 20,738
million compared with those as of March 31, 2023.
Despite the increase of property, plant and equipment, merchandise and finished goods,
investment securities of ¥ 10,313 million, ¥ 7,407 million, ¥ 4,092 million respectively, thisdecrease primarily reflects the decrease of cash and deposits, accounts receivable - trade, rawmaterials and supplies of ¥ 16,554 million, ¥ 14,238 million, and ¥ 11,663 million respectively.
Total liabilities amounted to ¥ 206,604 million, an decrease of ¥ 30,134 million compared withthose as of March 31, 2023.
Despite the increase of short-term borrowings, and commercial papers of ¥ 15,738 million, and¥ 15,000 million respectively, this decrease primarily reflects the decrease of long-termborrowings and current portion of long-term borrowings, other current liabilities, notes andaccounts payable - trade of ¥ 55,292 million, ¥ 3,537 million, ¥ 3,407 million.
Net assets totaled ¥ 250,998 million, an increase of ¥ 9,396 million compared with those as ofMarch 31, 2023.
This mainly reflected the increase of ¥ 6,722 million in retained earnings primarily due to posting
profit attributable, and the increase of ¥ 3,128 million in Valuation difference on
available-for-sale securities.

(3) Explanation concerning information related to future prediction such as
consolidated performance forecast
Based on the trends in the semiconductor market, etc., the Company has revised the performance
forecast, announced on October 27, 2023. For further details, please see the Company’s news
release, “Notice concerning Revision of Performance Forecast for Fiscal 2023,” dated January 31,
2024.
The performance forecast has been prepared on the basis of information available at this pointand certain assumptions which are judged to be rational, and may be substantially different fromthe actual performance because of various factors that may arise from now on.

7

2. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Millions of yen)
12/31/2023

3/31/2023

AssetsCurrent assets
Cash and deposits
Notes receivable - trade
Accounts receivable - trade
Lease receivables
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Leased assets
Accumulated depreciation
Leased assets, net
Construction in progress
Total property, plant and equipment
Intangible assets
Goodwill
Leased assets
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Retirement benefit asset
Other
Allowance for investment loss
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

8

68,0808,672
83,38811
24,111
19,90237,31012,282(71)
253,689

51,526
9,644
69,15011
31,51919,78025,646
11,915(80)
219,114

116,841(80,555)
36,285
487,746(430,082)
57,66324,395(21,125)
3,269
33,033
9,788(4,124)
5,664
19,419155,336

118,310(80,118)
38,191
493,048(431,692)
61,35524,148(20,597)
3,551
33,083
10,709(4,201)
6,507
22,960165,649

349
17
3,098
3,465

272
23
3,164
3,460

29,4992,185
19,416
10,023
4,777
(7)
(44)
65,850224,653478,342

33,592
2,135
19,347
9,629
4,728
(7)
(47)
69,379238,489
457,603

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Commercial papers
Current portion of long-term borrowings
Lease liabilities
Income taxes payable
Provision for bonuses
Provision for repairs
Provision for decommissioning and removal
Provision for product warranties
Provision for loss on compensation for damage
Provision for environmental measures
Provision for loss on disaster
Provision for contract loss
Asset retirement obligations
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term borrowings
Lease liabilities
Deferred tax liabilities
Provision for retirement benefits for directors (and other officers)
Provision for share awards
Provision for repairs
Provision for decommissioning and removal
Allowance for loss on compensation for building materials
Provision for environmental measures
Retirement benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

9

3/31/2023(Millions of yen)
12/31/2023

49,822
2,491
－
1,407
1,196
1,231
2,768
3,922
519
72
129
5
15
469
63
24,12988,244

46,414
18,22915,000
1,966
1,202
4,177
1,326
4,230
347
69
20
－
－
－
－
20,591
113,575

15,000118,333
4,019
228
197
37
1,513
631
48
90
2,113
11
6,269
148,495
236,739

15,00062,481
4,809
242
127
77
1,855
309
22
81
1,775
13
6,232
93,029206,604

10,00023,443
184,852(414)
217,880

10,00022,960191,574(413)
224,120

4,053
(3)
5,630
1,889
11,56912,151
241,602478,342

7,182
(0)
7,393
1,533
16,108
10,768250,998
457,603(2) Quarterly Consolidated Statements of Income
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Selling expenses
General and administrative expenses
Total selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity method
Outsourcing service income
Rental income from non-current assets
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Subsidy income
Gain on insurance claims
Gain on step acquisitions
Other
Total extraordinary income
Extraordinary losses
Loss on sale of non-current assets
Impairment losses
Loss on disaster
Loss on tax purpose reduction entry of non-current assets
Loss on disposal of non-current assets
Loss on sale of shares of subsidiaries and associates
Retirement benefit expenses
Other
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent

10

Q3 FY2022 YTD
259,010
188,666
70,343(Millions of yen)
Q3 FY2023 YTD
250,255
177,719
72,53636,147
21,03457,181
13,161

32,77522,82355,59816,937

112
559
1,465
787
367
－
1,733
5,026

173
541
678
411
385
4
1,445
3,639

1,182
796
2,896
4,875
13,313

1,095
－
2,501
3,596
16,980

62
141
44
17
5
19
289

53
609
76
－
－
－
739

9
14
50
26
268
－
62
－
432
13,170
4,698
8,471
(54)
8,526

48
－
17
28
279
25
－
35
436
17,283
5,505
11,778(128)
11,907

(3) Quarterly Consolidated Statements of Comprehensive Income
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted for using
equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

11

Q3 FY2022 YTD
8,471(Millions of yen)
Q3 FY2023 YTD
11,778

(140)
5
219
(172)

3,126
2
1,931
(355)

92

251

6
8,478

4,956
16,7348,463
14

16,458276

(4) Notes on Quarterly Consolidated Financial Statements(Going Concern Assumption)
Not applicable.
(Major Changes in Shareholders’ Equity)
Not applicable.
(Changes in significant subsidiaries during this period)
Not applicable.

(Application of accounting methods specific to the preparation of the quarterly
consolidated financial statements)(Calculation of Tax Expense)
The Company rationally estimated the effective tax rate after the application of accounting policy
for deferred tax, which was applied to the profit/loss before income tax for the consolidated
fiscal year under review including the second quarter consolidated accounting period for the
consolidated fiscal year ending March 31, 2023, and calculated the tax expense by multiplying theestimated effective tax rate to the profit/loss before income tax. However, if the application ofsaid estimated effective tax rate reduces the rationality of the calculation of tax expense, theCompany applies the effective statutory tax rate.
(Changes in accounting policies that are difficult to distinguish from changes inaccounting estimates)(Changes in the depreciation method for Property, plant and equipment)
Tokuyama and the vast majority of its consolidated subsidiaries in Japan have to date largely
adopted the declining balance method when depreciating property, plant and equipment.
Effective from the first quarter of the fiscal year under review, the Company has changed its
accounting policy for depreciation, adopting the straight-line method. In light of the increased
monetary significance of depreciation expenses attributable to the capital investment undertaken
under Medium-Term Management Plan 2025, Tokuyama reexamined the method it had
previously adopted when depreciating property, plant and equipment. As far as the capital
investment undertaken to minimize the environmental impact of its operations while ensuring
the long-term, stable use of existing equipment and facilities, including investments in improving
processes, promoting efficient energy consumption, and renewing facilities, and to build the
supply system necessary to expand vigorously into domestic and overseas markets in growing
12

businesses are concerned, the Company has determined that the equal allocation of acquisition
costs over the useful life of each asset using the straight-line method will more accurately reflect
the actual status of operations.
As far as the third quarter of the fiscal year under review is concerned, operating profit increased¥2,245 million, and both ordinary profit and profit before income taxes climbed ¥2,280 million
compared with the corresponding amounts based on the previous depreciation method.

13