April 26, 2019

Summary of Fiscal 2018
(The Fiscal Year ended March 31, 2019)
Tokuyama Corporation
1. Consolidation
Classification
The number of consolidated
subsidiaries
The number of subsidiaries andaffiliates by the equity method

Fiscal 2018

Fiscal 2017

Changes

52

49

+3

9

10

(1)

2. Summary of performance and other corporate data (consolidated)(Unit: Billions of yen, except number of employees)

Fiscal 2018
Net s ales
O perating prof it
Or dinar y pr ofit
Pr ofit a t t r i b u t a b l e t o o w n e r s o f p a r e n t
Basic earnings per share (Unit: yen)
Capital ex penditur es
Depreciation and amortization
R&D ex penses
F inancial incom e and expenses

Fiscal 2017

324.6
35.2
33.4
34.2
493.26
18.5
15.0
8.0
(1.9)

Changes

308.0
41.2
36.1
19.6
259.81
15.9
13.9
7.9
(3.2)

+16.5
(6.0)
(2.7)
+14.5
+233.45
+2.6
+1.1
+0.1
+1.2

* The Company consolidated its common shares at a ratio of one share for each five shares effective as of October 1,
2017. On this basis, basic earnings per share data is calculated on the assumption that the consolidation of shares
was conducted as of the beginning of the preceding fiscal year.

As of March 31,
2019

As of March 31,
2018

128.9
5,471

139.9
4,889

Interes t- bear ing debt
Num ber of em ployees

Changes(10.9)+582

3. Net sales and operating profit by business segment (year on year)(Unit: Billions of yen)

FY2018Operating
Net sales
profit

FY2017
Operating
Net sales
profitChanges
Operating
Net sales
profitChemicals

98.3

16.8

93.5

16.1

+4.8

+0.6

Specialty Products

59.6

9.9

58.6

11.0

+0.9

(1.0)

Cement

92.3

3.2

87.3

4.5

+5.0

(1.3)

Life & Amenity

54.3

3.2

51.5

3.7

+2.8

(0.4)

Others

62.3

4.3

54.5

6.2

+7.8

(1.8)

Total

367.1

37.5

345.6

41.6

+21.4

(4.1)

Inter-segment
eliminations andcorporate-wide expenses(42.5)(2.3)(37.6)

(0.4)

(4.8)

(1.8)

Consolidated results

324.6

35.2

308.0

41.2

+16.5

(6.0)

○ In the Chemicals segment, both sales and operating profit increased due to the revision of
selling prices.
1

○ In the Specialty Products segment, although sales volumes in the Specialty Products segment
remained steady, production costs increased due to rising raw material and fuel prices,
resulting in lower earnings on higher sales.
○ In the Cement segment, there were lower earnings on higher sales due to rising raw material
prices.
○ In the Life & Amenity segment, although shipments of photochromic dye materials for use ineyeglass lenses were robust, earnings from ion exchange membranes decreased year on year,
due to large-scale projects recorded in the corresponding period of the previous fiscal year.
Consequently, the segment reported lower earnings on higher sales.

4. Net sales and operating profit by business segment (forecasts)(1) Net sales and operating profit by business segment (full year comparison)(Unit: Billions of yen)

FY2019 Forecast
Operating
Net sales
profit

FY2018 Results
Operating
Net sales
profitChanges
Operating
Net sales
profitChemicals

103.0

18.5

98.3

16.8

+4.6

+1.6

Specialty Products

67.0

11.0

59.6

9.9

+7.3

+1.0

Cement

94.0

3.5

92.3

3.2

+1.6

+0.2

Life & Amenity

58.0

4.0

54.3

3.2

+3.6

+0.7

Others

64.0

4.5

62.3

4.3

+1.6

+0.1

Total

386.0

41.5

367.1

37.5

+18.8

+3.9

Inter-segment
eliminations andcorporate-wide expenses(43.0)(2.5)(42.5)

(2.3)

(0.4)

(0.1)

Consolidated results

343.0

39.0

324.6

35.2

+18.3

+3.7

(2) Assumptions of performance forecasts for fiscal 2018

Domestic Naphtha Price (¥/kl)
Exchange Rate (¥/$)

Fiscal 2019

Fiscal 2018

44,00049,500

110

111

The Tokuyama Group is forecasting increases in sales and operating income due to factors that
include increases in the sales volumes of its major products.
○ In the Chemicals segment, the Group has taken into account an increase in the sales volumesof its major products.
○ In the Specialty Products segment, the Group has taken into account an increase in the sales
volumes of semiconductor-related materials.
○ In the Cement segment, the Group has taken into account the revision of selling prices as wellas an increase in sales volume.
○ In the Life & Amenity segment, the Group has taken into account an increase in sales inoverseas markets.

2

Summary of Consolidated Financial Statements for Fiscal 2018 (JP GAAP)(The Fiscal Year ended March 31, 2019)
April 26, 2019
Tokuyama Corporation
Stock exchange listings:
Tokyo(URL http://www.tokuyama.co.jp/)
Code number:
4043
Representative:
Hiroshi Yokota
President and Representative Director
Contact:
Taro Kobayashi
General Manager, Corporate Communications & Investor Relations Dept.
+81-3-5207-2552
Scheduled date for the Ordinary General Meeting of Shareholders:June 21, 2019
Scheduled date of year-end dividends payout:
June 24, 2019
Scheduled date for the filing of the consolidated financial statements: June 24, 2019
Preparation of supplementary explanatory materials: Yes
Business results IR briefing to be held:
Yes (for institutional investors and analysts)

1. Consolidated results for fiscal year ended March 31, 2019 (April 1, 2018 – March 31, 2019)
Note: All amounts are rounded down to the nearest million yen.
% indicates year-on-year changes.

(1) Performance

Net sales
Fiscal 2018
Fiscal 2017

(millions of yen)324,661
308,061

Operating profit
[%]

5.4
3.0

(millions of yen)

35,262
41,268(Note) Comprehensive income: FY18: 31,321 million yen [14.2%]

Profit attributable toowners of parent

Ordinary profit[%](14.6)
7.1(millions of yen)

33,40036,196[%](millions of yen)

(7.7)
6.5

34,27919,698[%]74.0(62.2)

FY17: 27,436 million yen [(49.7)%]

Basic earnings per Diluted net income Net income to
Ordinary profit to Operating profit toshare
per shareshareholders’ equity
total assets
net sales(yen)

Fiscal 2018
Fiscal 2017493.26259.81

(yen)

[%]

[%]

24.6
15.6

－
－

[%]

9.0
9.2

(Reference) Equity in earnings of unconsolidated subsidiaries and affiliates: FY18: 921 million yen

10.9
13.4

FY17: 957 million yen* The Company consolidated its common shares at a ratio of one share for each five shares effective as of October 1, 2017. On this basis, basic
earnings per share data is calculated on the assumption that the consolidation of shares was conducted as of the beginning of the preceding fiscal
year.

(2) Financial position

Total assets
Mar 31, 2019
Mar 31, 2018

Net assets(millions of yen)(millions of yen)379,630
361,949

163,525
136,591

Shareholders’ equity
ratio
[%]

40.2
34.7

Net assets per share(yen)

2,199.83
1,806.56(Reference) Shareholders' equity:
FY18:
152,781 million yen
FY17:
125,656 million yen* The Company consolidated its common shares at a ratio of one share for each five shares effective as of October 1, 2017. On this basis, basic
earnings per share data is calculated on the assumption that the consolidation of shares was conducted as of the beginning of the preceding fiscal
year.

(3) Cash flows

Cash flows fromoperating activities
Fiscal 2018
Fiscal 2017

(millions of yen)

38,531
61,885

Cash flows frominvesting activities(millions of yen)

(16,174)(12,665)

1

Cash flows fromfinancing activities(millions of yen)

(21,104)(101,209)

Cash and cash
equivalents at the end of
the year(millions of yen)

67,99166,807

2. Dividends（Period）

Annual dividens
3rd
Yearquarter quarter
end

1st

2nd

quarter(yen)

Dividend
payout ratio

Total

Total dividends
paid(Total)(Consolidated)(millions of yen)

[%]

(yen)

(yen)

(yen)

(yen)

Dividend on net
assets ratio(Consolidated)[%]

Fiscal 2017

--

2.00

--

20.00

--

2,086

11.5

1.8

Fiscal 2018-- 25.00

--

25.00

50.00

3,477

10.1

2.5

-- 35.00

--

35.00

70.00

Fiscal 2019
（Forecast）(Note)

15.9* The Company consolidated its common shares at a ratio of one share for each five shares effective as of October 1, 2017. The amount ofdividend for the end of the second quarter of the fiscal year ending March 31, 2018 is presented as the amount of dividend prior to shareconsolidation. The forecast amount for the year-end dividend per share for the fiscal year ending March 31, 2018 is stated after taking into theaccount the impact of the share consolidation. The annual dividend amount is presented as “-.” Meanwhile, the interim dividend per share forthe fiscal year ending March 31, 2018 converted after the share consolidation and the annual dividend per share are ¥10.00 and ¥30.00,
respectively.
* Year-end dividend per share for the fiscal year ending March 31, 2018 of ¥20.00, includes ¥10.00 of a 100th anniversary commemorative
dividend.

3. Consolidated performance forecast for fiscal 2019 (April 1, 2019 – March 31, 2020)(% indicates the rate of change over the corresponding previous periods respectively)

Net sales

Fiscal 2019(millions of
yen)

[%]

343,000

5.7

Operating profit

Ordinary profit(millions ofyen)(millions of
yen)

[%]

39,000 10.6

Profit attributable to Basic earnings perowners of parent
share

[%]

(millions of
yen)

[%]

39,000 16.8

30,500(11.0)(yen)

438.88* Cautions pertaining to the appropriate use of performance forecasts and other particular items
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 etc. because of various factors that may arise from now on.

*Notes(1) Changes of significant subsidiaries in the scope of consolidation during this period : No
Addition to the scope of consolidation: Reduction from the scope of consolidation: (2) Changes of accounting policies, changes in accounting estimates, and retrospective restatements
i. Changes of accounting policies by revision of accounting standards : No
ii. Changes of accounting policies other than the above: Noiii. Changes in accounting estimates: No
iv. Retrospective restatements: No(3) Number of shares issued (in common stock)
Number of shares issued at end of period
i. (including treasury stock):ii. Number of treasury stock at end of period:iii. Average number of shares over period:

FY18:69,934,375

FY17:

69,934,375

FY18:
FY18:

482,765
69,495,230

FY17:
FY17:

378,378
69,560,391* The Company consolidated its common shares at a ratio of one share for each five shares effective as of October 1, 2017. On this basis, basic
earnings per share data is calculated on the assumption that the consolidation of shares was conducted as of the beginning of the preceding fiscal
year.

2

(Reference) Summary of Non-Consolidated Operating Results
1. Non-consolidated results for fiscal year ended March 31, 2019 (April 1, 2018 – March 31, 2019)
Note: All amounts are rounded down to the nearest million yen.
% indicates year-on-year changes.

(1) Performance

Net sales
Fiscal 2018
Fiscal 2017

Operating profit(millions of yen)[%]

195,233
188,501

3.6
8.9

Net profit per share(yen)

Fiscal 2018
Fiscal 2017

(millions of yen)

27,61433,359Ordinary profit[%](17.2)
3.5(Reference)

28,95529,262

[%]

(1.0)
(8.3)

(yen)

Shareholders’ equity
ratio

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

290,701
281,360

111,884
89,184

Shareholders' equity:(15.6)(0.4)(millions of yen)－－

(2) Financial position

Mar 31, 2019
Mar 31, 2018

25,00929,628Net profit[%]

Diluted net profit per
share

416.66397.30Total assets(millions of yen)

FY18:

[%]

38.5
31.7
111,884 million yen

FY17:

Net assets per share(yen)

1,610.98
1,282.20

89,184 million yen(Note) Notice on the implementation of audit proceduresThis Summary of Consolidated Financial Statements is not subject to audit procedures of the consolidated financial statements in linewith the Financial Instruments and Exchange Act. At the point of disclosure of this Summary of Consolidated Financial Statements, audit
procedures of the consolidated financial statements in line with the Financial Instruments and Exchange Act are underway.

3

Contents for Accompanying Materials
1. Management Policy(1) Basic Management Policy

……………

P. 2

(2) Medium- to Long-Term Management Strategies and Performance Targets

……………

P. 2

(3) Pending Issues

……………

P. 3

……………

P. 5

(1) Analysis of Operating Results

……………

P. 5

(2) Analysis of Financial Position

……………

P. 11

(3) Progress under the Medium-Term Management Plan

……………

P. 14

(4) Basic Policy for Profit Distribution and Dividends for Fiscal 2018 and 2019

……………

P. 14

3. Consolidated Financial Statements

……………

P. 15

(1) Consolidated Balance Sheets

……………

P. 15

(2) Consolidated Statements of Income

……………

P. 17

(3) Consolidated Statements of Comprehensive Income

……………

P. 18

(4) Consolidated Satetements of Cash Flows

……………

P. 19

(5) Segment Information

……………

P. 21

2. Analysis of Operating Results and Financial Position

11. Management Policy(1) Basic Management Policy
Tokuyama has put in place a renewed Group vision in a bid to further clarify its role and significance. As a
key component of this vision, the Tokuyama Group is determined to help realize a prosperous society bycreating value that enhances people’s lives centered on the field of chemistry. Drawing on the chemical
technologies that it has nurtured over many years, the Group will contribute to the well-being, growth, anddevelopment of society by continuously creating and proposing new value.

(2) Medium- to Long-Term Management Strategies and Performance Targets
Under the Medium-Term Management Plan formulated in May 2016, we have identified the following two
medium- to long-term management strategies, which we intend to carry out over the next decade throughto the fiscal year ending March 31, 2026.
1. Transition toward a robust business structure that is resilient against changes in the Company’s
operating environment and is capable of sustainable growth
The Tokuyama Group has set the goal of becoming a global leader in advanced materials through unique
technologies across growth businesses including the Specialty Products as well as Life & Amenity segment
together with the development of new products. In such traditional businesses as the Cement andChemicals segments, the Group will work to become a leader in Japan through strengthening
competitiveness.
2. Transition to a Group-wide low-cost structure by undertaking a comprehensive review of existing
work practices
The Tokuyama Group will reduce costs by adopting a cross-departmental approach that differs fromconventional methods and undertaking strategic capital expenditures as a part of efforts to cut backprincipal costs including raw material, fuel, repairs and maintenance, and logistics costs.
In addition, Tokuyama has identified specific numerical targets as a measure of its success in carrying out
these strategies. The goals are to achieve an ROA (operating profit/total assets), cash conversion cycle, anddebt-to-equity ratio of at least 10%, not more than 55 days, and not more than 1.0, respectively, as of theend of fiscal 2020, the fiscal year ending March 31, 2021.

2

(3) Pending Issues
As the current fiscal year is the middle year of the Medium-Term Management Plan, we have taken stockof the Plan based on the progress made and the management environment. With a view to realizing its
fiscal 2025 aspirations of becoming “a global leader in growth businesses” and “a leader in Japan in
traditional businesses,” the Company will formulate clear management strategies while accelerating efforts
to prioritize issues to change to a corporate structure capable of regrowth.
Contributing to sustainable development goals (SDGs) is also essential to enable the Group to aim forsustainable growth over the long term. Accurately identifying the environmental and social issues, theCompany would like to aim to realize both improvements in the corporate value of the entire Group and asustainable society.
1. Change the Group’s organizational culture and structure
Based on the recognition that changing the organizational climate is of the utmost importance in achieving
the Medium-Term Management Plan, the Company is reforming its personnel systems while focusing on
human resource development. Following on from the revision of the personnel evaluation system for
managers and employees over the age of 60, we will revise the general personnel systems for union
members and aim for the introduction of the new system in fiscal 2020. The Company expects that thetraining of human resources and in-house revitalization will be brought about by the appointment of
talented employees at an early stage.
By holding roundtable discussions between the president and some employees and through direct dialog
with top management, the Company will instill its management philosophy while promoting changes in its
organizational culture and structure.
2. Rebuild the Group’s business strategies
To strengthen its presence in ICT-related fields, which are its growth businesses, the Company decided toincrease production plant for photoresist developer and high-purity aluminum nitride powder. By further
expanding the supply system, the Company will aim for more stable supply and promote the developmentof a wide range of applications.
The Company also established a research laboratory in Taiwan as a new overseas base to expand andimprove the competitiveness of its semiconductor-related products business. As a result of miniaturized
and highly integrate semiconductors, this laboratory will operate as an information gathering andmarketing base for new product creation in order to respond to the demand for high purification ofchemical and materials received from semiconductor manufacturers. this laboratory will also play a role as adevelopment base that will conduct joint development with semiconductor manufacturers and research
institutes.
The Company recognizes that creating new businesses based on its technological prowess will remain an
important issue in the years to come. For that reason, the Company will not only utilize internal resources
but also, for example, move ahead with business expansion through open innovation and M&A, whilepursuing a variety of possibilities.
3. Strengthen Group management
Having acquired all its shares, the Company made Tokuyama Kairiku Unso K.K. , which handles general3

logistics, a wholly owned subsidiary. Through this move, the company will cooperate with an existingGroup company, Tokuyama Logistics Co., Ltd., to expand the logistics network, and it is expected that thestable supply of products to customers across the Group will be realized.
4. Improve the Company’s financial position
Having made progress in reducing its interest-bearing debt, the Company achieved a D/E ratio of 1.0
times or less, one of the goals of the Medium-Term Management Plan, two years ahead of schedule.
Subordinated loan refinancing was conducted with the objective of enhancing the flexibility of theCompany’s financial strategy by further diversifying refinancing methods and reducing financial expenses.
To achieve its financial targets, the Company will promote management efficiency and the reduction of its
interest-bearing debt, while continue its efforts to build a sound financial position.
5. Initiatives toward SDGs
To realize a sustainable society, we extracted the social issues relevant to the Tokuyama Group andidentified them as materiality (important issues to be addressed). Addressing these important issues islinked to the Company’s mission of “Centered on the field of chemistry, the Tokuyama Group willcontinueto create value that enhances people’s lives.”
Based on this mission, the Company will contribute to the improvement of society and the Group’s value
and to sustainable development by resolving materiality.

42. Analysis of Operating Results and Financial Position(1) Analysis of Operating Results<1> Operating results for the fiscal year under review[1] Overview of performance for the fiscal year under review
In fiscal 2018 (April 1, 2018 to March 31, 2019), the Japanese economy initially recorded high growth, mainly
due to increases in personal consumption and capital investment. From summer onwards, however,consumption decreased against a backdrop of delays in production and logistics due to the effects of a seriesof natural disasters and a decrease in customers. In addition, IT-related exports stagnated due to the sense of alull in demand for smartphones and data centers, which had previously been expected to remain robust, andthe onset of bearish stock market conditions due to the recovery in the Chinese economy being seen as
having stalled.
Under these circumstances, the Tokuyama Group continued to implement the priority measures identified in
its Medium-Term Management Plan.
As a result, sales increased due to efforts to increase sales volumes and revise sales prices, but operating profit
decreased due to increases in raw material and fuel costs brought about by rising prices for coal and domestic
naphtha.
(Unit: Millions of yen)
Net sales

Operating profit

Ordinary profit

Profit attributable toowners of parerent

Fiscal 2018324,661

35,26233,40034,279Fiscal 2017308,061

41,26836,196

19,6985.4(14.6)

(7.7)

74.0

Rate of change (%)

Net sales
Consolidated net sales increased 5.4%, or ¥16,599 million compared with the previous fiscal year, to¥324,661 million. This was largely attributable to an increased sales volume in products such as
semiconductor-related products and revision in selling prices of products such as caustic soda.
Cost of sales
Cost of sales increased 9.1%, or ¥18,949 million compared the previous fiscal year, to ¥226,664 million.
This was due mainly to an upturn in raw material and fuel costs as a result of the increase in coal prices anddomestic naphtha.
SG&A expenses
SG&A expenses increased 6.2%, or ¥3,655 million compared with the previous fiscal year, to ¥62,733
million. This was largely attributable to the increase in logistics costs.

Operating profit
Operating profit decreased 14.6%, or ¥6,005 million compared with the previous fiscal year, to ¥35,262

5million. Despite sales in each business remained steady, the increase in manufacturing costs including therise in raw material and fuel costs affected the operating profit of each segment.
Non-operating income/expenses, Ordinary profit
Non-operating income/expenses improved ¥3,209 million compared with the previous fiscal year.
As a result of the above, ordinary profit decreased 7.7%, or ¥2,795 million compared with the previous
fiscal year, to ¥33,400 million.
Extraordinary income/losses, Profit before income taxes, Profit, Profit attributable to owners ofparentExtraordinary income/losses improved by ¥7,917 million compared with the previous fiscal year.
As a result of the above, profit before income taxes increased 15.6%, or ¥5,122 million compared with theprevious fiscal year, to ¥38,017 million.
Profit after deducting income taxes calculated in an appropriate way increased 38.0%, or ¥9,648 million
compared with the previous fiscal year, to ¥35,029 million.
Profit attributable to owners of parent increased 74.0%, or ¥14,580 million compared with the previous
fiscal year, to ¥34,279million.

6[2] Operating performance by business segment(Operating results by segment)
Sales(Unit: Millions of yen)
Reportable segment
Others

Total

Adjustment

Figures in
consolidated
incomestatement

54,38062,377367,172(42,511)324,661

87,34551,57954,526345,676(37,615)

308,061

5.7

5.4

14.4

6.2

-

5.4

Chemicals

Specialty
Products

CementFiscal 2018

98,38059,66892,366

Fiscal 2017

93,54658,6785.2

1.7

Rate of change (%)

Life &
Amenity

Operating profit(Unit: Millions of yen)
Reportable segment

37,564(2,301)35,262

6,214

41,691(422)

41,268(30.2)(9.9)-(14.6)

Others

Total

3,238

4,335

4,568

3,728

(29.9)(13.1)

Chemicals

Specialty
Products

Fiscal 201816,850

9,934

3,204

Fiscal 201716,175

11,003

4.2(9.7)

Rate of change (%)

Adjustment

Figures in
consolidated
incomestatementLife &
Amenity

Cement(Note) Sales and operating profit in each segment include inter-segment transactions.

ChemicalsWith regard to caustic soda, the revision of selling prices was progressed. As a result, its operating profit
increased greatly.
Sales volume of vinyl chloride resin was steady. Meanwhile, manufacturing costs increased due to a rise in
raw material prices such as domestic naphtha. As a result, its operating profit decreased
Calcium chloride sales volume decreased and operating profit was down due to the effects of a warm
winter.
As a result of the above, segment net sales increased 5.2% compared with the previous fiscal year, to¥98,380 million and operating profit increased 4.2% to ¥16,850 million. The segment reported higher
earnings on higher sales.

7Specialty Products
Sales volume of semiconductor-grade polycrystalline silicon was steady. Meanwhile, manufacturing costs
increased due to a upturn in fuel and raw material costs. As a result, its operating profit decreased.
With regard to high-purity chemicals for electronics manufacturing, sales volume was steady. Meanwhile,
manufacturing costs increased due to a rise in raw material prices such as domestic naphtha. As a result, its
operating profit decreased.
With regard to thermal management material, sales volume in such applications used for semiconductor
manufacturing equipment increased and the business did well.
As a result of the above, segment net sales increased 1.7% compared with the previous fiscal year, to¥59,668 million and operating profit decreased 9.7% to ¥9,934 million. The segment reported lower
earnings on higher sales.
CementWith regard to cement, domestic sales volume was weak and manufacturing costs increased due to a rise in
raw material prices such as coal. As a result, its operating profit decreased.
In the resource recycling business, its business result was almost same as the previous fiscal year.
Consolidated subsidiary net sales increased. This mainly reflected the robust shipping trends of
cement-related products.
As a result of the above, segment net sales increased 5.7% compared with the previous fiscal year, to¥92,366 million and operating profit decreased 29.9% to ¥3,204 million. The segment reported lower
earnings on higher sales.
Life & Amenity
With regard to plastic lens-related materials, sales volume of photochromic dye materials for eyeglass lenses
increased.
With regard to ion exchange membranes, despite sales volume was steady, its operating profit decreased
due to large-scale project recorded in the previous fiscal year.
With regard to active pharmaceutical ingredients and intermediates as well as dental materials, the sales
volume of each increased, and business performance was robust.
As a result of the above, segment net sales increased 5.4% compared with the previous fiscal year, to¥54,380 million and operating profit decreased 13.1% to ¥3,238 million. The segment reported lower
earnings on higher sales.

8<2> Outlook for fiscal 2019[1] Outlook for operating forcasts for fiscal 2019
With regard to the global economy, the economic slowdown is expected to end in a short period of time,
due to a shift away from the tight fiscal policies of the central banks in each country and region and China’s
latest consumption stimulus measures. However, the U.S.-China trade dispute and other factors are a cause
for concern and thus uncertainties remain. Although partial weaknesses remain, the Japanese economy iscurrently expected to continue its moderate recovery as a raft of government policies takes effect amid
ongoing improvements in the employment and income environments.
Under these circumstances, the Tokuyama Group will continue to transition to a robust business structurethat is unaffected by changes in market conditions and movements in supply and demand, and is capableof sustainable growth. In the traditional businesses as Cement and Chemicals, we will endeavor tostrengthen our competitiveness by thoroughly reducing costs and increasing efficiency. In such growthbusinesses as Specialty Products, Life & Amenity, and Newly Developed Products, we will make every
effort to bolster our product and development prowess by enhancing functions as well as quality in a bid tonurture the necessary driving force to proper new growth.
Based on the current information, we forecast net sales of ¥343.0 billion, an increase of 5.7% (¥18.3
billion) compared with the fiscal year under review, operating profit of ¥39.0 billion, an increase of 10.6%(¥3.7 billion), ordinary profit of ¥39.0 billion, an increase of 16.8% (¥5.5 billion) and profit attributable toowners of parerent of ¥30.5 billion, down 11.0% (¥3.7 billion).
(Unit: Millions of yen)
Net sales

Operating profit

Ordinary profit

Profit attributable toowners of parerent

Fiscal 2019

343,000

39,00039,00030,500Fiscal 2018324,661

35,26233,40034,279

5.7

10.6

16.8

(11.0)

Rate of change (%)

These forecasts are calculated based on an exchange rate of ¥110/$ and a domestic naphtha price of¥44,000/kl.
[2] Outlook for segment forcasts for fiscal 2019
Chemicals
Against a backdrop of burgeoning demand in the Asia region, sales volumes are expected to remain robust
and focus primarily on caustic soda and vinyl chloride resin. Under such circumstances, the Company will
promote the strengthening of its cost competitiveness by, for example, expanding sales of its major
products and reducing unit consumption and fixed costs, while working to secure stable earnings.

9

Specialty Products
Although temporarily stagnant due to the economic slowdown in China and other factors, thesemiconductor market is expected to grow over the long term. Due to the advances being made inminiaturization in accordance with the introduction of IoT and 5G, there will also be increasing demands
from customers for higher quality and stable supply. Under such circumstances, in the case of
semiconductor-grade polycrystalline silicon, the Company will pursue higher quality and aim to expand
earnings by increasing sales of high-value-added products differentiated from those of other companies. In
high-purity chemicals for electronics manufacturing, the Company is making progress in increasing its
production capacity in Japan, Taiwan and China, while establishing a supply system that meets demand in
Asia. In addition to increasing its production capacity in heat-dissipating materials, the Company is focusing
on development to expand its product lineup.
CementDomestic private sector demand remained buoyant due to redevelopment construction work in the Tokyo
area and other factors, and a certain amount of increase is expected in public works demand due to thepromotion of the National Resilience project . Thus, a slight increase in overall demand is forecast. Under
these circumstances, every effort will be made to secure earnings by transferring the increase in raw
material costs to selling prices, expanding the volumes of exports and waste accepted, and thoroughly
reducing manufacturing costs.
Life & Amenity
The Tokuyama Group believes that the market in Japan will continue along a modest recovery trajectory.
In contrast, the Group holds concerns over the economic conditions of overseas markets on a forseenable
future. This is especially true for China as well as emerging countries where there are fears of a slowdown
in the rates of economic growth. Under such circumstances, the Company will focus on new productdevelopment and sales activities in response to customer needs for healthcare-related products and changes
in the market.
OthersThe “Others” segment includes businesses which are responsible for the Group’s sales, logistics, utilities
and other functions. The segment will work to increase Group-wide earnings by continuing to reduce
costs.

10

(2) Analysis of Financial Position<1> Analysis of assets, liabilities and net assets
Summery of Consolidated Balance Sheets(Unit: Millions of yen)

Mar 31, 2018

Mar 31, 2019

Ammount ofRate of changechange(%)

Assets361,949

379,630

17,680

4.9

Liabilities

225,357

216,104(9,252)(4.1)（Interest-bearing debt）

139,917

128,966(10,951)(7.8)

Net assets

136,591

163,525

26,933

19.7（Shareholders' equity）

125,656

152,781

27,124

21.6

Mar 31, 2018

Mar 31, 2019

Ammount of

Financial indicatorschangeD/E ratio

1.11

0.84

(0.27)Net D/E ratio

0.58

0.40

(0.18)

Shareholders’ equity ratio (%)

34.7

40.2

5.5 points

Shareholders’ equity ratio based on market price (%)

65.1

47.8

(17.3) points(Note)*D/E ratio: interest-bearing debt / shareholders' equity
Net D/E ratio: ( interest-bearing debt - Cash and cash equivalents) / shareholders' equity
Shareholders’ equity ratio (%): interest-bearing debt / total assets
Shareholders’ equity ratio based on market price (%) : market capitalization / total assets(Assets)
Property, plant and equipment increased ¥5,862 million due to the inclusion of a new subsidiary in the
Company’s scope of consolidation, current assets, other increased ¥5,744 million due to the claim fordamages regarding the construction of a plant of Tokuyama Malaysia Sdn. Bhd., and deferred tax assets
increased ¥2,791 million due to adoption of the Consolidated taxation system.
As a result, total assets amounted to ¥379,630 million, an increase of ¥17,680 million compared withthose as of March 31, 2018.
(Liabilities)
Short-term loans payable increased ¥1,812 million due to the inclusion of a new subsidiary in the
Company’s scope of consolidation, while long-term loans payable and the current portion of long-termloans payable decreased ¥13,127 million due to scheduled repayments .
As a result, total liabilities amounted to ¥216,104 million, down ¥9,252 million compared with those as ofMarch 31, 2018.
(Net assets)
Despite the decrease of valuation difference on available-for-sale securities of ¥2,918 million, this mainlyreflected an increase in retained earnings of ¥31,149 million as a result of posting profit attributable toowners of parent.
As a result, net assets totaled ¥163,525 million, an increase of ¥26,933 million compared with those as ofMarch 31, 2018.
11

(Financial indicators)
Under its Medium-Term Management Plan, the Company includes a D/E ratio of 1.0 or less as amanagement numerical target for fiscal 2020. With regard to the consolidated fiscal year under review, theD/E ratio improved 0.27 compared with the previous fiscal year to 0.84 times, due to a ¥10,951 million
decrease in interest-bearing debt and a ¥27,124 increase in shareholders’ equity.
The Company has achieved the management numerical target cited in its Medium-Term Management Plan,
but will work to improve the D/E ratio on an ongoing basis from the current fiscal year onward.

<2> Analysis of cash flows
Summery of Consolidated Statements of Cash Flows(Unit: Millions of yen)
Fiscal 2017

Fiscal 2018

Cash flows from operating activities

61,88538,531

Cash flows from investing activities(12,665)(16,174)

Cash flows from financing activities(101,209)(21,104)

(23)

(49)

Net increase (decrease) in cash and cash equivalents(52,012)

1,202

Cash and cash equivalents at end of year

66,807

67,991

Effect of exchange rate changes on cash and cash equivalents(Cash flows from operating activities)
Net cash provided by operating activities totaled ¥38,531 million, down ¥23,353 million compared withthe previous fiscal year. Principal items included profit before income tax of ¥38,017 million.
(Cash flows from investing activities)
Net cash used in investing activities totaled ¥16,174 million, an increase of ¥3,509 million compared withthe previous fiscal year.
Major contributory factors were payments for purchases of property, plant and equipment of ¥16,765
million.
(Cash flows from financing activities)
Net cash used in financing activities amounted to ¥21,104 million, a decrease of ¥80,104 million
compared with the previous fiscal year.
This was primarily attributed to inflow due to long-term loans from the procurement of funds through a
new subordinated loan and the early repayment of an existing subordinated loan of ¥59,713 million, andoutflow due to repayments of long-term loans of ¥76,512 million.
<3> Procurement of Funds and Liquidity(Procurement of Funds)
The Tokuyama Group has identified efforts to improve its financial structure as one component of thefinancial policy outlined under its Medium-Term Management Plan. Against this backdrop, the Group is
working to build up its shareholders’ equity while reducing its interest-bearing debt. Turning to other policy
12

targets, the Group is endeavoring to acquire a “single A” rating from relevant agencies by the end of theMedium-Term Management Plan. Under this policy, the Group worked to steadily improve its financial
position, as evidenced by having achieved a D/E ratio of 1.0 or less, which is cited as a management
numerical target, in the consolidated fiscal year under review.
Meanwhile, the Tokuyama Group recognizes the need to retain a certain level of funds in order to secure
the working capital required to finance its business activities, expand its growth businesses, undertake
capital expenditures geared toward strengthening the competitiveness of traditional business, and promotestrategic investments. While the principal method of procuring these funds is to accumulate cash on handthrough the continuous posting of business earnings, the Group will also pursue other avenues. This
includes borrowing from financial institutions and issuing unsecured bonds. In addition, energies are being
directed toward building a financial structure that is capable of engaging in business activities with lessworking capital. To this end, the Group is working to improve its cash conversion cycle (CCC), reduceinventories, and improve trading terms and conditions with business partners, issues raised under the
Medium-Term Management Plan. Furthermore, the Tokuyama Group’s intended investment amount for
the next fiscal year is ¥28.6 billion. Plans are in place to utilize cash on hand and borrowings from financial
institutions.
(Liquidity)
Cash and cash equivalents stood at ¥67,991 million as of the end of the fiscal year under review. On thisbasis, the Tokuyama Group is confident that it maintains more than ample liquidity to promote its businessactivities. In addition, Tokuyama has executed revolving credit facility, overdraft, and credit liquidationagreements with a financial institution. Accounting for these factors, the Company is more than capable ofmaintain a certain level of liquidity should any impediment arise.

13

(3) Progress under the Medium-Term Management Plan
Compared with the previous fiscal year ROA deteriorated by 0.99 of a percentage point to 9.5% due to thedecrease in operating profit brought about by increased manufacturing costs, including the prices of raw
materials, the inclusion of a subsidiary in the Company’s scope of consolidation, the recording of a claim
for damages under current assets, other, and increased total assets due to an increase in deferred tax assets.
Despite an increase in inventories, cash conversion cycle (CCC) improved by two days compared with theprevious fiscal year to 60 days, due to changes in the transaction conditions of partially purchased items.
The D/E ratio was 0.84 times, an improvement of 0.27 compared with the previous fiscal year, due to theaccumulation of profit, the reduction of interest-bearing debt and other factors, and thus the Company
was able to achieve the Medium-Term Management Plan target value of 1.0 times or less ahead of time.

(4) Basic Policy for Profit Distribution and Dividends for Fiscal 2018 and 2019
As far as the distribution of profits is concerned, Tokuyama’s basic policy is the ensure the continuous andstable payment of dividends to its shareholders. In carrying out this policy, the Company takes into
consideration performance trends and the roadmap established under its Medium-Term Management Plan.
Meanwhile, the Company will apply internal reserves to investment and lending as well as capital
expenditures with the aim of further enhancing its corporate value.
In fiscal 2018, the Company expects to pay out a year-end dividend of ¥25 per share in line with the basic
policy mentioned above.
Turning to dividends for fiscal 2019, the Company intends to undertake the payment of an interim andyear-end dividend of ¥35 per share respectively.

14

3. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of yen)
3/31/2019

3/31/2018
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Lease receivables
Securities
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 doubtful accounts
Total investments and other assets
Total non-current assets
Total assets
Total assets

15

57,22979,66028
10,00014,028
10,075
15,3274,809△127
191,031

68,61380,35830－
16,4589,554
17,462
10,554△94
202,936

102,761△73,455
29,305446,278△404,441
41,836
21,887△19,7482,138
30,9953,760△1,753
2,007
3,959
110,242

106,214△76,233
29,981
459,535△414,813
44,721
22,106△19,905
2,201
32,296
4,548△2,2372,311
4,592
116,104

1,158
51
1,556
2,766

208
71
1,693
1,973

24,302
2,627
18,300
9,657
3,162
△141
57,908
170,917361,949
424,433

21,7182,444
21,091
9,796
3,621
△57
58,614
176,693379,630
361,949

3/31/2018
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Income taxes payable
Provision for bonuses
Provision for repairs
Provision for product warranties
Provision for loss on compensation for damage
Provision for restructuring
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities
Provision for retirement benefits for directors (and other officers)
Provision for share benefits
Provision for repairs
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
Capital stock
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

16(Millions of yen)
3/31/201947,6102,549
15,684
641
3,688
2,557
4,332
98
－
－
15,87093,03247,268
4,361
12,667
758
3,816
2,664
3,569
137
91
233
17,68093,248

119,521
1,521
298
143
－
1,594
261
253
1,527
5
7,197
132,325
225,357

109,411
1,767
220
224
48
1,546
260
222
2,149
6
6,999
122,856
216,104

10,00020,00890,752△1,472
119,288

10,00020,018
121,901△1,823150,095

1,352
△151
2,093
3,074
6,368
10,935
136,591
361,949△1,566
△61
1,672
2,640
2,685
10,743
163,525
379,630

(2) 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
Fiduciary obligation fee
Trial products income
Rent income on non-current assets
Other
Total non-operating income
Non-operating expenses
Interest expenses
Cost of loans payable
Loss on bond retirement
Fiduciary obligation expenses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on bargain purchase
Gain on sales of investment securities
Compensation for damage income
Compensation income for damage
Subsidy income
Gain on insurance adjustment
Other
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Impairment loss
Loss on disaster
Loss on reduction of non-current assets
Loss on disposal of non-current assets
Loss on sales of investment securities
Compensation for damage
Loss on sale of businesses
Loss on contract cancellation
Other
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent
17

FY2017
308,061
207,715
100,346(Millions of yen)
FY2018324,661
226,664
97,99639,26819,80959,07741,26841,524
21,20862,73335,262

210
272
957
878
540
450
1,335
4,645

123
390
921
716
666
649
1,333
4,802

3,714
1,604
856
3,541
9,717
36,196

2,453
884
685
2,640
6,664
33,400

528
6
7,705
144
145
－
8,529

47
964
1
6,006
133
169
27
7,351

5
1,098
4
110
715
6
8,059
1,431
398
11,83032,895
4,777
2,736
7,514
25,381
5,682
19,698

10
363
30
100
807
851
569
2,733
38,017
5,074△2,085
2,988
35,029750
34,279(3) 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
methodTotal other comprehensive income
Comprehensive income
Comprehensive income attributable to
Owners of the Parent
Non-controlling interests

18

FY201725,381(Millions of yen)
FY201835,029

1,039
178
425
241
170
2,055
27,436△2,919
90
△304
△434
△139
△3,70731,321

21,6605,775

30,596725

(4) Consolidated Statements of Cash FlowsFY2017
Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in provision
Increase (decrease) in retirement benefit liability
Decrease (increase) in retirement benefit asset
Interest and dividend income
Foreign exchange losses (gains)
Loss (gain) on sales of property, plant and equipment
Loss (gain) on sales of investment securities
Share of loss (profit) of entities accounted for using equity method
Gain on bargain purchase
Subsidy income
Interest expenses
Cost of loans payable
Loss on reduction of non-current assets
Impairment loss
Loss (gain) on disposal of non-current assets
Gain on insurance claim
Loss on transfer of business
Compensation for damage incomecompensation income for damage
Compensation for damage
Loss on contract cancellation
Loss on redemption of bonds
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Decrease (increase) in other current assets
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in other current liabilities
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Proceeds from insurance income
Proceeds from conpensation income
Payments for contract cancellation
Income taxes (paid) refund
Net cash provided by (used in) operating activities
Income taxes (paid) refund
Net cash provided by (used in) operating activities

19

32,895
13,985
1,433
95
△485
△483
△56
△522
△0
△957
－
△144
3,714
－
110
1,098
715
△145
8,059
－
△7,705
－
1,431
1,604
△5,857△6,463△414
11,344
1,673
972
55,899805△3,775
145
7,705
△959
2,064
61,885△18,065
20,012(Millions of yen)
FY201838,017
15,093
△693
58
△761
△514
8
△36
△1
△921
△964
△133
2,453
884
100
363
807
△169
－
△6,006
－
851
－
－
928
△4,071335△1,090△403
943
45,077938△2,529169－－△5,12338,531
2,064
61,885

(Millions of yen)
FY2018FY2017
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of investment securities
Proceeds from sales of investment securities
Proceeds from purchase of shares of subsidiaries resulting in change inProceeds from sales of shares of subsidiaries resulting in change in scope
Payments of long-term loans receivableCollection of long-term loans receivable
Proceeds from subsidy income
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Redemption of bonds
Proceeds from issuance of common shares
Cash dividends paid
Dividends paid to non-controlling interests
Decrease (increase) in treasury shares
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Decrease in cash and cash equivalents resulting from exclusion ofsubsidiaries from consolidation

20

△288
161
△15,526
1,618△3,359
76
－
5,362
△7
234
144
△1,081△12,665△269
498△16,765
219
△22
3
583
－
△3
214
133
△765
△16,1742
10,120△50,384△36,01478△1,454△406△21,650△1,500△101,209△23△52,012
118,819247
59,713△76,512－－△3,122
△357
△308
△764
△21,104△49
1,202
66,807－△18

(5) Segment information
1. Summary of reportable segments
The reportable segments of the Tokuyama Group are defined as individual units, where separate financial
information is available and which are subject to regular review by the Board of Directors of the Company
to evaluate their results and decide the allocation of management resources.
The Company has business divisions by product group, and the Tokuyama Group conducts business
operations through each business division devising its comprehensive product strategy for domestic andoverseas markets.
The Tokuyama Group is, therefore, composed of segments by product group based on business divisions,and has four reportable segments, “Chemicals,” “Specialty Products,” “Cement,” and “Life & Amenity.”
Main products and services of each reportable segment are as follows:

Reportable segment

Main products and services

Chemicals

Caustic soda, soda ash, calcium chloride, sodium silicate, vinyl chloride monomer,
polyvinyl chloride resin, propylene oxide, isopropyl alcohol and chlorinatedsolvents

Specialty Products

Polycrystalline silicon, fumed silica, tetrachlorosilane, aluminum nitride, high-purity
chemicals for electronics manufacturing, and photoresist developer

CementCement, ready-mixed concrete, cement-type stabilizer, and resourece recycling
business

Life & Amenity

Polyolefin film, plastic window sashes, medical diagnosis systems, dental materials
and equipment, ion exchange membranes, pharmaceutical ingredients andintermediates, plastic lens-related materials for glasses, and microporous film21

2. Information on sales, income, assets and other items by reportable segment
Fiscal 2017 (April 1, 2017 – March 31, 2018)(Millions of yen)
Reportable segments

Sales
Sales to customers
Inter-segment sales/transfer
Total
Segment profit
Segment assets
Other items
Depreciation expenses*4
Increase in tangible and intangible
fixed assets*5

Chemicals

Specialty
Products

92,512
1,034
93,546
16,17553,98147,64011,03858,67811,00352,47187,058286
87,345
4,568
53,835

2,244
2,753

2,445
3,386

3,195
3,059

CementAdjustment*2

Figures in
consolidated
financialstatements*3

308,061
37,615
345,676
41,691
264,728(37,615)(37,615)(422)
97,221

308,061
308,061
41,268361,949

13,131
15,871854
424

13,985
16,295

Others*1

Total

49,586
1,993
51,5793,728
57,57731,26323,26254,526
6,214
46,862

2,086
4,857

3,159
1,813

Life &
Amenity*1 “Others” segment comprises businesses other than those of the reportable segments. Concretely, the segment includes
overseas sales companies, a distribution company, a real estate business, etc.
*2 Adjustment is as follows:(1) The segment profit adjustment amount consists mainly of basic R&D expenses that are not related to specificreportable segments.
(2) Included in the segment assets adjustment amount are corporate assets that are not allocated to specific reportablesegments (¥124,248 million).
*3 With regard to segment profit, operating income in the consolidated financial statements has been calculated byadjusting the sum total of the reportable segments’ income and the “Others” segment’s profit.
*4 Included in depreciation expenses is the long-term prepaid expense depreciation amount.
*5 Included in increase in tangible and intangible fixed assets is the long-term prepaid expense increase amount.
Fiscal 2018 (April 1, 2018 – March 31, 2019)(Millions of yen)
Reportable segments

Sales
Sales to customers
Inter-segment sales/transfer
Total
Segment profit
Segment assets
Other items
Depreciation expenses*4
Increase in tangible and intangible
fixed assets*5

Chemicals

Specialty
Products

97,471
908
98,38016,85053,99547,193
12,474
59,668
9,934
62,91691,491874
92,366
3,204
55,427

2,582
3,375

2,533
5,404

3,359
3,507

CementAdjustment*2

Figures in
consolidated
financialstatements*3

324,661
42,511
367,172
37,564
282,872(42,511)(42,511)(2,301)96,757

324,661
324,661
35,262379,630

14,31517,098777
1,970

15,09319,069Others*1

Total

52,3382,041
54,3803,238
58,352

36,165
26,21162,377
4,335
52,180

2,370
2,053

3,470
2,757

Life &
Amenity*1 “Others” segment comprises businesses other than those of the reportable segments. Concretely, the segment includes
overseas sales companies, a distribution company, a real estate business, etc.
*2 Adjustment is as follows:(1) The segment profit adjustment amount consists mainly of basic R&D expenses that are not related to specificreportable segments.
(2) Included in the segment assets adjustment amount are corporate assets that are not allocated to specific reportablesegments (¥123,133 million).
*3 With regard to segment profit, operating profit in the consolidated financial statements has been calculated by adjusting
the sum total of the reportable segments’ profit and the “Others” segment’s profit.
*4 Included in depreciation expenses is the long-term prepaid expense depreciation amount.
*5 Included in increase in tangible and intangible fixed assets is the long-term prepaid expense increase amount.

22