Summary of Consolidated Financial Statements for the Third Quarter Fiscal 2019 (JPGAAP)
January 31, 2020
Tokuyama Corporation
Stock exchange listings:
Tokyo(URL https://www.tokuyama.co.jp/eng/)
Local Code :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 filing of the quarterly consolidated financial statements: February 12, 2020
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, 2019 (Apr. 1, 2019 – Dec. 31, 2019)(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)
[%]

Third Quarter Fiscal 2019236,543(0.7)
24,754
Third Quarter Fiscal 2018
238,289
5.4
25,454(Note) Comprehensive income: 3rd Q FY19: 18,426 million yen [10.7 %]3rd Q FY18: 16,648 million yen [7.7 %](2.8)(15.6)

Profit attributable toowners of parent
Year-on-year(millions of yen)change [%]Third Quarter Fiscal 2019
Third Quarter Fiscal 2018

18,011
19,570Ordinary profit
Year-on(millions ofyear change
yen)
[%]

23,78023,674(0.4)(10.6)

Basic earnings per
share

Diluted earnings
per share

(yen)

(yen)

259.32281.56-

Shareholders’Equity ratio(%)

Net assets per
share
(yen)

(8.0)
166.5

(2) Consolidated financial position

Dec 31, 2019
Mar 31, 2019

Total assets

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

380,908
177,643
379,630
163,525
Dec 31, 2019: 166,378 million yen(Reference) Shareholders' equity:

43.7
2395.4540.2
2,199.83
Mar 31, 2019: 152,781 million yen

2. Dividends（Period）

1st quarter(yen)

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

Fiscal 2018, ended
25.00
Mar 31, 2019
Fiscal 2019, ending
35.00
Mar 31, 2020
Fiscal 2019
（Forecast）(Note) Revision of the latest dividends forecast: No

(yen)

-

Total

(yen)

(yen)

25.00

50.00

35.00

70.00

-

3. Consolidated performance forecast for fiscal 2018 (Apr. 1, 2019 – Mar. 31, 2020)(% indicates the rate of change over the corresponding previous periods respectively)
attributable to Basic earnings
Net sales
Operating profit Ordinary profit Profit
owners of parent
per share(millions of
yen)

[%]

(millions of
yen)

[%]

(millions of
yen)

[%]

Fiscal 2019
322,000 (0.8)
35,000 (0.7)
34,000 1.8(Note) Revision of the latest consolidated performance forecast: No

1(millions ofyen)

26,000[%](24.2)(yen)

374.35

*Notes(1) Changes in significant subsidiaries during this period (Apr. 1, 2019 – Dec. 31, 2019): 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 (4) Notes on
Quarterly Consolidated Financial Statements (Change of accounting process specific to preparing quarterly
consolidated financial statement)” on page 11 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 of accounting policies by revision of accounting standards:
ii. Changes of accounting policies other than the above:iii. Changes in accounting estimates:
iv. Retrospective restatements:

No
No
No
No

(4) Number of shares issued (in common stock)i.

Number of shares issued at end of period(including treasury stock):ii. Number of treasury stock at end of period:iii. Average number of shares over period:

Third Quarter
Fiscal 2019:
Third Quarter
Fiscal 2019:
Third Quarter
Fiscal 2019:69,934,375
478,293
69,455,177

Fiscal 2018: 69,934,375
Fiscal 2018:

482,765

Third Quarter
69,509,684
Fiscal 2018:(Note) Notice on the implementation of quarterly review proceduresThis summary of quarterly consolidated financial statements is not subject to quarterly review procedures in linewith the Financial Instruments and Exchange Act.

(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
the basis of information available at this point and certain assumptions which are judged to be rational, and may
be substantially different from the actual performance because of various factors that may arise from now on.

(Note) About the supplementary materials of quarterly consolidated financial statements
The supplementary materials was uploaded on our website on the same day, January 31, 2020:2

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. 6…………………

P. 6

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

P. 7(1) Quarterly Consolidated Balance Sheets…………………

P. 7(2) Quarterly Consolidated Statements of Income…………………

P. 9(3) Quarterly Consolidated Statements of Comprehensive Income…………………

P. 10(4) Notes on Quarterly Consolidated Financial Statements…………………

P. 11(5) Segment Information…………………

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 2019 (accumulated figures, April 1, 2019 December 31, 2019) are summarized as follows:(Unit: Millions of yen)
Net sales

Operating profit

Ordinary profit

Profit attributableto owners ofparentThird Quarter Fiscal 2019236,543

24,75423,78018,011

Third Quarter Fiscal 2018

238,289

25,454

23,674

19,570

(0.7)

(2.8)

0.4

(8.0)

Rate of change (%)

Net sales
Consolidated net sales decreased 0.7%, or ¥1,745 million compared with the corresponding
period of the previous year, to ¥236,543 million. This was largely attributable to weak sales ofmajor products.
Cost of sales
Cost of sales decreased 1.5%, or ¥2,458 million compared with the corresponding period of theprevious year, to ¥163,756 million. This decrease largely reflected the downswing in raw material
and fuel costs as a result of the decrease in domestic naphtha and coal prices.
SG&A expenses
SG&A expenses increased 3.0%, or ¥1,413 million compared with the corresponding period of
the previous year, to ¥48,032 million. In addition to the increase in advertising expenses
associated with the release of new products to the market, this increase largely reflected R&D
expenses of thermal management material.
Operating profit
Operating profit decreased 2.8%, or ¥700 million compared with the corresponding period of
the previous year, to ¥24,754 million. This was largely attributable to a weak sales volume inmajor products.

2

Non-operating income/expenses, Ordinary profit
Non-operating income/expenses improved ¥806 million compared with the corresponding
period of the previous year.
As a result of the above, ordinary profit increased 0.4%, or ¥106 million compared with thecorresponding period of the previous year, to ¥23,780 million.
Extraordinary income/losses, Profit before income taxes, Profit, Profit attributable toowners of parent
Extraordinary income/losses deteriorated by ¥523 million compared with the corresponding
period of the previous year.
As a result of the above, profit before income taxes decreased 1.8%, or ¥417 million comparedwith the corresponding period of the previous year, to ¥23,390 million.
Profit after deducting income taxes calculated in an appropriate way decreased 6.5%, or ¥1,309
million compared with the corresponding period of the previous year, to ¥18,682 million.
Profit attributable to owners of parent decreased 8.0%, or ¥1,559 million compared with thecorresponding period of the previous year, to ¥18,011 million.

3

(Operating results by segment)
Tokuyama changed the management categorizations of a certain subsidiary effective from the first quarter of the
fiscal year under review. Data for the corresponding period of the previous fiscal year has been adjusted to reflect
this change to enable the year-on-year comparison presented as follows.

Net sales(Unit: Millions of yen)

Specialty
Products

CementLife &
Amenity

Others

Total

Adjustment

Chemicals

Figures inquarterly
consolidated
incomestatement

71,16538,452

66,41842,341

49,167

267,545(31,001)

236,543

74,232

42,05369,07140,02044,308269,687(31,398)

238,289

(4.1)

(8.6)

(3.8)

5.8

11.0

(0.8)

-

(0.7)

Reportable segment

Third Quarter
Fiscal 2019
Third Quarter
Fiscal 2018
Rate of change (%)

Operating profit(Unit: Millions of yen)

Others

Total

Adjustment

Figures inquarterly
consolidated
incomestatement

Reportable segment
Chemicals

Specialty
Products

CementLife &
Amenity

Third Quarter
Fiscal 2019
Third Quarter
Fiscal 2018

11,785

4,474

2,629

2,324

4,867

26,081(1,326)24,754

12,694

6,862

2,222

2,390

2,777

26,947(1,492)25,454Rate of change (%)(7.2)(34.8)

18.3

(2.8)

75.3

(3.2)

-

(2.8)

(Note) Net sales and operating profit in each segment include inter-segment transactions.

Chemicals
Caustic soda earnings declined. Despite firm sales volume trends, this downturn in earnings waslargely due to the increase in raw material prices coupled with a deterioration in overseas market
conditions.
Vinyl chloride resin earnings increased due to the Company’s ability to maintain the spread
between raw material prices and selling prices.
Propylene oxide earnings decreased owing to a drop in sales volume for polyurethane, main
application.
Calcium chloride earnings declined. This largely reflected weak sales volume due to less snow andan increase in logistics costs.
As a result of the above, segment net sales decreased 4.1% compared with the corresponding
period of the previous fiscal year, to ¥71,165 million and operating profit decreased 7.2% to¥11,785 million. The segment reported lower earnings on lower sales.
4Specialty Products
Despite signs of a recovery in the semiconductor market, earnings from semiconductor-grade
polycrystalline silicon and thermal management materials declined. This largely reflected the
downturn in sales volumes attributable to inventory adjustments by customers.
In high-purity chemicals for electronic manufacturing, its business result was almost same as thecorresponding period of the previous fiscal year. This was due to sales volume mainly overseas
recovered.
As a result of the above, segment net sales decreased 8.6% compared with the corresponding
period of the previous fiscal year, to ¥38,452 million and operating profit decreased 34.8% to¥4,474 million. The segment reported lower earnings on lower sales.
CementCement earnings decreased. Despite manufacturing costs decreased due to a down in coal prices,
this downturn in earnings was largely due to decrease in sales volume and an increase in fixed
costs such as depreciation.
In the resource recycling business, its earnings increased due to the Company accepted a higher
volume of waste than the corresponding period of the previous year.
As a result of the above, segment net sales decreased 3.8% compared with the corresponding
period of the previous fiscal year, to ¥66,418 million and operating profit increased 18.3% to¥2,629 million. The segment reported higher earnings on lower sales.
Life & Amenity
Earnings from plastic lens-related materials increased on the back of the robust shipping trendsof photochromic materials for eyeglass lenses.
Dental materials earnings decreased. Despite an increase in sales volume mainly overseas, thisdecrease was mainly due to the increase in advertising expenses associated with the release of
new products to the market.
Earnings from medical diagnosis systems increased due to firm sales volume of Clinical Testing
devices and Systems
Earnings from ion exchange membranes decreased. This was due to a decrease in large-scale
projects.
As a result of the above, segment net sales increased 5.8% compared with the corresponding
period of the previous fiscal year, to ¥42,341 million and operating profit decreased 2.8% to¥2,324 million. The segment reported lower earnings on higher sales.

5(2) Explanation concerning financial position(Status of assets, liabilities and net assets)
As of December 31, 2019, total assets amounted to ¥380,908 million, an increase of ¥1,278
million compared with those as of March 31, 2019.
This increase primarily reflects the increase of cash and deposits of ¥4,644 million and property,
plant and equipment of ¥4,093 million due to capital investment, despite the decrease of othercurrent assets of ¥5,784 million due to receiving of damages claims relating to the plant
construction of the Tokuyama Malaysia Sdn. Bhd.
Total liabilities amounted to ¥203,264 million, down ¥12,840 million compared with those as ofMarch 31, 2019.
The principal factors are a decrease in long-term loans payable and current portion of long-termloans payable, notes and accounts payable - trade, and provision for bonuses of ¥8,354 million,¥1,972 million, and ¥1,290 million, respectively.
Net assets totaled ¥177,643 million, an increase of ¥14,118 million compared with those as ofMarch 31, 2019.
This mainly reflected the increase of retained earnings of ¥13,838. This was primarily due toposting profit attributable to owners of parent, despite decrease due to the payment of dividend.

(3) Explanation concerning information related to future prediction such as
consolidated performance forecast
Although the future business environment is uncertain because of the fluctuations in exchange
rate and raw material and fuel prices, the Company’s results were in line with our expectations at
this time. Therefore, the Company has not revised the performance forecasts, announced on
October 31, 2019.
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.

6

2. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Millions of yen)
12/31/2019

3/31/2019
AssetsCurrent assets
Cash and deposits
Notes and 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 doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

7

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

73,25776,64635
19,496
8,730
15,601
4,769△87
198,450

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

108,079△77,631
30,447463,167△419,562
43,604
22,290△20,0622,227
33,3684,878△2,504
2,374
8,175
120,198

208
71
1,693
1,973

5
65
1,607
1,678

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

22,135
2,353
21,642
10,1564,335△44
60,580
182,458
380,908

3/31/2019
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Current portion of long-term borrowings
Lease obligations
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 restructuring
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Lease obligations
Deferred tax liabilities
Provision for retirement benefits for directors (and other officers)
Provision for share-based remuneration
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

8(Millions of yen)
12/31/2019

47,268
4,361
12,667
758
3,816
2,664
3,569
－
137
91
233
17,68093,24845,296
3,556
16,433
803
2,622
1,374
4,410
284
106
78
44
17,207
92,217

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

97,291
1,840
234
228
71
1,544
288
207
222
2,211
6
6,900
111,047
203,264

10,00020,018
121,901△1,823150,095

10,00020,018135,739△1,807
163,950△1,566
△61
1,672
2,640
2,685
10,743
163,525
379,630△1,010
△36
1,047
2,428
2,428
11,265
177,643
380,908

(2) Quarterly Consolidated Statements of Income
Millions of yen
Q3 FY2018 YTD
Q3 FY2019 YTD
238,289
236,543
166,215
163,756
72,07472,787

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
Other
Total non-operating income
Non-operating expenses
Interest expenses
Fiduciary obligation expenses
Provision for decommissioning and removals
Cost of loans payable
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
Subsidy income
Gain on insurance claims
Other
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Impairment loss
Loss on disaster
Loss on tax purpose reduction entry of non-current assets
Loss on disposal of non-current assets
Loss on sales of investment securities
Litigation expenses
Other
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

9

31,09015,52846,61925,454

31,826
16,20648,03224,754

75
400
721
572
2,001
3,770

111
345
674
578
1,622
3,332

2,055
541
－
884
2,070
5,551
23,674

1,279
613
572
－
1,840
4,306
23,780

39
964
1
33
46
31
1,117

20
－
4
13
84
－
122

9
125
18
19
600
－
157
52
982
23,8083,817
19,991
420
19,570

16
－
77
1
414
1
－
－
511
23,3904,708
18,682670
18,011

(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

10

Millions of yen
Q3 FY2018 YTD
Q3 FY2019 YTD
19,991
18,682△2,768
92
△431
△167

566
24
△429
△212

△68

△205

△3,343
16,648△255
18,426

16,226421

17,753673

(4) Notes on Quarterly Consolidated Financial Statements(Change of Accounting Process Specific to Preparing Quarterly Consolidated Financial Statement)(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 fiscal year underreview including the third quarter consolidated accounting period for the fiscal year ending March
31, 2020, and calculated the tax expense by multiplying the estimated effective tax rate to the
profit/loss before income tax. However, if the application of said estimated effective tax rate
reduces the rationality of the calculation of tax expense, the Company applies the effective
statutory tax rate.

11

(5) Segment information
Third Quarter Fiscal 2018 (accumulated figures, Apr. 1, 2018– Dec. 31, 2018)

1. Information on sales and profit by reportable segment(Millions of yen)
Adjustment*2

Figures inquarterly
consolidated
incomestatement*3(31,398)(31,398)(1,492)

238,289
238,289
25,454

Reportable segments

Sales
Sales to customers
Inter-segment sales/transfer
Total
Segment profit

Chemicals

Specialty
Products

Cement73,592
640
74,232
12,69432,654
9,399
42,053
6,862

68,412659
69,071
2,222

Life &
Amenity

38,475
1,544
40,0202,390

Others*1

Total

25,154
19,15444,3082,777

238,289
31,398269,687
26,947*1 The “Others” segment comprises businesses other than those of the reportable segments. Specifically, thesegment includes overseas sales companies, a distribution company, a real estate business, etc.
*2 The segment profit adjustment amount consists mainly of basic R&D expenses that are not allocable to a
specific reportable segment and the amount of inter-segment eliminations.
*3 With regard to segment profit, operating profit in the quarterly consolidated statement of income has been
calculated by making an adjustment to the sum total of the reportable segments’ profit and the “Others”
segment’s profit.
2. Information on impairment loss of non-current assets or goodwill by reportable segment

The Company posted ¥125 million of Impairment loss in the “Life & Amenity” segment in the third quarter
consolidated accounting period for the fiscal year ending March 31, 2019.

12

Third Quarter Fiscal 2019 (accumulated figures, Apr. 1, 2019– Dec. 31, 2019)

1. Information on sales and profit by reportable segment(Millions of yen)
Adjustment*2

Figures inquarterly
consolidated
incomestatement*3(31,001)(31,001)(1,326)

236,543
236,543
24,754

Reportable segments

Sales
Sales to customers
Inter-segment sales/transfer
Total
Segment profit

Chemicals

Specialty
Products

Cement

70,399766
71,165
11,78530,044
8,408
38,452
4,474

65,958459
66,4182,629Life &
Amenity

40,984
1,357
42,341
2,324

Others*1

Total

29,15620,01049,167
4,867

236,543
31,001
267,545
26,081*1 The “Others” segment comprises businesses other than those of the reportable segments. Specifically, thesegment includes overseas sales companies, a distribution company, a real estate business, etc.
*2 The segment profit adjustment amount consists mainly of basic R&D expenses that are not allocable to a
specific reportable segment and the amount of inter-segment eliminations.
*3 With regard to segment profit, operating profit in the quarterly consolidated statement of income has been
calculated by making an adjustment to the sum total of the reportable segments’ profit and the “Others”
segment’s profit.
2．Changes in reportable segments
In accordance with the change in management categorizations of a certain subsidiary implemented from the firstquarter of the fiscal year under review, a certain subsidiary previously included in the Others segment have now
been included in the Life & Amenity segment.
Segment information for the corresponding period of the previous fiscal year has been prepared in accordance withthis change.
3. Information on impairment loss of non-current assets or goodwill by reportable segment
There are no important matters to mention.

13