Fiscal 2014 - Apr 1, 2014 to Mar 31, 2015 -Presentation for IR Meeting
April 30, 2015

CONTENTS
1 Financial Results for FY2014
2 Performance Forecasts for FY2015
3 Management Policy

4 Business Strategies
5 Supplementary Data2

1 Financial Results for FY2014

1. Financial Highlights
2. Net Sales / Operating Income
by Business Segment
3. Changes in Operating Income

3

1

Financial Results for FY2014

1. Financial Highlights Consolidated (year-on-year change)(Billions of yen)

FY2013

FY2014

Net sales
Operating income
Ordinary income
Net income/loss

287.3
20.2
14.9
10.2

302.0
19.5
12.9
(65.3)Net income per share (yen)

29.37
100
67,300(187.85)110
63,500Exchange rate (¥/$)
Domestic naphtha price (¥/kl)

Difference
Amount

+14.7
(0.7)
(2.0)
(75.5)

Qualitative information(Net sales) ¥302.0 billion, up 5%
Pluses: increased sales volume of polycrystalline silicon, high-purity chemicals for electronics manufacturing,
active pharmaceutical ingredients and other products;
selling price revision of caustic soda and other products;
commencement of the operation of the newly added consolidated subsidiaries(Operating income) ¥19.5 billion, down 4%
Plus:
profitability improvement of petrochemicals
Minus: increased depreciation at Tokuyama Malaysia
4

%

+5
(4)
(14)
-

1

Financial Results for FY2014

1. Financial Highlights Consolidated (year-on-year change)(Billions of yen)

FY2013

FY2014

Net sales
Operating income
Ordinary income
Net income/loss

287.3
20.2
14.9
10.2

302.0
19.5
12.9
(65.3)Net income per share (yen)

29.37
100
67,300(187.85)110
63,500Exchange rate (¥/$)
Domestic naphtha price (¥/kl)

Difference
Amount

+14.7
(0.7)
(2.0)
(75.5)

Qualitative information(Ordinary income) ¥12.9 billion, down 14%
Pluses:decrease in costs of idle operations
Minuses: : increase in interest expenses, posting of trial production expenses at Tokuyama Malaysia Sdn. Bhd(Net loss) (¥65.3 billion), fall into the red
Plus:increased gain on sales of investment securities
Minus: posting of impairment loss of on the polycrystalline silicon manufacturing facilities of Tokuyama Malaysia.
5

%

+5
(4)
(14)
-

1

Financial Results for FY2014

1. Financial Highlights Consolidated (compared with the previous fiscal year-end)(Billions of yen, except Shareholders’ equity ratio and D/E ratio)

Total assets
Shareholders’ equity
Shareholders’ equity ratio
Interest-bearing debt
D/E ratio
Net D/E ratio*
Net assets per share (yen)As of Mar 31, 2014

As of Mar 31, 2015

Changes

576.3
229.6
39.9%
240.7
1.05

554.5
162.5
29.3%
283.1
1.74

(21.7)(67.0)(10.5 Pts)
+42.4
+0.69

0.74

1.03

+0.29

660.18467.36

Qualitative information*Net D/E ratio: (Interest-bearing debt – Cash and deposits, Cash equivalents)/Shareholders’ equity(Total assets)
Decrease factor: decrease in property, plant and equipment resulting from the impairment of polycrystalline silicon manufacturing
facilities of Tokuyama Malaysia(Shareholders’ equity)
Decrease factor: decrease in retained earnings resulting from the posting recording of impairment loss
(Interest-bearing debt)
Increase factor: increase in long-term loans payable6

1

Financial Results for FY2014

1. Financial Highlights Consolidated (compared with September 30, 2014)(Billions of yen, except Shareholders’ equity ratio and D/E ratio)

Total assets
Shareholders’ equity
Shareholders’ equity ratio
Interest-bearing debt
D/E ratio
Net D/E ratio*
Net assets per share (yen)As of Sep 30, 2014

As of Mar 31, 2015

Changes

552.6
148.3
26.8%
295.1
1.99

554.5
162.5
29.3%
283.1
1.74

+1.8
+14.2
+2.5 Pts(11.9)(0.25)

1.25

1.03(0.22)

426.31467.36

Qualitative information*Net D/E ratio: (Interest-bearing debt – Cash and deposits, Cash equivalents)/Shareholders’ equity(Shareholders’ equity)
Increase factor: increased retained earnings resulting from that divisional profit and gain on sales of investment securities (¥10.4 billion)
were recorded(Interest-bearing debt)
Decrease factor: decrease in borrowing

7

1

Financial Results for FY2014

2. Net Sales/Operating Income by Business Segment(Year-on-year change)(Billions of yen)

FY2013

FY2014

Net sales

OperatingincomeNet sales

OperatingincomeNet sales

Chemicals

86.4

2.2

91.9

5.0

+5.4

+6

+2.8

+126

Specialty Products

52.4

6.0

55.4

4.1

+2.9

+6

(1.9)

(32)

Cement

78.9

6.6

81.2

4.4

+2.2

+3

(2.2)

(33)

Life & Amenity

57.0

4.8

58.4

5.1

+1.3

+2

+0.2

+6

Others

47.2

4.1

51.4

6.0

+4.1

+9

+1.8

+45

Total

322.2

24.0

338.5

24.8

+16.2

+5

+0.7

+3

Inter-segment eliminations
and corporate-wide
expenses(34.9)(3.7)(36.4)

(5.2)

(1.5)

-

(1.5)

-

Consolidated results

287.3

20.2

(302.0)

19.5

+14.7

+5

(0.7)

(4)

(Note) Sales and operating income shown above include inter-segment transactions.

8

Difference
Operatingincome%%1Financial Results for FY2014

3. Changes in Operating Income(Year-on-year change)(Billions of yen)

By Segment•Increase in sales volume of semiconductor-related products (+)•Increased depreciation cost at Tokuyama Malaysia (-)+2.8•Increase in sales volume of active pharmaceuticalingredients (+)•Decreased sales volume of plastic window sashes (-)

+3.0

(1.9)

20.2

(2.2)
+0.3

+0.2

+3.5

19.5

•Increased R&D expenses (-)•Other differences (+)+1.0•Improved profitability of petrochemicals (+)•Selling price revisions of caustic soda (+)•Decreased sales volume (+)•Increase in amortization of goodwill anddistributions cost (-)

FY20139Chemicals

Specialty
Products

CementLife &
Amenity

Corporate
and others

FY2014

1

Financial Results for FY2014

3. Changes in Operating Income(Year-on-year change)(Billions of yen)

By Factor
Chemicals (+)
Specialty Products (-)

20.2

+0.1
(0.6)
(0.2)
Chemicals (+)
Specialty Products (+)
Cement (-)
Life & Amenity (+)

FY2013

Sales volume

19.5

Increased Depreciation cost (-)
Increased SG&A costs (-)
Drop in raw material prices (+)
Other differences (+)

Selling price

Others

FY2014(Notes) Sales volume = (sales volume in FY2014 – sales volume in FY2013) x (unit selling price in FY2013 – unit variable cost in FY2013)
Selling price = (unit selling price in FY2014 – unit selling price in FY2013) x sales volume in FY2014
Others includes change in unit variable cost , fixed cost and others

102 Performance Forecasts for FY2015

1. Future Business Environment
2. Basis for Performance Forecasts
3. Performance Forecasts
4. Performance Forecasts
by Business Segment
5. Operating Income Change112Performance Forecasts for FY2015

1. Future Business Environment
ChemicalsConditions throughout the Chemicals segment are expected to remain uncertain. This is largely attributable to sudden anddramatic changes in raw material and fuel prices including crude oil and coal as well as the impact on sales prices.
- Tokuyama will work to secure earnings by rebuilding its business structure and adhering strictly to a policy of cost reduction.

Specialty Products
Although each of the semiconductor and solar cell markets are projected to experience firm global demand, the polycrystalline
silicon business is forecast to confront a persistently harsh operating environment due to the unresolved glut in supply.
- Efforts will be made to establish a full-scale production structure of solar-grade polycrystalline silicon at Tokuyama
Malaysia Sdn. Bhd. and accelerating the pace of measures aimed at establishing an optimal production structure forsemiconductor-grade polycrystalline silicon at Tokuyama Factory as well as calls for higher quality.

CementDelays in construction work in Japan attributable to labor shortages are expected to linger. Trends in domestic demand areforecast to remain essentially unchanged.
- Although distribution costs are expected to increase due mainly to the reinforcement of transportation capability, we will work
to secure earnings by securing sales volume and maintaining stable supply.

Life & Amenity
Recovery conditions are anticipated to spread to wider areas of the domestic economy. Consumption is also expected to grow.
In contrast, there are concerns surrounding downside economic risks overseas and especially in newly emerging countries.
- We will work to secure earnings by focusing on developing new products that meet customer needs and expanding sales ingrowing markets.

12

2

Performance Forecasts for FY2015

2. Basis for Performance Forecasts
1H FY2014
Results
Domestic naphtha price(¥/kl)

Exchange rate
(¥/$)

13

2H FY2014
Results

FY2014
Results

FY2015
Forecasts

70,40056,50063,50046,000

103

117

110

115

2

Performance Forecasts for FY2015

3. Performance Forecasts

Consolidated(Year-on-year change based on FY2015 forecasts)(Billions of yen)

FY2014 Results

FY2015Forecasts

Net income

302.0
19.5
12.9
(65.3)

312.0
21.0
14.0
8.0

Net income per share (yen)Exchange rate (¥/$)
Domestic naphtha price (¥/kl)(187.85)110
63,50023.0
115
46,000Net sales
Operating income

Ordinary income

Difference
Amount

+9.9
+1.4
+1.0
+73.3

%

+3
+8
+8
-

Qualitative information(Net sales)
Plus:
increased sales volume of polysilicon and cement(Ordinary income)Plus:
increased operating income(Operating income)Plus:
cost reduction
Minus: increased depreciation at Tokuyama Malaysia(Net income)Plus:
the Company do not post a impairment loss inthe fiscal year under review, which wasposted in the previous fiscal year.

14

2

Performance Forecasts for FY2015

4. Performance Forecasts by Business Segment(Year-on-year change based on FY2015 forecasts)
FY2014 Results

Difference

FY2015 Forecasts

Net sales

OperatingincomeNet sales

OperatingincomeNet sales

91.9

5.0

87.0

6.0

(4.9)

(5)

+0.9

+19

55.4

4.1

66.0

1.0

+10.5

+19

(3.1)

(76)

81.2

4.4

86.0

7.0

+4.7

+6

+2.5

+57

58.4

5.1

58.0

5.5

(0.4)

(1)

+0.3

+7

51.4

6.0

56.0

4.0

+4.5

+9

(2.0)

(34)

338.5

24.8

353.0

23.5

+14.4

+4

(1.3)

(5)

Inter-segment eliminations
and corporate-wide
expenses(36.4)(5.2)(41.0)

(2.5)

(4.5)

-

+2.7

-

Consolidated Results

302.0

19.5

312.0

21.0

+9.9

+3

+1.4

+8

Chemicals
Specialty Products
CementLife & Amenity
Others
Total(Note) Sales and operating income shown above include inter-segment transactions.

15(Billions of yen)

Operatingincome%%2

Performance Forecasts for FY2015

4. Performance Forecasts by Business Segment
Specialty Products
52.8

Net sales

Operating income(Billions of yen)

52.4

6.0

66.0
55.4
4.1

1.0

0.3
FY2012

Non-consolidated
Tokuyama Malaysia(non-consolidated)
16

2013

Net sales
Operating income
Net sales
Operating income

2014

2015
Forecasts

FY2014FY2015 Forecast

47.6
8.7
4.3
(4.3)

55.2
8.5
12.9
(8.1)

2

Performance Forecasts for FY2015

5. Operating Income Change(Year-on-year change based on FY2015 forecasts)(Billions of yen)

By Segment•Decrease in raw material and fuel prices (+)•Selling price weakening (-)•Companywide cost reduction (+)•Increased sales volume (+)•Companywide cost reduction (+)

21.0
+0.7

19.5

+0.9

+0.3
(3.1)

•Companywide cost reduction (+)+2.5•Increase in depreciation cost at Tokuyama Malaysia (-)•Companywide cost reduction (+)

FY201417

Chemicals

Specialty
Products•Increase in sales volume (+)•Companywide cost reduction (+)

CementLife &
Amenity

Corporate
and others

FY2015
Forecast

2

Performance Forecasts for FY2015

5. Operating Income Change(Year-on-year change based on FY2015 forecasts)(Billions of yen)

By Factor
Drop in raw material prices (+)
Cost reduction (+)
Increased depreciation cost ( -)

+8.4

(9.3)

19.5

+2.3
Chemicals (+)
Specialty Products (+)
Cement (+)
Life & Amenity (+)

FY2014

21.0

Sales volume

Chemicals (-)
Specialty Products (-)

Selling price

Others

FY2015
Forecast(Notes) Sales volume = (sales volume forecast in FY2015 – sales volume in FY2014) x (unit selling price in FY2014 – unit variable cost in FY2014)
Selling price = (unit selling price forecast in FY2015– unit selling price in FY2014) x sales volume forecast in FY2015

18

Others includes change in unit variable cost , fixed cost and others

3 Management Policy

1. Current Understandingof Conditions and Issues
2. Management Policy

19

3Management Policy

1. Current Understanding of Conditions and Issues
Current Understanding of Conditions
Tokuyama posted an extraordinary loss of ¥85.7 billion in connection with the PS-1 Plant of
its subsidiary Tokuyama Malaysia. As a result, the Company’s shareholders’ equity andshareholders’ equity ratio fell to around ¥162.5 billion and 29%, respectively. Recognizingthat business conditions remain difficult in the solar cell market, and that the Company is
yet to recoup investments in the PS-2 Plant of more than ¥130.0 billion, we cannot definitively
state that our financial condition is sound.
Coupled with steps to streamline operations and implement various other initiatives in theChemicals, Cement, Life & Amenity, and other existing businesses, favorable conditions
including the weak yen and recovery in demand are helping to bolster earnings.

Urgent Priority Issues
Rebuild the Company’s financial condition
Polycrystalline silicon business reconstruction(Get Tokuyama Malaysia into the black)Further strengthen the earnings power of existing businesses
203Management Policy

2. Management Policy (1) Rebuild the Company’s Financial Condition[1] Financial Strategy
Basic Policy
Engage in the following initiatives on a priority basis for the foreseeable future: bring about a recovery inshareholders’ equity; reduce interest-bearing debt (secure free cash flow as a source of repayment);
maintain a credit rating of BBB

Measures・Dispose of investment securities
Rationalize and・Dispose of idle assets and real estate; liquidate assets
liquidate assets
・Review of non-core businesses

21

Control theoutflow of cash

・Reduce investments as well as maintenance and repair expenses(undertake stringent and selective investment to a value of around 75% of depreciation)
・Reduce the balance of interest-bearing debt as well as the level of interest payments
・Reduce the level of compensation paid to executives and cut personnel expenses
・Relocate the Tokyo Head Office and Osaka branch; rationalize the scale of operations
・Reduce expenses (overhead, purchasing, and distribution expenses)

Maximize theinflow of cash

・Strengthen the earnings power of existing businesses
・Develop and expand new products in areas peripheral to existing businesses

3Management Policy

2. Management Policy (1) Rebuild the Company’s financial condition[2] Companywide Cost Reduction (Profit Improvement Plan)
Results up to fiscal 2014

Initiatives from fiscal 2015 and beyond•Reduce personnel expenses on an emergency basis•Continue to cutback maintenance and repairs, overhead,
distribution, and purchasing expenses•Streamline head office indirect departments•Work toward the permanent reduction of expenses byimproving productivity and implementing structural reforms

Results exceeded plans for both fiscal 2013 andfiscal 2014 due to the reduction of overhead,purchasing, personnel, and other expenses onan emergency basis as well as the drop in raw
material and fuel prices such as coal.

Cost reduction (Compared with FY2012)(Billions of yen)
R&D expenses (1.5) was recorded
in line with the suspension ofcommercialization of R&D theme

8.3

7.4

Personnel 1.8
Repairs 1.5
Distribution 0.7
Purchasing 2.9

Personnel 1.3
Repairs 0.8
Distribution 0.1
Purchasing 5.4

Overhead 1.2

FY2013

Overhead (0.3)

FY2014

12.3
Personnel 2.6
Repairs 0.8
Distribution 0.0

Purchasing 7.1
Overhead 1.7

FY2015
Plan

Note: As for purchasing and distribution expenses, increase or decrease arising from quantity or currency exchange rates are excluded.

22

3Management Policy

2. Management Policy (1) Rebuild the Company’s Financial Condition[3] Financial Target (Shareholders’ equity, Interest bearing debt, D/E ratio) (Consolidated)
Work toward a D/E ratio of 1.0 or less, a recovery in shareholders’ equity,and a reduction in interest-bearing debt by the fiscal year ending March 31, 2018.
Shareholders’equityInterest bearing debt

D/E ratio(Billions of yen)

Net D/E ratio
283.1
1.74

249.2

241.1

237.3

240.7
229.6
217.5
187.7
0.86

183.5

0.52
0.21
95.9

09/3
23

0.42
100.0
0.02

10/3

0.52
126.2

0.60
148.6

1.05

1.00

1.03

0.74 162.5
0.59

0.22

0.01

11/3

12/3

13/3

14/3

15/3

16/3
(Plan)

17/3(Plan)

18/3(Plan)

3

Management Policy

2. Management Policy (1) Rebuild the Company’s Financial Condition[4] Basic Policy for Profit Distribution and Dividends for Fiscal 2014 and 2015
Tokuyama maintains the basic policy for profit distribution of providing continuous, stable dividends to
its shareholders while taking into consideration its performance trends and the medium- and long-termbusiness plans.
After taking into consideration the negative impact on net assets after posting a net loss and thedecision to prioritize efforts aimed at restoring the Company’s sound financial position, after accounting
for business risks, Tokuyama deeply regrets that it has decided to forego the payment of a period-end
dividend for the fiscal year under review. For the reasons stated above, we have also decided to forego
the payment of an interim and period-end dividend for the next fiscal period. Tokuyama is committed toquickly restoring its financial condition and to secure stable earnings power. We will work diligently toensure a resumption in the payment of dividends at the earliest possible opportunity.
We sincerely request continued support and understanding of all shareholders and investors.

24

FY2009

2010

2011

2012

2013

2014

2015
Forecast

Interim (yen)

3.0

3.0

3.0

0.0

3.0

0.0

0.0

Year-end (yen)

3.0

3.0

3.0

3.0

3.0

0.0

0.0

Payout Ratio (%)(Consolidated)

25.5

21.4

22.3

－

20.4

－

－

(Note) The dividend payout ratio for FY2014 and FY2012 are not presented, because the Company reported a net loss

3Management Policy

2. Management Policy(2) Polycrystalline Silicon Business Reconstruction

Hasten the pace of efforts aimed at returning Tokuyama Malaysia Sdn. Bhd. to the black andestablishing an optimal production structure at Tokuyama Factory- Fiscal 2014

* Except for PS-1

Feb 2011
Commenced construction
Feb 2013
Completed construction
Sep 2014
Posted impairment loss

PS
2

Feb 2012
Commenced construction October 2015: Periodic Achieve further
maintenancereductions in production
Jan 2014
January
2016:
Establish
costs through process
Completed constructionafull-scale
production
improvement activities
Oct 2014
structure
Generate profits on a
Commenced commercial
single month basis
operation

Apr 2009
Completed capacity expansion(9,200T/y)
Tokuyama Plant
Production capacity:
6,200tonnes/year*(Semiconductor grade)*Except for inactive line

25

Fiscal 2016

PS
1Tokuyama Malaysia
Production capacity：
13,800tonnes/year*(Solar-cell grade)

Fiscal 2015

Aug 2012
Started reducing production
against a backdrop of market
deterioration
Mar 2013
Posted impairment loss

Fiscal 2017

Consider the business feasibility ofsolar cell-grade polycrystalline
silicon together with measures
aimed at promoting effective use
Achieve profitable
operations for thefull period

Promote optimal production and stable supply inresponse to demand for semiconductor-grade
polycrystalline silicon (resume operations at inactive
production lines); work toward higher quality
production; reduce costs

3Management Policy

Further strengthen the earnings power of
2. Management Policy (3) existing
businesses
Profit Improvement of Existing / New Businesses (Profit Improvement Plan)
Results up to fiscal 2014
Promoted existing business structural reform;
established new businesses

Continue and complete existing businessstructural reform; expand new businesses

Chemicals

Chemicals・Established a liquid hydrogen business
・Decided to pursue vinyl chloride business structural reform・Commenced soda ash joint business company operations
・Increased propylene oxide production capacity

Specialty Products
・Increased aluminum nitride production capacity

26

Initiatives from fiscal 2015 and beyond

・Consider expanding the liquid hydrogen business・Suspend operations at the vinyl chloride resin Chiba factory
・Set up a sole soda ash manufacturing company in Japan

Specialty Products・Upgrade and expand fumed silica high performance products
・Develop new heat sink materials
・Consider capacity expansion of photoresist developer

3Management Policy

Further strengthen the earnings power of
2. Management Policy (3) existing
businesses
Profit Improvement of Existing / New Businesses (Profit Improvement Plan)
Results up to fiscal 2014

Initiatives from fiscal 2015 and beyond

Promoted existing business structural reform;
established new businesses

Continue and complete existing businessstructural reform; expand new businesses

Cement・Established a business for recycling waste gypsum boards・Strengthened clinker export infrastructure

CementLife & Amenity

Life & Amenity
・Expand sales volume of microporous film fordisposable diaper
・Increase sales volume of photochromic materials
・Upgrade manufacturing facility of active
pharmaceutical ingredients for generic drugs

・Expand sales volume of active pharmaceuticalingredients for generic drugs
・Accelerate the pace of overseas businessdevelopment

・Expand the business for recycling waste gypsum boards
・Expand the infrastructure maintenance and reinforcementbusiness

R&D

・Develop new products that make the most of existing
businesses and technologies
27

3Management Policy

2. Management Policy
We are in the process of formulating our new medium-term management plan.
Centennial Vision ”Venture Spirit & Innovation”
・Bolster International Competitiveness ・Strengthen Strategically Growing Business
Net Sales

35.3
307.4

Operating Income

Rapid deteriorationin market conditions
for solar-grade polysilicon

300.9

273.1
22.7

289.7

16.4

28

FY11

19.5

20.2

20.1

Further Select and Concentrate for Aggressive
Business Expansion
Capacity expansion of polysilicon plant at
Tokuyama Factory
Start of polysilicon plant construction in Malaysia

FY10

312.0

302.0

258.6

Three year Plan
The 1st Step
“Take Off”

FY09

・Reconstruct Polycrystalline Silicon Business・Improve Profits in Existing and New Businesses
・Improve Companywide Profitability

287.3

282.3

13.7

FY08

Profit Improvement Plan

(Billions of yen)

21.0

Three year Plan
The 2nd Step
“Accelerating Our
Growth Strategies”
6.7

FY12

FY13

FY14

FY15

FY16
forecast

FY17

FY18

3

Management Policy

2. Management Policy
Summary
We have positioned efforts aimed at rebuilding our financial platform as our utmost priority
in order to reinforce the net assets damaged by polycrystalline silicon business. On thisbasis, we are committed to pursuing management reform. In order to become a robust
corporate entity that boasts high profitability from the standpoint of its customers, we will
review the way we go about our business as well as our organizational structure and work
to expand businesses that are capable of enhancing productivity and efficiency.
Tokuyama Group is in the process of formulating a new medium-term management planand plans to announce the plan including the numerical targets at the earnings release of
the first quarter of fiscal 2015.
We sincerely request your continued support and understanding.

29

4 Business Strategies

1. Companywide Business Portfolio
Management
2. Chemicals Segment
3. Specialty Products Segment
4. Cement Segment
5. Life & Amenity Segment30

4Business Strategies

1. Companywide Business Portfolio Management
Build a balanced business portfolio that is both resilient against and flexible toward changes in thebusiness environment by strengthening, rebuilding, and reorganizing existing businesses andexpanding new product development and businesses in peripheral fields
Work toward strengthening business and earnings powerby expanding the scale of activities and further
distinguishing products in industries where growth inprojected in global markets：

Overseas Sales ratio

Global, profit expansion-10.0%

Polycrystalline silicon, Fumed silica, Shapal (Aluminum
nitride, Fine chemicals, Microporous film, Clinical Analyzers,
Dental Materials, Gas sensors, Ion exchange membranes

Domestic, stable profit

0.0%

10.0%

20.0%

30.0%

40.0%

Operating margin ratio
Work to secure stable earnings through a variety of measures including rationalization and the reduction of costs targeting industries that handle
materials and components used mainly in Japan：
Cement, Recycling & Environment, Soda ash and calcium chloride, Chlor-Alkali and vinyl chloride, Polyolefin film, Plastic window sashes

31

4

Business Strategies

2. Chemicals Segment
Basic PolicyIn addition to recording stable profits and providing the underlying strength to support theCompany’s earnings as a whole, work toward further growth by reviewing the business portfolio

Measures<Soda Ash and Calcium Chloride Business>
Undertake the supply of soda ash in Japan under a single
company structure and put in place a stable sales platform by
establishing the joint-venture company TOKUYAMA &CENTRAL SODA Inc.
<Chlor-Alkali and Vinyl Chloride Business>
Strengthen the competitiveness of private power
generation and electrolytic chlor-alkali production with theaim of further reducing the cost of caustic soda
Strengthen profitability in the chlorine derivatives business(take steps to expand production facilities of propylene oxide,streamline PVC operations, develop new products, etc.)
Promote the effective use of hydrogen (liquid hydrogen,fuel alternative)
32

Net sales

Operating income(Billions of yen)

86.4

91.9

87.0

77.3

6.0
5.0
2.2
0.4
FY2012

2013

2014

2015
Forecasts

4

Business Strategies

2. Chemicals Segment
Activities aimed at reconstructing businesses and reinforcing competitiveness
Expanding production facilities of propylene oxide(September 2014)
Build a supply structure to address the shift in demand

PO

Integrating the soda ash and calcium
chloride businesses
Move toward the production of soda ash in
Japan under a single company structure from
June 2015

Cl2（Chlorine)

Soda Ash andCalcium Chloride

Shutdown production at the Chiba
Factory of Shin Dai-ichi Vinyl Corporation

Methyl Chloride(End of September 2015)
Consolidate PVC production at the highly
competitive Tokuyama Factory

Chloride

Tokuyama Factory
Soda and electrolytic
chlor alkali chainSalt

EDC VCM PVC

Polysilicon
Electrolysis

H2(Hydrogen)

Power
StationCaustic Soda

Strengthening the competitiveness of private power
generation and electrolytic chlor-alkali production
33

Promoting the effective use of hydrogen
Expand the liquid hydrogen business(from June 2013)
Utilize as a fuel alternative at factories

4

Business Strategies

3. Specialty Products Segment
Basic Policy
Promote a sales strategy and optimal production structure that fully addresses changes in the operating
environment including customer needs and market conditions

Measures<Semiconductor grade Polycrystalline Silicon Business >Net sales

Strengthen relationships and expand transactions with existingusers
Work toward stable supply at Tokuyama Factory and higher
quality production<Solar-cell grade grade Polycrystalline Silicon Business>

Operating income(Billions of yen)

66.0
52.8

6.0
52.4

Work toward full operating capacity at Tokuyama Malaysia
Sdn. Bhd. and the reduction of costs
Work toward increasing market share by leveraging
competitive strengths in quality and costs; establish a robust“TOKUYAMA” market presence

55.4
4.1

<Fumed Silica Business>Upgrade and expand highly functional products; establish
optimal production with Tokuyama Chemicals (Zhejiang) Co.,Ltd.

<Shapal (Aluminum Nitride) Business>

Increase production capacity and expand business in the “heatsink” market
34

1.0
0.3
FY2012

2013

2014

2015
Forecasts

4

Business Strategies

3. Specialty Products Segment
Polycrystalline Silicon Business (Semiconductor-grade)
With the trend toward smartphones with increasingly sophisticated functions at the head of the list, thesemiconductor market is projected to increase at an average annual rate of 3-4% in the futureWith semiconductors offering increasingly higher levels of performance (miniaturization), the demand forhigher levels of polycrystalline silicon quality is also increasing
・Establish an optimal production structure that addresses demand with a view to increasing production
at the quality competitive Tokuyama Factory (resume operations at inactive production lines)
・Further strengthen relationships and expand transactions by accurately grasping user needs andresponding in a timely fashion
Billionsof US$

400

Semiconductor Market by ProductLogic
AnalogSensors

MemoryOpto

Polysilicon Market（Semiconductor-grade)(Tonnes)

Micro
Discrete

30,00025,000300

20,000200

15,00010,000100

5,000

Polycrystalline silicon

0

0
2012

35

2013

2014

2015

2016

(Note ) Prepared by Tokuyama based on WSTS

2012

2013

2014

2015

2016

(Note ) Tokuyama estimate

4

Business Strategies

4. Cement Segment
Basic PolicyPut in place an optimal production, sales, and distribution structure that is capable of addressingchanges in the business environment while cultivating and strengthening overseas as well as new
businesses

Measures

Net sales

Operating income(Billions of yen)

<Cement Business>Cutback costs by focusing on efforts aimed at reducing theuse of burning coal and increasing the use/intake ofcombustible waste
Establish a clinker export structure and ensure stable
operations at Tokuyama Nouvelle Calédonie S.A.

78.9
69.9

81.2

86.0
7.0

6.6

5.3
4.4

Upgrade and expand the infrastructure maintenance andreinforcement business through Tokuyama Mtech Corp.
<Recycling and Environment Business>
Expand the business for recycling waste gypsum boards
through Tokuyama Chiyoda Gypsum Co., Ltd.
36

FY2012

2013

2014

2015
Forecasts

4

Business Strategies

4. Cement Segment
Infrastructure maintenance and reinforcement business (Tokuyama M-tech)
Projected increase in infrastructure development projects on the back of new technological needs relating to
infrastructure revitalization, a growing social issue, and the lead-up to the Tokyo Olympic Games
Operations commenced at the newly established Metropolitan Cement Building Materials Development Centerfrom January 2015; located next to the Company’s factory in Sodegaura City, Chiba Prefecture, the Center has
been designed as a development structure that will work in close collaboration with users
Priority placed on the development of products in six fields: aseismic reinforcement, bridge columns, roadways,
ports, tunnels, and soil improvement; work to expand Tokuyama M-tech’s infrastructure maintenance andreinforcement business
災害復旧費
更新費
維持管理費

Long-Term Projections for Infrastructure［Trillions of yen］ Maintenance Management and Renewal Expenses

12
10Disaster recovery expenses
Renewal expenses
Maintenance management expenses

8
6
4
2

Examples of infrastructure maintenance(viaduct maintenance attributable to aging)
37

0
1965

75 80

90

2000

10

20

30

40

50

60

(Note) Prepared by the Company from the “WHITE PAPER ON LAND, INFRASTRUCTURE, TRANSPORTAND TOURISM IN JAPAN, 2012 issued by Japan’s Ministry of Land, Infrastructure, Transport and Tourism

4Business Strategies

5. Life & Amenity Segment
Basic PolicySecure a position of advantage in markets both in Japan and overseas, pursue business expansion,and contribute to improving people’s quality of life by establishing and strengthening
a customer-oriented development, manufacturing, and sales structure

Measures<NF Business>
Expand China business earnings<Fine Chemical Business>
Expand market share in photochromic dye materials for use
in eyeglass lenses
Continue to expand sales of active pharmaceuticalingredients for generic drugs<Polyolefin Film Business>Develop and expand sales of new grades while reducing
costs<Gas Sensors Business(Figaro Engineering Inc.)>
Introduce new products to the market; expand earnings inline with the advance of automation<Dental Materials Equipments Business (Tokuyama Dental)>Develop new products and accelerate the pace of overseas
business development
38

Net sales

Operating income(Billions of yen)

57.0
51.0

4.8

58.4
5.1

58.0
5.5

2014

2015
Forecasts

2.9

FY20122013

4

Business Strategies

5. Life & Amenity Segment
Gas Sensors Business (Figaro Engineering Inc)
Introduce new products (MEMS* type gas sensor) to the market
Develop sensors that can be applied to such wide-ranging M2M
devices as mobile devices, environmental monitors, and monitoring
robots World’s smallest sensor
0.99mm×2.5mm×3.2mm
 Low power consumption
Reduction from 201mW to 15mW
compared with conventional products

Sales Plan for Sensors (All Types)

5ヵ年計画 (Millions of units)
販売数量（単位：百万個）

16.8 17.6

19.1 19.8

21.2

22.4

*MEMS: Micro Electro Mechanical Systems

Advance of automation
Automated the production line of mainstay electrochemicaltype CO sensors
Improved quality
Lower cost
Volume production
39

2014 2015 2016 2017 2018 20194 Supplementary Data
1. Consolidated Financial Statements
2. Cash Flows
3. Non-Operating Income/Expenses
4. Extraordinary Gains/Losses
5. Net Sales/Operating Income by Business
Segment
6. Principal Indicators
7. Performance Trend
8. Price Trend of Main Raw Material and Fuel
9. CAPEX and Depreciation Trend
10. Interest-bearing Debts Trend
11. Free Cash Flow Trend
12. Revised Performance Forecasts (1H/2H)
13. Polysilicon Market
14. PV Market
41

4

Supplementary Data

1. Consolidated Financial Statements Income Statements(Billions of yen)
FY2013

287.3

302.0

+14.7

+5

Cost of sales

206.9

218.9

+11.9

+6

Selling, general andadministrative expenses

60.0

63.6

+3.5

+6

20.2

19.5

(0.7)

(4)

(5.3)

(6.6)

(1.3)

-

14.9

12.9

(2.0)

(14)

Extraordinary income/expenses(2.0)(77.9)(75.8)-

Income/loss before income
taxes and minority interests

12.9(64.9)(77.9)

-

2.7

0.3

(2.3)

(87)

10.2

(65.3)(75.5)-Net sales

Operating income
Non-operating income/expenses

Ordinary income

Income taxes and minority interests

Net income/loss
42

Difference
Amount%

FY2014

4Supplementary Data

1. Consolidated Financial Statements Balance Sheets (Billions of yen)
3/31/2014

%

576.3

554.5

(21.7)(4)

Current assets

191.6

243.9

+52.3

+21

Tangible fixed assets

323.1

253.3

(69.7)(28)

Intangible fixed assets

10.1

9.7

(0.3)

(4)

Investments and other assets

51.4

47.4

(4.0)

(8)

Total assets

3/31/2014

3/31/2015

ChangesAmount

%

339.8

385.0

+45.2

+12

Current liabilities

99.2

117.2

+18.0

+15

Long-term liabilities

240.5

267.7

+27.2

+10

236.4

169.4

(67.0)(40)

Total liabilities

Total net assets
43

ChangesAmount3/31/2015

4

Supplementary Data

2. Cash Flows

Consolidated (year-on-year change)(Billions of yen)

FY2013

FY2014

Cash flows from operating activities (1)

34.1

30.7

Cash flows from investing activities (2)(64.4)(25.5)

Free cash flows (3) ((1)+(2)）(30.2)

5.2

Cash flows from financing activities (4)

45.9

40.5

Effect of exchange rate changes on cash and cash equivalents (5)

1.4

0.3

Net increase (decrease) in cash and cash equivalents (6)((3)+(4)+(5))

17.1

46.1

Cash and cash equivalents at beginning of the year (7)

52.4

69.9

Increase (decrease) in cash and cash equivalents due to changesof scope of consolidation and change in fiscal period of
consolidated subsidiaries (8)

0.4

0.0

Cash and cash equivalents at end of the year (9) ((6)+(7)+(8))

69.9

116.1

44

4

Supplementary Data

3. Non-Operating Income/Expenses Consolidated (year-on-year change)(Billions of yen)

FY2013Non-operating
incomeNon-operating expenses
45

FY2014

ChangesInterest and dividend
income

0.5

0.7

+0.1

Other income

2.4

2.1

(0.3)

Total

3.0

2.8

(0.1)

Interest expenses

2.7

4.7

(2.0)

Other expenses

5.6

4.7

+0.8

Total

8.3

9.4

(1.1)

Non-operating
income/expenses

(5.3)

(6.6)

(1.3)

Notes

Decreased foreign exchange gains(0.4)

Borrowing cost +1.7
Decrease in costs of idle operations +1.4
Trial production expenses(1.5)
Increased foreign exchange losses (0.4)

4

Supplementary Data

4. Extraordinary Gains/Losses

Consolidated (year-on-year change)(Billions of yen)

FY201346

FY2014

Changes

Notes

Extraordinary
gains

0.6

10.5

+9.8

Gain on sales of investment securities+10.0

Extraordinary
losses

2.7

88.4(85.7)

Impairment loss for fixed assets
Loss on purchase contract (including provision)(75.6)(10.9)

Extraordinary
gains/losses(2.0)(77.9)(75.8)

4

Supplementary Data

5. Net Sales/Operating Income by Business Segment(Year-on-year change)

ChemicalsHigher earnings on higher sales
Net Sales

Operating Income(Billions of yen)

91.9

86.4

(Caustic soda)•Sales volume increase in domestic market•Selling price revision in order to absorb a rise in raw material
prices5.0
2.2

FY2013

Qualitative information

FY2014(Soda ash and calcium chloride)•Increased net sales due to commencement of the operation of
TOKUYAMA & CENTRAL SODA Inc.
(Vinyl chloride monomer (VCM))•Decrease in raw material costs arising from domestic naphtha
price down
•Improved profitability owing to high export prices against the
backdrop stronger Asian market conditions(Vinyl chloride resin)•Decreased sales volume due to a drop in housing starts•Selling price revision in order to absorb a rise in raw material
prices47

4Supplementary Data

5. Net Sales/Operating Income by Business Segment(Year-on-year change)

Specialty Products
Net Sales

Lower earnings on higher sales
Operating Income

Qualitative information(Billions of yen)

6.0
52.4

55.4
4.1

(Polycrystalline silicon)•Increased sales volume of semiconductor-grade polycrystalline
silicon owing mainly to strong demand for mobile terminals including
smartphones•Increased sales volume of solar-grade polycrystalline silicon
resulting from commencement of shipments from Tokuyama
Malaysia(Fumed silica)•Increased sales volume, mainly of its application as a polishingmaterial for semiconductors

FY2013

FY2014(Aluminum nitride)•Higher sales volume of such applications as heat dissipationmaterials used for power devises and LEDs
(High-purity chemicals for electronics manufacturing)•Higher sales volume of such applications as semiconductor andliquid crystal production48

4

Supplementary Data

5. Net Sales/Operating Income by Business Segment(Year-on-year change)

CementLower earnings on higher sales
Net Sales

Operating Income(Billions of yen)

81.2

78.9

4.4

(Cement)•Sluggish sales volume in domestic market due to delay inconstruction work caused by a labor shortage and unseasonably
bad weather•Increased exports to Asia against the backdrop of steadydemand in the Asian market•Increased distribution costs due to the construction of new
cement tankers.
•Increased net sales owing to commencement of the operation ofHiroshima Tokuyama Ready Mixed Concrete Co., Ltd.

FY2014(Recycling and environment-related business)•The Company accepted a lower volume of waste as a result of
its lower clinker production

6.6

FY201349

Qualitative information

4

Supplementary Data

5. Net Sales/Operating Income by Business Segment(Year-on-year change)

Life & Amenity
Net Sales

Higher earnings on higher sales
Operating Income(Billions of yen)

58.4

57.0

50

4.8

5.1

FY2013

FY2014

Qualitative information(Active pharmaceutical ingredient)•Increased sales volume, mainly of such applications as genericdrugs(Plastic lens-related materials)•Increased sales volume of photochromic materials(Microporous film)•Increased sales volume due to commencement of operation in
Tianjin(Polyolefin film)•Increased sales volume of products mainly for convenience stores•Selling price revision in order to absorb a rise in raw material
prices(Gas sensor)•Increase sales volume of such applications as gas alarm devises
and air cleaners(Medical diagnosis system)•Increase sales volume of products for blood testing•Improved profitability resulting from cost reduction efforts(Plastic window sash)•Decreased sales volume arising from reaction to the rush demand
before the consumption tax increase

4

Supplementary Data

6. Principal Indicators ①(year-on-year change)(Billions of yen)

FY201351

FY2014

Changes

Consolidated

NonConsolidated

Consolidated

NonConsolidated

Consolidated

NonConsolidated

Capital expenditures

61.0

5.1

25.3

8.3

(35.7)+3.2

Depreciation andamortization

16.7

11.3

18.8

10.4

+2.1

(0.8)

R&D expenses

8.7

6.4

10.1

7.8

+1.4

+1.4

Financial income andexpenses

(2.1)

1.9

(4.0)

3.6

(1.8)

+1.7

4

Supplementary Data

6. Principal Indicators ②(compared with the previous fiscal year-end)

3/31/201452

3/31/2015

Changes

Consolidated

NonConsolidated

Consolidated

NonConsolidated

Consolidated

NonConsolidated

Interest-bearing
debts

Billionsof yen

240.7

220.0

283.1

262.6

+42.4

+42.5

Number of
employees

Persons

5,756

2,041

5,852

1,970

+96

(71)

4

Supplementary Data

6. Principal Indicators ③(year-on-year change based on FY15 forecasts)(Billions of yen)

FY2015 Forecasts

53

FY2014 Results

Changes

Consolidated

NonConsolidated

Consolidated

NonConsolidated

Consolidated

NonConsolidated

Capital expenditures

18.9

10.0

25.3

8.3

(6.4)

+1.6

Depreciation andamortization

22.2

11.0

18.8

10.4

+3.3

+0.6

R&D expenses

9.5

7.0

10.1

7.8

(0.6)

(0.8)

4

Supplementary Data

7. Performance Trend

Consolidated (Annual)
Income (Billions of yen)

Net sales (Billions of yen)
350

75
307.4

300
250

292.7
34.7
31.6
18.4

18.8

150

289.7
273.1

35.3
30.3

200

300.9

22.7

287.3

282.3

50

258.6
20.1

16.4
20.3

312.0

302.0

13.7

15.3

17.3

7.4

9.7

11.5
9.3

20.2
6.7
14.9
10.2

3.2

19.5

21.0
8.0

12.9

25

14.0
0

(5.5)
-25

100
(37.9)-50

50(65.3)
0

-75
FY06

07

Net sales

54

08

09

10

Operating income

1112

Ordinary income

13

14

15
Forecast

Net income

4Supplementary Data

7. Performance Trend(Quarter)

Consolidated(Billions of yen)

90.0

9.00

80.0

70.0

70.6

79.47.76

72.8

71.2

80.0

72.6

5.57
4.70

50.0

4.69

5.01

6.00

5.27

5.00
3.66

3.10

4.00

30.0

3.00

20.0

2.00

10.0

1.00

0.0

0.00
Q1/FY13 Q2/FY13 Q3/FY13 Q4/FY13 Q1/FY14 Q2/FY14 Q3/FY14 Q4/FY14Net Sales

55

8.00

7.00

64.3

60.0

40.0

78.1

Operating Income

4Supplementary Data

7. Performance Trend(Quarter)

Chemicals(Billions of yen)

30.0

3.00

25.0
21.1

22.4

22.4

22.6

20.4

24.1

23.8

2.50

21.2

20.0

2.00

15.0

1.27

10.0

1.18

1.34

1.25

1.50
1.00

0.83
0.61

5.0

0.36

0.42

0.50

0.0

0.00
Q1/FY13 Q2/FY13 Q3/FY13 Q4/FY13 Q1/FY14 Q2/FY14 Q3/FY14 Q4/FY14Net Sales

56

Operating Income

4Supplementary Data

7. Performance Trend(Quarter)Specialty Products(Billions of yen)

40.0

4.00

3.78

35.0

3.50

30.0

3.00

25.0

2.50

20.0

17.2

15.0
10.0

10.2
0.54

13.1
1.05

11.8

1.71
11.1
0.99

12.9

16.9
14.3

1.50

0.94

1.00

0.71
0.47

5.0
0.0

0.50
0.00

Q1/FY13 Q2/FY13 Q3/FY13 Q4/FY13 Q1/FY14 Q2/FY14 Q3/FY14 Q4/FY14Net Sales
57

2.00

Operating Income

4Supplementary Data

7. Performance Trend(Quarter)Cement(Billions of yen)

25.0
20.0
15.0

2.50

19.1

21.7
1.99

20.8
1.90

21.6
19.3

20.8

19.3

2.00

17.3
1.33

1.47

1.44

1.50

1.31
0.91

10.0

0.73

5.0

0.50

0.0

0.00
Q1/FY13 Q2/FY13 Q3/FY13 Q4/FY13 Q1/FY14 Q2/FY14 Q3/FY14 Q4/FY14Net Sales

58

1.00

Operating Income

4Supplementary Data

7. Performance Trend(Quarter)

Life & Amenity(Billions of yen)

20.0

2.00
1.77
16.4

15.0
12.5

14.5
1.33

16.0
14.0

13.4

1.39

13.7

1.50
14.6

1.50

1.19
1.07

1.02
10.0

1.00
0.73

5.0

0.50

0.0

0.00
Q1/FY13 Q2/FY13 Q3/FY13 Q4/FY13 Q1/FY14 Q2/FY14 Q3/FY14 Q4/FY14Net Sales

59

Operating Income

4Supplementary Data

8. Price Trend of Main Raw Material and Fuel
Australian thermal
coal spot price ($/t)

Domestic naphtha price(¥/KL)

75000
70000

110
Australian thermal coal

100
90

65000

80
60000
70
55000

Domestic naphtha

60

50000
45000

60

50
FY2012FY2013

FY201440

4Supplementary Data

9. CAPEX and Depreciation Trend(Billions of yen)consolidated

non consolidated

100.0

depreciation (consolidated)
97.5

90.0
77.6

80.0
70.0

61.0

60.0

52.5

50.0

81.6

4.8
63.6

37.0

40.0
30.0

22.6

37.6

9.6

35.8
31.4

26.5

23.2

22.5

20.0

2.5

18.1

21.4

22.9

55.9

28.4

11.1

61

16.9

22.2
18.9

18.8

8.8

16.7

10.0
0.0

25.3

20.1

27.4

47.7

15.4

13.3

13.9

15.9

5.1

8.3

10.0

07/3

08/3

09/3

10/3

11/3

12/3

13/3

14/3

15/3

16/3
(forecasts)

4Supplementary Data

10. Interest-Bearing Debts Trend Consolidated(Billions of yen)

Short-term debt

Long-term debt

Unsecured bonds

D/E ratio

400.0

1.74

350.0

300.0
0.86
250.0
200.0

0.47

0.52
0.37

0.32

0.42

83.5

50.0

187.7

50.0

50.0

95.9
72.0

100.0

192.5
50.0

35.1

165.2

15.1

102.3

64.2

20.0

30.0

25.0

68.3

68.6

73.7

58.8

20.1

23.1
18.8

17.0
22.2

17.0

16.5

22.5

24.9

35.3

25.5

40.6

06/3

07/3

08/3

09/3

10/3

11/3

12/3

13/3

14/3

15/3

34.8
28.5

62

240.7

126.2

50.0
0.0

283.1

0.60

148.6

150.0
100.0

0.52

1.05

4

Supplementary Data

11. Free Cash Flow Trend(Billions of yen)
60.0
40.0

47.6

42.4

34.2

37.0
29.3

22.0
20.0

34.1

27.0

30.7

17.0

11.6

5.2

0.0
(20.0)(22.5)(40.0)(7.0)(14.0)(25.6)(30.6)(36.4)(56.5)(25.5)(43.6)(51.4)(60.0)(30.2)(57.6)(60.6)

FY11

FY12(64.4)(80.0)(88.5)(100.0)
FY06

FY07

FY08

FY09

Operating Cash Flow
63

FY10

Investing Cash Flow

FY13

Free Cash Flow

FY14

4

Supplementary Data

12. Revised Performance Forecasts (1H/2H)(Billions of yen)(Compared with previous forecasts)
FY2014 Results
1H

2H

FY2015 Forecasts
Total

1H

2H

Total

Net sales

143.8

158.2

302.0

151.0

161.0

312.0

Operating income

10.5

8.9

19.5

8.5

12.5

21.0

Ordinary income

8.2

4.6

12.9

6.0

8.0

14.0

Net income(80.5)

15.1(65.3)

3.0

5.0

8.0

Net income per share (yen)(231.40)

43.55(187.85)

8.62

14.38

23.00

103

117

110

115

115

115

70400

56,50063,50046,00046,00046,000Exchange rate (¥/$)
Domestic naphtha price(¥/kl)

64

4

Supplementary Data

12. Revised Performance Forecasts (1H/2H)(By business segment, compared with previous forecasts)(Billions of yen)

FY2014 Results

1H
Net
sales

FY2015 Forecasts

2H

Operatingincome

Net
sales

Total

Operatingincome

Net
sales

1H

Operatingincome

Net
sales

2H

Operatingincome

Net
sales

Total

OperatingincomeNet
sales

OperatingincomeChemicals

43.9

2.4

47.9

2.5

91.9

5.0

42.0

2.0

45.0

4.0

87.0

6.0

Specialty
Products

24.1

2.7

31.3

1.4

55.4

4.1

31.0

0.0

35.0

1.0

66.0

1.0

Cement

38.6

2.2

42.5

2.2

81.2

4.4

42.0

3.0

44.0

4.0

86.0

7.0

Life &
Amenity

30.0

2.5

28.3

2.5

58.4

5.1

29.0

2.5

29.0

3.0

58.0

5.5

Others

24.9

2.6

26.5

3.3

51.4

6.0

27.0

2.0

29.0

2.0

56.0

4.0

Total

161.7

12.6

176.7

12.1

338.5

24.8

171.0

9.5

182.0

14.0

353.0

23.5

Inter-segment
eliminations andcorporate-wide
expenses(17.9)(2.0)(18.5)(3.2)(36.4)(5.2)(20.0)(1.0)(21.0)(1.5)(41.0)(2.5)

Consolidated
Results

143.8

10.5

158.2

8.9

302.0

19.5

151.0

8.5

161.0

12.5

312.0

21.0

65

4

Supplementary Data

13. Polysilicon Market
Supply-demand forecast of polysilicon
Supply capacity/Demand (tonnes)

700,000*Tokuyama estimate

600,000

500,000<Solar cell-grade polysilicon demand>•Despite a substantial decline in installed PV capacity owing mainly
to cutbacks in subsidies in Europe, projected annual increase indemand exceeding 10-15% largely reflecting forecast growth due
attributable to aggressive installation initiatives in such countries asJapan, China, and the U.S.

400,000
300,000
200,000<Supply side>•Excess supply capacity expected to continue for the foreseeable
future; cost competitiveness recognized as the key to survival

100,000
02013 2014 2015 2016 2017 2018 2019
Demand (Solar cells)）

Supply capacity of other producers

Demand (Semiconductors)

Supply capacity of major producers(Note 1) Major producers mean Tier1 manufactures in the classification by IHS.
(Note 2) Demand is estimated by Tokuyama based IHS

66

Forecasts<Semiconductor-grade polysilicon demand>•Projected annual increase of 3-4% on the back of an upswing in
demand for use in tablet terminals and smartphones

4

Supplementary Data100

13. Polysilicon Market

80
60

Solar-cell grade Polysilicon Spot Price Trend 40(US$/KG)

20

24

(

0

2009/7/1

2010/7/1

2011/7/1

2012/7/1

2013/7/1

2014/7/1

22

20

18

16

14

2013/1/2

2013/4/2

2013/7/2

2013/10/2

2014/1/2

2014/4/2

2014/7/2

2014/10/2

2015/1/2

2015/4/2

Source：PV insights

67

4

Supplementary Data

14. PV Market
Forecasts of installed PV capacity by region
Unit:GW

80

70
60
50

40
30
20

10
0
2013 2014 2015 2016 2017 2018 2019
Europe (Big 9)

Asia

N. America

ROW(Note) Tokuyama estimate based on IHS Market Tracker (PVIntegrated) Q1 2015

68

Conditions in each country<China>In a bid to ensure sound industry growth, the government announced
specific targets for the introduction of solar power generation facilities:
A cumulative total of 70GW by 2017
Installation volume in 2014: 10.6GW
 China’s National Energy Administration has upwardly revised its
2015 solar power energy installation target from 15GW to 17.8GW<Japan>Since the launch of the existing feed-in tariff system in July 2012,
Japan has witnessed a rapid surge in the amount of solar power
generation introduction
Installation volume in 2014: 8.6GW (on an AC basis)<U.S.>
Policy measures aimed at promoting the widespread use of a variety
of solar power generation facilities is driving market growth; inparticular, public policy measures at the state level are pushing forward
the large-scale solar power generation market
Installation volume in the U.S. in 2014 was 6.2GW on a single year
basis; achieved 18.3GW on a cumulative basis<Europe>The solar power generation market contracted slightly in 2014 due
the successive shrinking and termination of policy support measures;
From 2015, the market is expected to enter a growth trend on the backof a recovery in demand after four years

Disclaimer
This material is supplied to provide information of Tokuyama and its Group
companies, and is not intended as a solicitation for investment or other actions.

This material has been prepared based on the information currently available andinvolves uncertainties. Tokuyama and its Group companies accept no liability inrelation to the accuracy and completeness of the information contained in thismaterial.
Tokuyama and its Group companies assume no responsibility whatever for any
losses or deficits resulting from investment decisions based entirely on projections,numerical targets and other information contained in this material.

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