TOKYO OHKA KOGYO CO., LTD.
Business Results― The 1st Half of Fiscal Year ending Dec. 2019―Aug. 8, 2019TOKYO OHKA KOGYO CO., LTD.

© 2019 TOKYO OHKA KOGYO CO., LTD.

Contents

1. Consolidated Business Results forthe 1st Half of FY2019 (2019.1-2019.6)

p.02

2. Consolidated Performance Forecasts for
FY2019 (2019.1-2019.12)

p.13

3. Initiatives under TOK Medium-Term Plan 2021

p.21

© 2019 TOKYO OHKA KOGYO CO., LTD.

Consolidated Business Results
for the 1st Half of FY2019© 2019 TOKYO OHKA KOGYO CO., LTD.

Summary03（Millions of yen）

FY2018/121H

FY2019/12 1H

Change%Net sales

50,748 48,932(1,815)(3.6)

Operating income

4,674

4,428(246)(5.3)

Ordinary income

4,675

4,407(268)(5.7)

Profit attributableto owners of parent

3,210

2,924(286)(8.9)■Average exchange rate (US$)︓¥107.6／$（FY2018/12 1H）⇒¥109.0／$（FY2019/12 1H)■Net sales︓
Decreased year on year due to a downward trend in semiconductor demand.
■Operating income︓Decreased 5.3% year on year due to a decrease in sales.
■Profit attributable to owners of parent︓Decreased 8.9% year on year partly due to a decrease in operating income.
© 2019 TOKYO OHKA KOGYO CO., LTD.

Non-operating Expenses or Income/Extraordinary Losses or Income

04（Millions of yen）

FY2018/121H

FY2019/121H

1(20)

（21)

Interest and dividend income+193+224+30(Foreign exchange related losses/gains)

(121)
(514)
+392(186)(471)+284（64)+43(107)

Extraordinary losses or Income

(64)

(27)

+36

Gain on sale of fixed assets+3+19+16(68)

(46)

+21

Non-operating Expenses or income

Foreign exchange (loss) gain
Loss(gain) on valuation of derivatives

Loss on sales and retirement ofnoncurrent assets

YoY© 2019 TOKYO OHKA KOGYO CO., LTD.

Results by Business Segment

05（Millions of yen）

FY2019/12 1H

FY2018/12
1H

Change%50,74848,932(1,815)(3.6)

49,686

47,791(1,895)(3.8)

Electronic
functional materials

27,814

27,847+33+0.1

High purity
chemicals

21,81819,903(1,914)

(8.8)

53

40

(13)

(24.7)

1,061

1,141+79

+7.5

4,674

4,428(246)(5.3)

Material business

6,656

6,423（233)(3.5)

Equipment business

(321)

(270)

+50－(1,661)(1,724)(63)－Net sales
Material business

OtherEquipment business
Operating income

Eliminations andcorporate

Note: Effective January 1, 2019, TOK changed the cost allocation method to evaluate and manage financial results by business segment
more appropriately, and part of corporate expenses was allocated to Material Business. Following this change, the year-on-yearcomparison is conducted using the figures reclassified under the new allocation method.
© 2019 TOKYO OHKA KOGYO CO., LTD.

Breakdown of the Charge in Operating Income(Material Business)06

1st Half of FY2018/12 Result v.s. 1st Half of FY2019/12 Result
Impact of exchange rate changes
anddiscounted selling prices(¥0.7billions)Improvement inproduct mix＋¥0.7billions

Expenses increase(¥0.2billions)¥6.6¥6.4billions

billions

1st Half ofFY2018/12Result

1st Half ofFY2019/12Result(¥0.2billions)© 2019 TOKYO OHKA KOGYO CO., LTD.

Sales Breakdown of Material Business
30,00025,00020,00024,396
17

10,66925,29035

11,14926,241

26,6931030

Net Sales（Millions of yen）
23,48024

11,01507

24,311
15

10,898
9,906

9,997

15,00010,0005,000
013,709

14,105

18/12 Q1

18/12 Q2

15,21415,764

18/12 Q3

18/12 Q4

Electronic functional materials

13,54914,298

19/12 Q1

19/12 Q2

High purity chemicals

Other© 2019 TOKYO OHKA KOGYO CO., LTD.

Electronic Functional Materials Division
Sales Composition of Electric Function
Materials by Type
Other

High-density 8% g+i

16%integration*

Sales Composition of Semiconductor
Photoresist by Region

Semiconductor
Photoresist

FY2018/12 KrF
1st Half
Result 26%
10%

ArF

High-density
integration*

17%

LCD
10%

8%

g+i
15%

*Sales composition ofsemiconductor
photoresist by region
includes EUV.

23%
FY2018/12
1st Half
North America
Korea,Result 14%
Taiwan40%

LCD

OtherJapan
23%

Other

16%

24%

08

Semiconductor
Photoresist

Other
23%

Japan
25%

FY2019/12
1st Half
North
ResultKorea,
America
Taiwan13%

FY2019/12
KrF
1st Half
28%
Result* EUV is included in others.
39%* High-density integration︓
Resist for Packaging,
22%
MEMS Materials※Regional segmentation has been changed from current
term. “Other” includes Europe and Asia including China but © 2019 TOKYO OHKA KOGYO CO., LTD.
excluding Korea and Taiwan.

ArF

Equipment BusinessNet sales/Order backlog（Millions of yen）
2,500

09

Net sales

Order backlog

1,976

2,000

1,594
1,500

1,530
1,141

1,061

1,224

1,0005000

2018/12 1H

2018/12 2H

2019/12 1H(Millions of yen）

2018/12 1H

2018/12 2H

2019/12 1HYear-endorder backlog

2,291

2,472

2,757© 2019 TOKYO OHKA KOGYO CO., LTD.

Capital Investments/Depreciation/R&D

10(Millions of yen)

FY2019/12 1H

FY2018/121H

Change%Capital Investments

2,045

9,068+7,022+343.4

Depreciation

3,532

3,546+13+0.4

R&D

4,098

4,383+285+7.0© 2019 TOKYO OHKA KOGYO CO., LTD.

Balance Sheets

11（Million of yen）Buildings and structures(732)
Machinery(1,784)
Furniture and fixtures(302)
Land(141)
Construction in progress+7,625Retained earnings+374
Treasury stock+115
Unrealized gain on
available–for-salesecurities+220
Foreign currencytranslation adjustments(1,221)© 2019 TOKYO OHKA KOGYO CO., LTD.

Cash Flows

12（Millions of yen）
FY2018/12
1H

FY2019/12
1H

Cash flows from operating activities+7,693+5,205

Income before income taxes andminority interests+4,611+4,379Depreciation+3,532+3,546

Decrease (increase) in trade notes
and accounts receivable+829+1,307

Decrease (increase) in inventories(496)(1,707)

Decrease (increase) in trade notes
and accounts payable(321)(1,648)

Increase (decrease) in advances
received+95+265(1,014)(1,158)Cash flows from investing activities(4,225)(5,873)

Cash flows from financing activities+5,807(3,247)

(686)

(699)

+8,587(4,615)

Income taxes paid

Translation adjustments
Net increase (decrease) in cash andcash equivalents

Major breakdown
Purchases of property,
plant and equipment(4,529)Major breakdown
Proceeds from salesof treasury stock+51
Dividends paid(3,267)(incl. minority shareholders)© 2019 TOKYO OHKA KOGYO CO., LTD.

Consolidated Performance
Forecasts for FY2019(2019.1-2019.12)© 2019 TOKYO OHKA KOGYO CO., LTD.

Earnings Forecasts (Full-year)

14（Millions of yen）

FY2019/12 Forecasts

FY2018/12

Change%Net sales

105,277

100,500(4,777)(4.5)

Operating income

10,5058,300(2,205)(21.0)

Ordinary income

10,7348,500(2,234)(20.8)

Profit attributable toowners of parent

6,875

4,900(1,975)(28.7)■Exchange rate assumptions（US$）︓¥109.5／$（2018/12）⇒ ¥ 105.0 ／$（2019/12 2H）■Net sales :Will decrease 4.5% year on year based on the 1st half results although Material
Business expects a gradual recovery in semiconductor materials.
■Operating in come :Will decrease 21.0% year on year due to a decrease in sales of Material Business.
■Profit attributable to owners of parent :Will decrease 28.7% year on year due to a decrease in operating income.
© 2019 TOKYO OHKA KOGYO CO., LTD.

Performance Forecasts by Business Segment

15（Millions of yen)

FY2018/12

FY2019 /12 Forecasts
Change%105,277100,500(4,777)(4.5)

102,62196,600(6,021)(5.9)

Electronic functional
materials

58,79355,700(3,093)(5.3)

High purity chemicals

43,73340,800(2,933)

(6.7)

2,655

3,900

+1,244+46.9

10,5058,300(2,205)(21.0)

14,765

12,200(2,565)(17.4)

(883)

(400)

+483

－

(3,376)(3,500)(123)－

Net sales
Material business

Equipment business
Operating income
Material business
Equipment businessEliminations and corporate

Note: Effective January 1, 2019, TOK changed the cost allocation method to evaluate and manage financial results bybusiness segment more appropriately, and part of corporate expenses was allocated to Material Business. Following
this change, the year-on-year comparison is conducted using the figures reclassified under the new allocation method.

© 2019 TOKYO OHKA KOGYO CO., LTD.

Capital Investments/Depreciation/R&D

16(Millions of yen)

FY2018/12

FY2019/12 Forecast
Change%Capital Investments

5,636 16,700 +11,063+196.3

Depreciation

7,063

7,500+436+6.2

R&D

8,526

9,000+473+5.6© 2019 TOKYO OHKA KOGYO CO., LTD.

Breakdown of the Charge in Operating Income(Material Business)

17

FY2018/12 Result v.s. FY2019/12 Forecast
Impact ofsales decreases, etc(¥0.1 billions)
Expenses increase(¥0.0 billions)¥14.8

Impact of Exchange rate changes
and discounted selling prices(¥2.5 billions)¥12.2billions

billions

FY2018/12Result(¥2.6billions)

FY2019/12Forecast© 2019 TOKYO OHKA KOGYO CO., LTD.

Sales Breakdown of Material Business (Forecast)18
60,00050,86247,38550,0004786

40,00049,68653

21,536

21,81827,66929,277

27,814

17/12 1H

17/12 2H

18/12 1H

Simulation

Simulation

19,629Net Sales（Millions of yen）52,934

47,791

41

40
21,914

48,80859

19,903

20,896

27,847

27,852

19/12 1H

19/12 2H

30,00020,00010,0000Electronic Functional Materials

30,978

18/12 2H

High purity chemicals

Other© 2019 TOKYO OHKA KOGYO CO., LTD.

Electronic Functional Materials Division
Sales Composition of Electric Function
Materials by Type
Other

Semiconductor
Photoresist

g+iHigh-density 9%15%
integration*
17%

LCD

10%

FY2018/12 KrF
ResultArF
23%

High-density
integration*

LCD

9%

Other
23%

*Sales composition ofsemiconductorJapanphotoresist by region
23%
includes EUV.

ResultKorea,TaiwanSemiconductor
40%
Photoresist

Other

17%

Sales Composition of Semiconductor
Photoresist by Region

FY2018/1226%

9% g+i15%

FY2019/12 KrF
Forecast 28%ArF
22%

19

North America
14%

Other
24%

Korea,Taiwan

Japan

FY2018/12
Forecast

25%
North
America
14%* EUV is included in others.
37%* High-density integration︓
Resist for Packaging,
MEMS Materials※Regional segmentation has been changed from current
term. “Other” includes Europe and Asia including China but© 2019 TOKYO OHKA KOGYO CO., LTD.
excluding Korea and Taiwan.

Appendix︓
20
Sales Breakdown of Material Business by Region(Forecast)
Net Sales（Millions of yen）

60,00050,00040,00030,00047,385
6,399

24,82850,862
6,972

27,05349,686
7,792

25,83152,934
8,056

27,16347,791

48,808

7,712

7,987

24,06824,131

20,00010,0000

Other

Korea,Taiwan
North

4,727

4,813

4,996

5,704

11,42912,023

11,066

17/12 1H

17/12 2H

18/12 1H

Simulation

Simulation

5,121

5,578

12,01010,88911,11018/12 2H

19/12 1H

19/12 2H

AmericaJapan

Note : “Other” includes Europe and Asia including China but excluding South Korea and Taiwan.
© 2019 TOKYO OHKA KOGYO CO., LTD.

Initiatives in
TOK Medium-Term Plan 2021

© 2019 TOKYO OHKA KOGYO CO., LTD.

Features of the TOK Medium-Term Plan 2021

22

1. Strengthen business portfolio reforms-Ambitiously develop the technologies required by 5G, IoT & Innovation.

2. Return to a growth trajectory-Operating income target: 15.0 billion to 20.5 billion yen
Operating income(Fiscal year ending December 31, 2021)

3. Strengthen balance sheet management
and introduce a new dividend policy～20.515.0-A new dividend policy targeting adividend on equity ratio (DOE) of 3.5%.
-Flexibly conduct share buyback as ameans of returning profits to12.4

shareholders.

FY16/3Result（Billions of yen）

13.2

10.5

FY18/12

FY21/12

Record2018 Result New Target （FY15/3）© 2019 TOKYO OHKA KOGYO CO., LTD.

Initiatives in business portfolio reforms

23

5G・IoT&Innovation
Logic/Memory

Power devices

Higher capacity/ Higher processing speed/ Lower power consumptionMore Moore
・EUV︓Logic /DRAM

More than Moore
・3D-NAND・FO WLP/PLP

Semiconductor photoresist
︓EUV・ArF・KrF (Thick film)
Next-generation high purity chemicals ︓Clean Solution
Cutting-edge packages
︓Packaging photoresists,
MEMS materials,
3D packaging equipment

Core products-Aggressive development of the nextgeneration technologies.

-Enhancement of production capacities.

New Business- Light control materials
Optical sensor etc.

- Heat control materials- Life science-related materials

Lithium-ion batteries etc.

Bio-chip materials etc.
© 2019 TOKYO OHKA KOGYO CO., LTD.

Topics24

 EUV photoresists
Medium-Term Plan

- Obtain our qualified 3nm/5nm processaiming for our further growth after 2022.

- Qualified our EUV photoresists for
5nm process

 KrF photoresists
Medium-Term Plan

- Further multilayer stacking of 3D-NAND.
Address 9x-stacked to 1xx-stacked- Qualified our thick KrF photoresist
for 1xx-stacked 3D-NAND

 High purity chemicals
Medium-Term Plan

- Increasing demand for new products for
cutting-edge processes will drive sales
growth.
- Step up development of new Clean
Solution and new thinners for next-- Enhance production capacity ofClean Solution- Qualified our Surface Modifier

generation process.

© 2019 TOKYO OHKA KOGYO CO., LTD.

Advanced Surface Preparation

25

Strategically reinforce“Advanced Surface Preparation”
business among high purity chemicals-Advanced Surface Preparation is a high value-added product with abundantbusiness opportunities.

-Active promotion of global business development.

High puritychemicals

CleanSolution

Advanced Surface
Preparation

Surface
Modifier

Thinner

Other

Developer

Clean Solution

Surface Modifier© 2019 TOKYO OHKA KOGYO CO., LTD.

TOK’s Sustainable Value Creation Process 26
Capital Investment(Financial/Non-financial)
Equipment
BusinessNew
Material BusinessBusiness

Semiconductor market,
electronics components market and others

Value Delivered to Society
Promote technologicalinnovation by providing
cutting-edge materials

Realize safe, autonomousvehicle society with automotive
devices with high performanceand high reliabilityControl and reduce energy
consumption of various
equipment using
semiconductor technology

Improve productivity withhigher processing speed ofelectronic devices



Expand remote operations invarious industries and medicalfrontExtend healthy life spanswith advanced preventive
healthcare technologies

Enhance sustainable corporate value© 2019 TOKYO OHKA KOGYO CO., LTD.

27

Identification of Material Issues
Improve sustainable corporate value and create sharedvalue through efforts to contribute to achievement of SDGs
related to our material issues
 Development and provision of high value-added
products that will contribute to innovation
Achieving SDGs


Enhancement ofpersonnel measuresEnvironmental
protection

Occupational
health andsafety/security anddisaster preventionChemical
substance
management

 Enhancement of corporate governance© 2019 TOKYO OHKA KOGYO CO., LTD.

Explore New Technologies andEnhance Technological Capabilities
to Meet Social Expectations withChemicals for a Sustainable Earth© 2019 TOKYO OHKA KOGYO CO., LTD.

https://www.tok.co.jp/eng(Note)
This presentation material contains forward-looking statements that
describe future prospects of TOKYO OHKA KOGYO CO., LTD. (theCompany) in terms of business planning, earnings and management
strategies. Such statements are based on management’s judgement,
derived from information available to it at the time such information
was prepared. Readers are cautioned not to rely solely on theseforward-looking statements, as actual results and strategies may
differ substantially according to changes in the Company’s businessenvironment.

© 2019 TOKYO OHKA KOGYO CO., LTD.