April 27, 2018

Summary of Fiscal 2017
(The Fiscal Year ended March 31, 2018)
Tokuyama Corporation
1. Consolidation
Classification
The number of consolidated
subsidiaries
The number of subsidiaries andaffiliates by the equity method

Fiscal 2017

Fiscal 2016

Changes

49

51

(2)

10

10

-

2. Summary of performance and other corporate data (consolidated)(Unit: Billions of yen, except number of employees)
Fiscal 2017
Fiscal 2016
Changes
Net sales
308.0
299.1
+8.9
Operating profit
41.2
38.5
+2.7
Ordinary profit
36.1
33.9
+2.1
Profit 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
19.6
52.1
(32.4)
Basic earnings per share (Unit: yen)259.81738.92(479. 11)
Capital expenditures
15.9
17.3
(1.4)
Depreciation and amortization
13.9
14.2
(0.2)
R&D expenses
7.9
7.5
+0.3
(3.2)
(3.9)
+0.6
Financial income and expenses* From fiscal 2017, the Company has changed its presentation method and, for the cumulative
consolidated accounting period of the fiscal 2016, has stated the reclassified numerical values.
* 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 is calculated on the assumption that theconsolidation of shares was conducted as of the beginning of fiscal 2016.

As of March 31,
2018
139.9
4,889

Interest-bearing debt
Number of employees

As of March 31,
2017
213.9
5,406

Changes(74.0)(517)

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

FY2017
Operating
Net sales
profit

FY2016
Operating
Net sales
profitChanges
Operating
Net sales
profitChemicals

93.5

16.1

83.3

12.9

+10.2

+3.1

Specialty Products

58.6

11.0

67.7

9.2

(9.0)

+1.7

Cement

87.3

4.5

82.9

7.5

+4.3

(2.9)

Life & Amenity

51.5

3.7

50.7

5.3

+0.8

(1.6)

Others

54.5

6.2

52.1

5.9

+2.4

+0.2

Total

345.6

41.6

336.9

41.1

+8.7

+0.5

Inter-segment
eliminations andcorporate-wide expenses(37.6)(0.4)(37.8)

(2.5)

+0.2

+2.1

Consolidated results

308.0

41.2

299.1

38.5

+8.9

+2.7

1

○ In the Chemicals segment, both sales and operating profit increased due to an increase in thesales volume and the revision of selling prices.
○ In the Specialty Products segment, operating profit was up despite a downturn in sales during
the fiscal year under review. This was largely attributable to removal of Tokuyama Malaysia Sdn.
Bhd. from the Company’s scope of consolidation.
○ In the Cement segment, the Tokuyama Group reported lower operating profit on higher sales.
Domestic sales increased at Tokyo and the other areas, and the volume of exports increased.
Meanwhile, manufacturing costs increased due to a rise in raw material prices such as coal.
○ In the Life & Amenity segment, the Tokuyama Group reported lower operating profit on higher
sales. With regard to dental materials and ion exchange membranes, sales increased
compared with the previous fiscal year. Meanwhile, manufacturing costs increased.

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)

FY2018 Forecast
Operating
Net sales
profit

FY2017 Results
Operating
Net sales
profitChanges
Operating
Net sales
profitChemicals

102.0

18.0

93.5

16.1

+8.4

+1.8

Specialty Products

63.0

11.0

58.6

11.0

+4.3

(0.0)

Cement

93.0

4.5

87.3

4.5

+5.6

(0.0)

Life & Amenity

56.0

3.0

51.5

3.7

+4.4

(0.7)

Others

54.0

3.5

54.5

6.2

(0.5)

(2.7)

Total

368.0

40.0

345.6

41.6

+22.3

(1.6)

Inter-segment
eliminations andcorporate-wide expenses(40.0)(2.0)(37.6)

(0.4)

(2.3)

(1.5)

Consolidated results

328.0

38.0

308.0

41.2

+19.9

(3.2)

(2) Assumptions of performance forecasts for fiscal 2018

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

Fiscal 2018

Fiscal 2017

48,00041,900

110

111

The Tokuyama Group is projecting an increase in sales and a decrease in operating profit in the fiscal
2018. Expectations of a decrease in operating profit are largely based on upward trend in raw material
and fuel costs.

2

○ In the Chemicals segment, the Group has taken into account the revision of selling prices inline with the increase in domestic naphtha prices.
○ In the Specialty Products segment, the Group has taken into account an increase in sales ofsemiconductor-related materials as well as an increase in raw material and fuel costs.
○ In the Cement segment, the Group has factored the revision of selling prices as well as anincrease in raw material and fuel costs mainly due to the surge in coal price.
○ In the Life & Amenity segment, the Group has taken into account an increase in sales inoverseas markets.

3Summary of Consolidated Financial Statements for Fiscal 2017 (JP GAAP)(The Fiscal Year ended March 31, 2018)
April 27, 2018
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 22, 2018
Scheduled date of year-end dividends payout:
June 25, 2018
Scheduled date for the filing of the consolidated financial statements: June 25, 2018
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, 2018 (April 1, 2017 – March 31, 2018)
Note: All amounts are rounded down to the nearest million yen.
% indicates year-on-year changes.

(1) Performance

Net sales

Operating profit(millions of yen)

Fiscal 2017
Fiscal 2016

308,061
299,106

[%]

3.0
(2.6)

(millions of yen)

41,26838,533(Note) Comprehensive income: FY17: 27,436 million yen [(49.7)%]

Profit attributable toowners of parent

Ordinary profit
[%]

7.1
67.0

(millions of yen)

36,19633,998[%](millions of yen)

6.5
91.8

19,69852,165

FY16: 54,562 million yen [－%][%]

(62.2)－

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

Fiscal 2017
Fiscal 2016

259.81738.92

(yen)

[%]

－
599.66

[%]

15.6
58.5

9.2
8.2

[%]

13.4
12.9

(Reference) Equity in earnings of unconsolidated subsidiaries and affiliates: FY17: 957 million yen FY16: 900 million yen* From the fiscal year ending March 31, 2018, the Company has changed its presentation method and, for the consolidated accounting period of
the fiscal year ended March 31, 2017, has stated the reclassified numerical values and the rate of change from the previous fiscal year after
having retroactively applied the appropriate presentation method.
* 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 and diluted earnings per share data are calculated on the assumption that the consolidation of shares was conducted as of the
beginning of the preceding fiscal year.
* Earnings per share data for each of fiscal 2016 and fiscal 2017 are calculated by dividing the applicable amount after deducting profit not
attributable to common stock from profit attributable to owners of parent (the amount of Class A share call premium redemption or the amountof Class A daily prorated unpaid dividends) by the average number of shares of common stock over the period.

(2) Financial position

Total assets
Mar 31, 2018
Mar 31, 2017

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

361,949
424,433

136,591
135,976

Shareholders’ equity
ratio
[%]

34.7
29.9

Net assets per share(yen)

1,806.56
1,527.42(Reference) Shareholders' equity:
FY17:
125,656 million yen
FY16:127,015 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, net
assets 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 2017
Fiscal 2016

Cash flows frominvesting activities(millions of yen)(millions of yen)

61,88520,012(12,665)(10,089)1

Cash flows fromfinancing activities(millions of yen)(101,209)(11,911)

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

66,807
118,819

2. Dividends（Period）

Annual dividens
3rd
Yearquarter quarter
end

1st

2nd

quarter
(yen)

Total

Total dividends
paid(Total)Dividend
payout ratio(Consolidated)

Dividend on net
assets ratio(Consolidated)(millions of yen)

[%]

[%]

(yen)

(yen)

(yen)

(yen)

Fiscal 2016

--

0.00

--

0.00

0.00

--

--

--

Fiscal 2017

--

2.00

--

20.00

--

2,086

11.5

1.8

-- 25.00

--

25.00

50.00

Fiscal 2018
（Forecast）(Note)

12.9* Dividends described above are the status of dividend related to common stock. As for the dividends related to class shares, please refer to“(Reference) Dividends for Class A shares” on page 4 of this Summary of Consolidated Financial Statement.
* 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 fiscal year ending March 31, 2018 is presented as the amount of dividend prior to share consolidation. The forecast
amount for the year-end dividend per share for the fiscal year ending March 31, 2018 is stated after taking into the account the impact of theshare consolidation. The annual dividend amount is presented as “-.” Meanwhile, the interim dividend per share for the 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 a 100th anniversary commemorative dividend.

3. Consolidated performance forecast for fiscal 2018 (April 1, 2018 – March 31, 2019)(% indicates the rate of change over the corresponding previous periods respectively)

Net sales

Fiscal 2018

(millions of
yen)

[%]

328,000

6.5

Operating profit

Ordinary profit

Profit attributable to Basic earnings pershareowners of parent(millions ofyen)(millions of
yen)

[%]

(millions of
yen)

[%]

34,000 (6.1)

27,000(37.1)[%]

38,000 (7.9)(yen)

388.15* 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 : Yes
Addition to the scope of consolidation: Reduction from the scope of consolidation: 1 (Company Name: Tokuyama Malaysia Sdn. Bhd.)(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:

FY17:69,934,375

FY16:

69,934,375

FY17:
FY17:

378,378
69,560,391

FY16:
FY16:

370,156
69,566,147* 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, numberof shares issued at end of period, number of treasury stock at end of period average number of shares over period data are calculated on theassumption 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, 2018 (April 1, 2017 – March 31, 2018)
Note: All amounts are rounded down to the nearest million yen.
% indicates year-on-year changes.

(1) Performance

Net sales

Operating profit(millions of yen)

Fiscal 2017
Fiscal 2016

188,501
173,055

[%]

8.9
(6.3)

Net profit per share(yen)

Fiscal 2017
Fiscal 2016

397.30447.83(millions of yen)

33,35932,220Ordinary profit

Net profit[%](millions of yen)

[%]

3.5
25.6

29,62829,745(0.4)
9.3(millions of yen)

29,262
31,915

[%]

(8.3)
－

Diluted net profit per
share
(yen)

－
366.88*From the fiscal year ending March 31, 2018, the Company has changed its presentation method and, for the consolidated accounting period of
the fiscal year ended March 31, 2017, has stated the reclassified numerical values and the rate of change from the previous fiscal year after
having retroactively applied the appropriate presentation method.
* 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, net
profit per share and diluted net profit per share data are calculated on the assumption that the consolidation of shares was conducted as of the
beginning of the preceding fiscal year.
* Net profit per share data for each of fiscal 2016 and fiscal 2017 are calculated by dividing the applicable amount after deducting profit not
attributable to common stock from net profit (the amount of Class A share call premium redemption or the amount of Class A daily prorated
unpaid dividends) by the average number of shares of common stock over the period.

(2) Financial position

Total assets
Mar 31, 2018
Mar 31, 2017

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

281,360
330,369

89,18482,064

Shareholders’ equity
ratio
[%]

31.7
24.8

Net assets per share(yen)

1,282.20
881.24(Reference) Shareholders' equity:
FY17:
89,184 million yen
FY16:
82,064 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, net
assets per share data is calculated on the assumption that the consolidation of shares was conducted as of the beginning of the preceding fiscal
year.

(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

(Reference) Dividends for Class A shares
Dividends per share related to class shares are as follows:
Annual dividends per share
Class A shares
1st quarter2nd quarter3rd quarter
Year-end(Period)
(yen)
(yen)
(yen)
(yen)
Fiscal 2016, ended―――
38,082.20
Mar 31, 2017
Fiscal 2017, ending―
Mar 31, 2018

Total

(yen)
38,082.20(Note) All of the Class A shares issued by the Company (total paid-in amount: 20 billion yen) have been acquired andcancelled on June 14, 2017.

4

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. 12

(3) Progress under the Medium-Term Management Plan

……………

P. 15

(4) Basic Policy for Profit Distribution and Dividends for Fiscal 2017 and 2018

……………

P. 15

3. Consolidated Financial Statements

……………

P. 16

(1) Consolidated Balance Sheets

……………

P. 16

(2) Consolidated Statements of Income

……………

P. 18

(3) Consolidated Statements of Comprehensive Income

……………

P. 19

(4) Consolidated Satetements of Cash Flows

……………

P. 20

(5) Segment Information

……………

P. 22

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 lost-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
The Tokuyama Group is focused on rebuilding its financial platform as a first step toward its revitalization.
In addition to completing the transfer of Tokuyama Malaysia Sdn. Bhd., the Group has undertaken suchmeasures as the redemption of Class A shares.
Recognizing the significant deterioration in our operations due to impairment losses of Tokuyama
Malaysia’s business since 2014, we remain committed to strengthening our financial platform, improving
our corporate governance structure and systems, and clarifying the direction of business strategies as a partof efforts to make the most of lessons learned. Moving forward, we will work diligently to create thenecessary driving force to propel new profit growth. In order to overcome each of these issues, we will
steadfastly carry out the priority measures set out in our current medium-term management plan andreform both management and the Group’s operations in a bid to secure renewed growth.
1. Change its organizational climate
Recognizing the need to promote an environment in which key positions take the initiative to foster avibrant corporate culture that encourages independent thinking and rapid business execution among
employees, we adopted a new performance-based personnel system for management and employees over
the age of 60. Looking ahead, we plan to expand this system to all employees. In order to incorporate
fresh perspectives in the Group’s business promotion activities, we will also actively recruit outside
personnel with specialized skills and a wealth of experience as a part of our human resources development
system.
2. Rebuild its business strategies
In order to realize the aspirations of becoming a leader in its traditional businesses in Japan and a global
leader in advanced materials identified under its Medium-Term Management Plan, Tokuyama will
strengthen the competitiveness of each business utilizing ICT and accelerate the pace of overseas businessdevelopment.
In addition, steps will be taken to introduce a new business evaluation system that focuses on capitalefficiency and to optimize the business portfolio.
As far as research and development is concerned, we will rebuild our R&D structure so that it is more intune with customers’ needs and cultivate new business domains by implementing open innovation withother companies.
3. Strengthen Group management
In order to fully capitalize on synergies within the Tokuyama Group, every effort was made to accelerate
the pace of sales strategies with strong support for a human resource perspective and management
decision-making based on flexible capital policies. As a result, reform of the Group as a whole will also
gather pace. In addition to applying the new business evaluation system to consolidated subsidiaries andclarifying the degree of contribution to enhancing corporate value, we will work to reinforce internal
control at Group companies.

34. Improve its financial structure
Steps were taken to execute an unsecured bond trust-type debt assumption agreement, undertake therepayment in advance of loan agreements with financial covenants, and reduce interest-bearing debt inorder to quickly stabilize the Company’s financial position. Moving forward, Tokuyama will continue toreduce interest-bearing debt while working to enhance its shareholders’ equity by building up profits forthe period.

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 2017 (April 1, 2017 to March 31, 2018), the momentum of recovery across the global economy
gathered strength. This was largely due to an upswing in investment in developed countries, smartphone
penetration and growth in emerging nations, increased application of information technology in theautomobile, home appliance, and other sectors, and growing use of IoT and big data.
As far as the Japanese economy is concerned, export and manufacturing activities continued to improve withcorporate earnings reaching record highs. In addition to improvements in employment and disposable income
conditions, domestic demand also exhibited signs of a recovery on the back of such factors as personal
consumption and private-sector capital investment. Taking the aforementioned into consideration, Japanadvanced toward a positive economic cycle.
Under these circumstances, the Tokuyama Group continued to implement the priority measures identified in
its Medium-Term Management Plan.
As a result, despite increases in raw material and fuel costs including coal and naphtha, Tokuyama benefitted
from such factors as an increase in sales volume and efforts to adjust selling prices. As a result, both net sales
and operating profit improved.

Net sales

Operating profit(Unit: Millions of yen)
Profit attributable toOrdinary profit
owners of parerent

Fiscal 2017308,061

41,26836,196

19,698

Fiscal 2016

299,106

38,53333,99852,165

3.0

7.1

6.5

(62.2)

Rate of change (%)

Net sales
Consolidated net sales increased 3.0%, or ¥8,954 million compared with the previous fiscal year, to¥308,061 million. This was largely attributable to an increased sales volume in major products such as
cement and revision in selling prices of caustic soda and petroleum products.
Cost of sales
Cost of sales increased 2.6%, or ¥5,222 million compared the previous fiscal year, to ¥207,715 million.
This was due mainly to an increase in raw material and fuel costs as a result of the surge in coal anddomestic naphtha prices.
SG&A expenses
SG&A expenses increased 1.7%, or ¥997 million compared with the previous fiscal year, to ¥59,077
million. This was largely attributable to the increase in logistics costs associated with the increased sales
volumes.
5Operating profit
Operating profit increased 7.1%, or ¥2,735 million compared with the previous fiscal year, to ¥41,268
million. Despite an increase in fuel and raw material costs, this was due mainly to an increased sales volume
in major products and improved profitability with the effect of the revision in selling prices.
Non-operating income/expenses, Ordinary profit
Non-operating income/expenses deteriorated ¥537 million compared with the previous fiscal year.
As a result of the above, ordinary profit increased 6.5%, or ¥2,197 million compared with the previous
fiscal year, to ¥36,196 million.
Extraordinary income/losses, Profit before income taxes, Profit, Profit attributable to owners ofparentExtraordinary income/losses deteriorated by ¥7,827 million compared with the previous fiscal year. This
was largely attributable to the posting of a loss on transfer of business due to the completion of transfer
of Tokuyama Malaysia Sdn. Bhd.
As a result of the above, profit before income taxes decreased 14.6%, or ¥5,630 million compared with theprevious fiscal year, to ¥32,895 million.
Profit after deducting income taxes calculated in an appropriate way decreased 52.5%, or ¥28,015 million
compared with the previous fiscal year, to ¥25,381 million.
Profit attributable to owners of parent decreased 62.2%, or ¥32,467 million compared with the previous
fiscal year, to ¥19,698million.

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

51,57954,526345,676(37,615)

308,061

82,99550,751

52,124

336,943(37,836)

299,106

5.2

1.6

4.6

2.6

-

3.0

Chemicals

Specialty
Products

CementFiscal 2017

93,54658,67887,345

Fiscal 2016

83,34667,72612.2(13.4)

Rate of change (%)

Life &
Amenity

Operating profit(Unit: Millions of yen)
Reportable segment

41,691(422)

41,268

5,965

41,122(2,589)38,533

4.2

1.4

-

7.1

Others

Total

3,728

6,214

7,552

5,389

(39.5)(30.8)

Chemicals

Specialty
Products

Fiscal 201716,175

11,003

4,568

Fiscal 2016

12,999

9,215

24.4

19.4

Rate of change (%)

Adjustment

Figures in
consolidated
incomestatementLife &
Amenity

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

Chemicals
Sales of caustic soda were up compared with the previous fiscal year both domestic sales and export
volumes increased due to the upward trend of Asian market, and the revision of selling prices was also
progressed.
Sales of vinyl chloride monomer (VCM) were up compared with the previous fiscal year. The volume ofexport mainly for Asian market increase and the selling prices were steady.
Sales of vinyl chloride resin increased. The revision of selling price was progressed.
As a result of the above, segment net sales increased 12.2% compared with the previous fiscal year, to¥93,546 million and operating profit increased 24.4% to ¥16,175 million. The segment reported higher
earnings on higher sales.

7Specialty Products
Sales of polycrystalline silicon decreased. Despite a robust sales volume of semiconductor-grade
polycrystalline silicon, this was primarily due to removal of Tokuyama Malaysia Sdn. Bhd. from theCompany’s scope of consolidation.
Sales of fumed silica increased compared with the previous fiscal year due to increased sales of suchapplications as a polishing material for semiconductors.
With regard to high-purity chemicals for electronics manufacturing, sales increased compared with theprevious fiscal year, mainly due to the robust sales volume in such applications as semiconductor
manufacturing.
With regard to thermal management material, sales increased compared with the previous fiscal year. This
was attributable to an increase in sales volumes of such applications used for semiconductor manufacturing
equipment.
As a result of the above, segment net sales decreased 13.4% compared with the previous fiscal year, to¥58,678 million and operating profit increased 19.4% to ¥11,003 million. The segment reported higher
earnings on lower sales.
CementSales of cement increased. While the construction of infrastructure related to Tokyo Olympic was
becoming more active, domestic sales increased at Tokyo and the other areas, and the volume of exports
increased on the back of robust demand in the Asia region. Meanwhile, manufacturing costs increased due
to a rise in raw material prices such as coal.
In the resource recycling business, despite the Company accepted a lower volume of waste, the waste
disposable fees increased compared with the previous fiscal year. As a result of this, sales was almost sameas the previous fiscal year.
Consolidated subsidiary net sales increased. This mainly reflected the robust shipping trends of suchproducts as ready-mixed concrete.
As a result of the above, segment net sales increased 5.2% compared with the previous fiscal year, to¥87,345 million and operating profit decreased 39.5% to ¥4,568 million. The segment reported lower
earnings on higher sales.
Life & Amenity
With regard to dental materials and equipment, sales increased compared with the previous fiscal year, due
to higher sales volumes of new products and an increase in the volume of export.
With regard to ion exchange membranes, sales were up compared with the previous fiscal year. This largely
reflected the increase of sales on large-scale projects compared with the previous fiscal year.
Sales of active pharmaceutical ingredients and intermediates decreased compared with the previous fiscal
year, owing mainly to the downswing in the sales volumes of generic pharmaceuticals.
With regard to microporous film, sales of such applications as sanitary articles including disposable diapers
8decreased at oversea subsidiaries. As a result of this, sales decreased compared with the previous fiscal year.
In gas sensors, Figaro Engineering Inc. was removed from the Company’s scope of consolidation effectivefrom the second quarter of the previous fiscal year. This reflected the transfer of a portion of thecompany’s shares.
As a result of the above, segment net sales increased 1.6% compared with the previous fiscal year, to¥ 51,579 million and operating profit decreased 30.8% to ¥ 3,728 million. The segment reported lower
earnings on higher sales.

9<2> Outlook for fiscal 2018
[1] Outlook for operating results
In fiscal 2018 (April 1, 2018 to March 31, 2019), there are concerns that such factors as growing trade
restrictions and geopolitical tension will negatively impact the global economy. Despite these concerns, we
expect the modest recovery in the U.S. economy will continue as improvements in the employment anddisposable income environments help maintain firm personal consumption. This will allow the U.S. todrive the global economy forward along an ongoing recovery path. On the domestic front, we anticipate
that Olympic-related investments as well as expenditures aimed at improving productivity will continue
unabated. Personal consumption is forecast to remain firm on the back of wage increases mainly by small
and medium-sized companies. As a result, we expect the Japanese economy will show signs of ongoingmodest expansion. In contrast, there are concerns that rising raw material costs attributable to an upswing
in international product market conditions as well as the effects of the strong yen on export activity will
have a negative impact on the domestic environment.
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 ¥328.0 billion, an increase of 6.5% (¥19.9
billion) compared with the fiscal year under review, operating profit of ¥38.0 billion, a decrease of 7.9%(¥3.2 billion), ordinary profit of ¥34.0 billion, down 6.1% (¥2.1 billion) and profit attributable to ownersof parerent of ¥27.0 billion, a increase of 37.1% (¥7.3 billion).
Net sales

Operating profit(Unit: Millions of yen)
Profit attributable toOrdinary profit
owners of parerent
34,00027,000Fiscal 2018

328,000

38,000Fiscal 2017308,061

41,26836,196

19,698

6.5

(7.9)

(6.1)

37.1

Rate of change (%)

These forecasts are calculated based on an exchange rate of ¥110/$ and a domestic naphtha price of¥48,000/kl.
[2] Outlook for segment results for fiscal 2018
Chemicals
While trends in sales volumes, and especially of caustic soda, are expected to remain firm against the
backdrop of robust demand in the Asia region, raw material and fuel costs are projected to continue toincrease. On this basis, we anticipate significant risk of ongoing fluctuation in the earnings environment.
Under this operating environment, the Tokuyama Group will work to transfer the increase in raw material
and fuel costs to selling prices, and strengthen its cost competitiveness including its unit consumption of
raw marerials and energy as well as the efficiency of its fixed costs. Every effort will be made to securestable earnings.
10

Specialty Products
The semiconductor market is expected to remain robust. In line with the trend toward an IoT society andminiaturization, customers’ demand for higher levels of quality and stable supply is increasingly expanding.
Under these circumstances, the Tokuyama Group will endeavor to adhere strictly to a policy of cost
reduction while urgently increasing the quality of its semiconductor-related products including
semiconductor-grade polycrystalline silicon and putting in place a production structure that is capable ofmeeting demand, thereby securing earnings. In addition, the Group will look to boost earnings by pursuing
the higher qulity and expanding sales of high-value-added products which are cleary differenciated fromother companies’ products..
CementPrivate-sector demand in Japan is projected to continue its strong upward trend on the back of efforts toredevelop the Tokyo area, construction work relating to the 2020 Tokyo Olympics, and other factors.
Public-sector demand, on the other hand, is expected to stay at around the same level as the previous fiscal
year. Taking these factors into consideration, overall demand in Japan is anticipated generally flat. 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. Against this backdrop, the Tokuyama Group will place particularemphasis on developing and marketing products that address customers’ needs and changes in the market
while working to expand earnings.
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.

11

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

Mar 31, 2017

Mar 31, 2018

Ammount ofRate of changechange(%)

Assets424,433

361,949(62,483)（14.7）

Liabilities

288,457

225,357(63,099)(21.9)（Interest-bearing debt）

213,955

139,917(74,037)(34.6)Net assets

135,976

136,591615

0.5（Shareholders' equity）

127,015

125,656(1,359)(1.1)

Mar 31, 2017

Mar 31, 2018

Ammount of

Financial indicatorschangeD/E ratio

1.68

1.11

(0.57)Net D/E ratio

0.73

0.58

(0.15)

Shareholders’ equity ratio (%)

29.9

34.7

4.8 points

Shareholders’ equity ratio based on market price (%)

44.1

65.1

21.0 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)
Regarding current assets, a rise in the execution of a trust-type debt assumption agreement (debtassumption agreement) with a bank and repayments in advance of long-term loans payable caused adecrease of ¥54,369 million in cash and cash equivalents (including marketable securities). Due mainly tothe removal of Tokuyama Malaysia Sdn. Bhd. from the consolidation, property, plant and equipment
decreased by ¥8,991million.
As a result, total assets amounted to ¥361,949 million, down ¥62,483 million compared with those as ofMarch 31, 2017. Due to the removal of Tokuyama Malaysia Sdn. Bhd. from the consolidation, assets
decreased by ¥20,522 million.

(Liabilities)
Tokuyama has promoted to reduce interest-bearing in order to improve its financial structure under its
Medium-Term Management Plan. The principal factors are a decrease in bonds payable of ¥34,400
million following the execution of a debt assumption agreement with a bank , and a decrease in long-termloans payable and current portion of long-term loans payable of ¥40,585 million owing mainly to normalscheduled repayment together with repayments in advance.
As a result, total liabilities amounted to ¥225,357 million, down ¥63,099 million compared with those asof March 31, 2017. Due to the removal of Tokuyama Malaysia Sdn. Bhd. from the consolidation, liabilities
decreased by ¥4,512 million.
12

(Net assets)
Despite the decrease of shareholders’ equity of ¥22,387 million due to the payment of dividend for ClassA shares and acquisition and cancellation of Class A shares, this mainly reflected an increase in retained
earnings of ¥19,698 million as a result of posting profit attributable to owners of parent.
As a result, net assets totaled ¥136,591 million, an increase of ¥615 million compared with those as ofMarch 31, 2017.

(Financial indicators)
Tokuyama has identified a D/E ratio of not more than 1.0 in fiscal 2020 as one of its numerical targets
under its Medium-Term Management Plan. As previously mentioned, the Company cutback its
interest-bearing debt by ¥74,037 million on the back of vigorous reduction measures in the fiscal year
under review. As a result, the D/E ratio improved 0.57 compared with the end of the previous fiscal year,
to 1.11 times.
Moving forward, Tokuyama will continue to improve its D/E ratio from the next fiscal year.

<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

20,012

61,885

Cash flows from investing activities(10,089)(12,665)

Cash flows from financing activities(11,911)(101,209)

(358)

(23)

Net increase (decrease) in cash and cash equivalents(2,346)(52,012)

Cash and cash equivalents at end of year

118,819

66,807

Effect of exchange rate changes on cash and cash equivalents(Cash flows from operating activities)
Net cash provided by operating activities totaled ¥61,885 million, a increase of ¥41,872 million comparedwith the previous fiscal year. Principal items included profit before income tax of ¥32,895 million anddepreciation of ¥13,985 million.
(Cash flows from investing activities)
Net cash used in investing activities totaled ¥12,665 million, an increase of ¥2,576 million compared withthe previous fiscal year.
Major contributory factors were payments for purchases of property, plant and equipment of ¥15,526
million and proceeds from sales of shares of subsidiaries resulting in change in scope of consolidation of¥5,362 million.

13

(Cash flows from financing activities)
Net cash used in financing activities amounted to ¥101,209 million, an increase of ¥89,298 million
compared with the previous fiscal year.
This was primarily attributed to repayment of long-term loans payable owing mainly to normal scheduled
repayment together with repayments in advance, redemption of bonds and payments for acquisition ofshares such as Class A shares, of ¥50,384 million, ¥36,014 million, and ¥21,650 million, respectively.
<2> 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
targets, the Group is endeavoring to acquire a “single A” rating from relevant agencies by the end of theMedium-Term Management Plan. Based on the aforementioned, the Tokuyama Group reduced
interest-bearing debt by ¥74.0 billion and improved its financial structure.
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 ¥21.1 billion. Plans are in place to utilize cash on hand and borrowings from financial
institutions.
(Liquidity)
Cash and cash equivalents stood at ¥66.8 billion as of the end of the fiscal year under review. On this basis,
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.

14

(3) Progress under the Medium-Term Management Plan
ROA (operating profit/total assets) came in at 10.5%, surpassing the numerical target of 10% set under the
Medium-Term Management Plan. In addition to the increase in operating profit, this improvement in the
Company’s ROA largely reflected the contraction in total assets as a result of such factors as the decrease in
cash and deposits following the execution of an unsecured bond debt assumption agreement and therepayment of long-term loans payable. The Company’s cash conversion cycle (CCC) improved six days
compared with the previous fiscal year, to 62 days. This was largely attributable to the contraction ininventory and changes in the trading terms and conditions of certain purchased products. Tokuyama’s
D/E ratio also came in at 1.11, an improvement of 0.57 compared with the previous fiscal year. This was
mainly due to the accumulation of profits and cutbacks in interest-bearing debt.

(4) Basic Policy for Profit Distribution and Dividends for Fiscal 2017 and 2018
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 2017, the Company expects to pay out a year-end dividend of ¥10 per share in line with the basic
policy mentioned above. In addition, the Company determined to conduct 100th anniversarycommemorative dividend of ¥10 per share.
Turning to dividends for fiscal 2018, the Company intends to undertake the payment of an interim andyear-end dividend of ¥25 per share respectively.

15

3. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of yen)
3/31/2018

3/31/2017
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Lease receivables
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
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
Net defined benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

16

121,598
73,945
6－
12,348
9,919
16,567
1,627
10,798△150
246,661

57,22979,66028
10,00014,028
10,075
15,327
6,620
4,809
△127
197,652

100,430△72,723
27,707450,926△404,912
46,01422,015△20,222
1,793
31,2893,533△1,3292,203
10,225
119,233

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

2,367
35
2,384
4,787

1,158
51
1,556
2,766

19,083
2,833
19,824
8,936
3,221
△148
53,750177,771424,433

24,302
2,627
11,680
9,657
3,162
△141
51,287
164,297
361,949

3/31/2017
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Income taxes payable
Deferred tax liabilities
Provision for bonuses
Provision for repairs
Provision for product warranties
Provision for loss on purchase contract
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable
Lease obligations
Deferred tax liabilities
Provision for directors' retirement benefits
Provision for repairs
Allowance for loss on compensation for building materials
Provision for environmental measures
Net defined 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

17(Millions of yen)
3/31/2018

37,0352,138
15,235
577
1,335
－
2,103
1,628
81
2,671
16,346
79,15347,6102,549
15,684
641
3,688
0
2,557
4,332
98
－
15,87093,032

34,400160,555
1,787
268
143
2,829
318
287
1,430
6
7,275
209,303
288,457－
119,521
1,521
298
143
1,594
261
253
1,527
5
7,197
132,325
225,357

10,00041,54572,511△1,446
122,609

10,00020,00890,752△1,472
119,288

319
△274
1,528
2,833
4,406
8,960
135,976
424,433

1,352
△151
2,093
3,074
6,368
10,935
136,591
361,949

(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
Compensation income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on bond retirement
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on sales of shares of subsidiaries and associates
Compensation income for damage
Subsidy income
Gain on insurance adjustment
Gain on write-off debts
Gain on sales of patent right and otherSettlement received
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
Loss on transfer of business
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
18
Profit attributable to owners of parent

FY2016299,106
202,492
96,613(Millions of yen)
FY2017
308,061
207,715
100,346

37,916
20,16458,08038,53339,26819,80959,07741,268

54
249
900
53
27
464
115
1,293
3,159

210
272
957
878
540
－
－
1,785
4,645

4,224
－
3,469
7,693
33,998

3,714
1,604
4,398
9,717
36,196

20
1
1,934
－
2,298
255
1,268
836
500
202
7,317

528
6
－
7,705
144
145
－
－
－
－
8,529

5
1,683
90
50
560
－
－
－
399
2,790
38,525
2,967△17,838△14,870
53,396
1,231
52,165

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

(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
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to
Owners of the Parent
Non-controlling interests

19

FY201653,396(Millions of yen)
FY201725,381

1,333
240
△717
448
△138
1,166
54,562

1,039
178
425
241
170
2,055
27,43653,3691,193

21,6605,775

(4) Consolidated Statements of Cash FlowsFY2016
Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in provision
Increase (decrease) in net defined benefit liability
Decrease (increase) in net defined 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
Loss (gain) on sales of shares of subsidiaries and associates
Share of loss (profit) of entities accounted for using equity method
Subsidy income
Interest expenses
Loss on reduction of non-current assets
Impairment loss
Loss (gain) on disposal of non-current assets
Gain on transfer from business divestitures
Gain on write-off of debts
Gain on insurance claim
Settlement received
Gain on sales of patent right and other
Loss on transfer of business
conpensation income 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
Settlement package received
Proceeds from conpensation income
Payments for contract cancellation
Income taxes (paid) refund
Net cash provided by (used in) operating activities

20

38,525
14,215△3,149
135
△290
△304
△13
△14
△1
△1,934△900△2,298
4,224
50
1,683
560
98
△1,268
△255
△500
△836
－
－
－
－
△7,744
824
△574
3,095
△815
△1,69340,818750△4,246255
500－－△18,065
20,012(Millions of yen)
FY201732,895
13,985
1,433
95
△485
△483
△56
△522
△0
－
△957
△144
3,714
110
1,098
715
－
－
△145
－
－
8,059
△7,7051,431
1,604△5,857△6,463△414
11,344
1,673
972
55,899805△3,775
145
－
7,705
△959
2,064
61,885

FY2016
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 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
Gain on sales of patent right and other
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
Cash and cash equivalents at end of period

21(Millions of yen)
FY2017△84130△16,693
197
△305
341
2,926
△9
270
2,298
905
△65
△10,089△288
161△15,526
1,618△3,359
76
5,362
△7
234
144
－
△1,081△12,665△6,625
3,116△17,297△10,000
19,712
△0
△294
△7
△514
△11,911△358△2,346
121,166
118,8192
10,120△50,384△36,01478△1,454△406△21,650△1,500△101,209△23△52,012
118,819
66,807

(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 film22

2. Information on sales, income, assets and other items by reportable segment
Fiscal 2016 (April 1, 2016 – March 31, 2017)(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

82,432913
83,346
12,99947,63356,792
10,93467,726
9,215
65,55582,873
121
82,995
7,552
53,511

2,276
2,410

2,679
1,474

3,194
3,907

CementAdjustment*2

Figures in
consolidated
financialstatements*3

299,106
37,836
336,943
41,122
263,057(37,836)(37,836)(2,589)161,375

299,106
299,106
38,533
424,433

13,261
16,692953
898

14,215
17,591Others*1

Total

48,6122,139
50,751
5,389
53,631

28,39623,72852,124
5,965
42,696

1,824
6,425

3,286
2,473

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 (¥194,566 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 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 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.
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(Information on sales, income, assets and other items by reportable segment)”Cost of idle operations,” which was included in “Others” under “Non-operating expenses” during the
cumulative of the previous fiscal year, is included under “Cost of sales” from the first quarter consolidated of thisfiscal year for the purpose of stricter cost control.

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