FY2020
Business Results(April 1, 2020-March 31, 2021)

May 11th, 2021

Contents
１．Business Results for the FY 2020

２．Segment Results for the FY 2020

３．Future perspective and Mid-term business plan

４. Projection for the FY 2021

2

１．Business Results for the FY2020

２．Segment Results for the FY2020

３．Future perspective and Mid-term business plan

４. Projection for the FY 2021

3

Financial results for FY2020• Thanks to brisk Semiconductor/Electronic devices demand and strong investment trend
for advanced semiconductor, our net sales and profit achieved historical record. Net profit
exceeded 42% over our projection.
• Net sales: 27,164million yen（YoY+2,708million yen, +11%）• Profits: Operating profit 2,939million yen（YoY+754million yen, +35%）
Ordinary profit 2,982million yen（YoY+920million yen, +45%）
Net profit 2,345million yen（YoY+493million yen, +27％）(Million yen)

FY2019Results

FY2020
Projections

FY2020Results

Net sales

24,45526,000 27,164 +2,708 +11.1％

Operating profit

2,184

2,600

2,939

Ordinary profit

2,061

2,500

Net profit

1,852

Net profit per share(Yen)
Dividends per share(Yen)
FX Rate (USD)

YoY
Change%Comparison withFY2020 projections
Change%+1,164104%+754 +34.6％

+339

113%

2,982

+920 +44.6％

+482

119%

1,650

2,345

+493 +26.6％

+695

142%

233.43207.89295.57

20.00

20.00

20.00

¥108/$¥105/$¥110/$

4

The summary of FY2020 financial results■Net sales✓ 27,164million yen（YOY+2,708million yen, +11%）✓ Photosensitive materials: High end material such as PAG and Polymer increased.
✓ Chemicals:
EL materials increased and Aroma chemicals keep goodsale. Logistic business（Chemical Terminal）had a lessmovement of good in 1st half, but returned to normal level now.

■Operating profit✓ 2,939million yen（YOY+754million yen, +35%）✓ Labor cost（+329mio yen）and depreciation （+128mio yen）and etc. for capacity
up for photosensitive material was well compensated by sales increase, thenincreased in profit.
✓ High valued product sales expansion contributed an increased in plant operation
rate.

■Ordinary profit✓ 2,982million yen（YOY+920million yen, +45%）✓ Insurance money received（+66mio yen）,FX gain（+49mio yen) are counted into
the statement. There are no FX loss which was counted into the last year statement(56mio yen improvement）.

■Net profit✓ 2,345million yen（YOY+493million yen, +27%）✓ No Differed tax asset which was counted in the last year statement.
✓ Corporate tax decrease by tax credit due to new production building construction.

5

Change analysis: Operating profit• Sales and high valued products businessexpansion contributed for profit increase, Advanced expenditure increased for
production capacity up (Depreciation,then it well absorbed the fixed cost
maintenance & repair, wage, disposal loss)
increase for business growth.

+505 +131 △144 △960

（Million yen）

+1,436

Operation
Inventory
improvement revaluation

Portfolio
improvement

2,184
Sales growth

FY2019Result△213
Expenses
increase

2,939

FX

+754
FY2020Result6

Quarterly sales & operating profit trend• Q4 sales 7,340million yen （YOY+921mio yen、+14%）
Operation profit 799million yen（YOY+120mio yen、+18%） as continuing record
high.
• Sales CAGR 10.6% and Operation profit CAGR 53.7% , steadily growing.

7

FY 2020 Statement of income• Sales 27,164million yen（YOY+2,708mio yen, +11％) and COGS +9% increase resulted
in gross profit 6,209million yen（YOY+946mio yen, +18%）as improvement.
• Selling expense stay as +6% increase contributed for operation profit 2,939million yen（YOY+754mio yen, +35%）as improvement.
（Million yen）

FY2019FY2020Change%24,455

27,164+2,708+11%

19,192

20,954+1,761

+9%

5,262

6,209

+946

+18%

3,078

3,270

+192

+6%

2,184

2,939

+754

+35%

94

188

+94

2倍

Non-operating
expenses

217

145

△71

△33%

Ordinary profit

2,061

2,982

+920

+45%

Extraordinary income &losses

△48

△36

+11

+24%

Profit before income taxes

2,013

2,945

+932

+46%

160

599

+439

2.7倍

1,852

2,345

+493

+27%

Net sales
Cost of sales
Gross profit
SG&A expenses
Operating profit
Non-operating income

Income taxes
Net profit［Gross profit +215 million yen］
Gross profit ratio improved by
1.4pt.

［Non operating income +94
million yen］
Insurance money received 66
million yen
FX gain 49 million yen

To recorded Deferred tax
assets in the FY2019.

8

FY2020 Statement of cash flows• Operating cash flow：4,419 million yen（+956mio yen, +28%）, Sales expansion
bring for profit improvement and WC improvement contributing for operating CF.
• Investment CF：△5,688 million yen due to execution of photosensitive material
capacity up payment.
• Financing CF：1,472million yen, Securing capital investment funds.
FY2019FY2020Change

3,463
2,013
2,172
△339

4,419
2,945
2,311
△732

+956
+932
+138
△392

△197

36

+233

Improvement of WC

Cash flows from financing activities△94△90△5,179△1,715
△80

470
△611
△5,688△1,268
1,472

+564
△520
△509
+447
+1,553［Investment CF△5,688］
Expanded capacity up
for photosensitive
materials.

Effect of exchange rate change on
cash and cash equivalents

△33

7

+41

△1,829211+2,041

3,170

3,382

+211

(Million yen)
Cash flows from operating activities
Profit before income taxes
Depreciation
Decrease (increase) in trade receivables（+: decrease）
Decrease (increase) in inventories（+: decrease）
Increase (decrease) in trade payables（+: increase）
Other

Cash flows from investing activities
FCF

Net increase (decrease) in cash andcash equivalents
Cash and cash equivalents

9FY2020 Balance sheet• Photosensitive material capacity up investment resulted in tangible asset+2,795million yen and interestbearing debt+1,799million yen increase, then net profit increase contributed for shareholders’ equity
increase by 2,186mio. Equity ratio 29.4%（+2.4pt）.
• Continue to strive fiscal soundness by improving operating rate at new investment facilitates（Million yen）
Current assets
Cash and deposits
Trade accounts receivable
Inventories
Other
Fixed assets
Property, plant andequipment
Intangible assets
Investments and otherassetsTotal assets
Liabilities
Trade payables
Interest-bearing debt
Other
Net assets
Shareholders’ equity
Valuation and translation
adjustments
Liabilities and net assets

Mar. 2020
ended

Mar. 2021
ended

Change15,503
3,582
4,654
7,019
246
23,627

16,998
3,794
5,386
6,983
833
26,520+1,495
+211
+732
△36
+587
+2,892

22,112

24,908+2,795

407

523

+116

1,107

1,088

△18

39,13028,561
3,000
18,188
7,372
10,56910,56343,51830,727
3,470
19,987
7,269
12,79012,750+4,388+2,166+470+1,799△102+2,221+2,1865

40+34

39,13043,518+4,388［Tangible asset+2,795million yen］
［Interest-bearing debt
+1,799million yen］

Increased due to Photosensitive
material capacity up investment［Equity ratio］
29.4%（YOY+2.4pt）

10

１．Business Results for the FY2020

２．Segment Results for the FY2020

３．Future perspective and Mid-term business plan

４. Projection for the FY 2021

11

Business portfolio
80% sales from IC/FPD/Electronic application
Logistics
Aroma
materials

IC/FPD/
Other electronic
application(High-purity
organic solvent)Outside: Market
Inside: Our sales ratio

FY2020Net sales
27,164million yen
chemicalsegment
41%

IC/FPD/
Other electronic
application
Photosensitive(Photosensitive
materials segment materials, Polymer)
59%

12Photolithography in Semiconductor and FPD• High definition FPD ＝ Minimum line width• Performance of CPU/Memory（IC）＝ Minimum line width•１．Coating photoresist on the substrate•２．Exposure via photomask astransferring image to coatedphotoresist
Light source

Photomask(circuit diagram)•４．Developing by developer to get thepattern
Projection lensPhotoresist
substrate•３．Chemical reaction on the
exposure area

13Composition of photoresist• Toyo Gosei’s photosensitive materials are a critical component in photoresists
used to make semiconductors and FPDs.
•Commonphotoresist
composition
ratio•Additives•Potosensitive materials•PAG: Photo Acid Generator•PAC: Photo Active Compound•Several% to several tens% for polymer•Total 100%

•Photoresist (liquid form)•*Blended with other materials by photoresist makers•Polymer（Resist resin、Basepolymer) ～10％

•Our main products•High-purity organic solvent•(PGMEA, EL etc.)

14Business Overview Photosensitive Materials/Chemicals (Solvents)• Toyo Gosei supplies photosensitive materials to customers worldwide. These materials
play a key role in determining the performance of semiconductors and FPD.
• Semiconductors’ application is diversifying in growing market such as IoT, which is
driving growth in photosensitive material demand.
•VR
devices•Photoresists•Photosensitive
materials•Semiconductors•Mobile phones•Semiconductor makers
TGC•Photoresist
makers•Automobiles•PC

Finishedproduct makers

Retailers

ConsumersPanelmakers•LCD panels,
TVs•LED bulbs•Digital signage15

Outlooks: Photosensitive materials Application, Wave length and Line Width• Advanced miniaturization technology in semiconductor moving into EUV lithography
process development.
• In FY2021.3, ArF & EUV application photosensitive materials demand increase• Continue to strive quality improvement for all generation photosensitive materials and＝Stagnant
expanding further product line-up.
＝growing

FPD
g＋ｈ＋
ｉline

I lineIC
G lineI line

KrF

ArF

Node

～
～
～700nm ～200nm ～110nm ～65nm
2,000nm 1,000nm

Application

TV, PC

MarketTightsupplydemand

Small & Mid
size Panel
Smart phoneand etc.

Gradually
growth

IGBT、LCD driver、LED

expanding

TGC
Poducts

Photo Active Compound (PAC）
EL high purity solvents

ArF
DP

～45nm

～22nm

ArF

DRAM/NAND memory（recovery in 2020 as projection）

Back-end process materials
CMOS sensor
Gradually
growthImmersion

steadyAdvanced logic LSI
Demand expansion
steadyexpanding

ArF
MP
EUV
～7nm

～5nm

～2nm？

New generation DRAM
Pilot production
New Generation Logic LSI
EUV Production expansion
CAPEX in progress

R&D

Photo acid generator（PAG）
Polymer
EL Ultra high purity solvents

16

Photosensitive Materials Segment
Net sales：15,976million yen

+12%

+16%

（YOY+1,759million yen, +12%）• Sales increase by strong demand
from advanced semiconductormaterial (EUV、ArF).
Operating profit ：1,823million yen（YOY+257million yen, +16％）• Thank to advanced material sales
expansion, operating profit increase
after compensating incased of labor
cost and depreciation in capacity up
investment.

17Composition of photoresist• Toyo Gosei’s photosensitive materials are a critical component in photoresists
used to make semiconductors and FPDs.
•Commonphotoresist
composition
ratio•Additives•Potosensitive materials•PAG: Photo Acid Generator•PAC: Photo Active Compound•Several% to several tens% for polymer•Total 100%

•Photoresist (liquid form)•*Blended with other materials by photoresist makers•Polymer（Resist resin、Basepolymer) ～10％

•Our main products•High-purity organic solvent•(PGMEA, EL etc.)18

Aroma Chemicals Market
Aroma Chemicals Market share• The global aroma chemicals market isexpanding at CAGR 3-4% steadily• The top six suppliers dominate 70% of the
global market.
• Major suppliers is actively doing the M&A to
increase their global market share, which islead to oligopolization.
• TGC is a few selected aroma chemical key
materials to mainly major global aroma
chemicals companies. Our market share isestimated around 30-40% in our segment• Global niche top position.

Source：Leffingwell & Associates

19Business Overview Chemicals (Aroma Chemicals)• Aroma chemical flow from raw materials through to finished products•Rawmaterials•Process•Plants,
flowers,
seeds, fruit,
leaves, bark,resin, etc.

•Press•Extract•Distil•Animals•Dairy, meat,fish•Refine•Synthetic
raw materials•Pulp- andalcoholbasedmaterials, etc.

•Synthesize•Base material•Refine•Naturalaromatics•Isolate•Refine•Process•Processing•Solubilization•Powderization•Emulsification•Products•Applications•Flavors•(Foodflavorings)•Confectionary•Beverages•Frozendesserts•Snacks•Ham•Sausages•Tooth paste•Cigarettes,
etc.

•Fragrances•(Cosmetic
fragrances)•Perfume•Cologne•Cosmetics•Soap•Detergent•Shampoo•Air freshener•Solvents, etc.

•Blend•Synthetic
aromatic•Ourbusinessdomain20

Logistic Business model•①Liquid chemicals made in Japan oroverseas coming to Takahama bychemical tanker•② Transfer chemical totank from tanker•③ Storage at tank•④ Transfer chemicals to tank lorry
and other package from tanks•⑤Deliver to users in Tokyo
metropolitan area

21

Logistic Business (Advantage of Takahama Chemical Oil terminal)• Toyo Gosei’s chemical logistics terminal distributes
liquid chemicals made in Japan or overseas to plants
across the Kanto region-biggest chemicals distribution
hub as larger shipment volume in Tokyo bay area
• Only chemical tank terminal run by chemicals company
and handling variety of package, own certified
analytical laboratory for the high-quality storage
management as providing service for wide rage
chemicals• Prime location close to expressway network (about a
few minutes from Chidoricho IC) shorted delivery time
to northern Kanto area where are major chemical•Terminal has 65 bonded storage tanks with various volumes,
capable of holding chemicals with different grades and properties users located. Possible to three round delivery a day isappreciated by customers in shortage of tank lorry
driver.
• Operating rate always keep at high level.

•Receives 70 vessels per month •Largest shipment volume in
the Kanto region: 80-100 Tank
lorry car per day• Strict regulations in the Fire Service Act make it
difficult for new competitors to establish new
operations in the Tokyo Bay area22

Chemicals Segment
Net sales：11,187million yen（YOY+948million yen, +9%）+9%

• Electronic materials sales increased
and aroma chemical business keep
steadily.
• Chemical Terminal business had a lessmovement of good in 1st half, but
returned to normal level now.

+80%

Operating profit：1,115million yen（YOY+496million yen, +80%）• High valued products for Electronicmaterials application is expanding.
• Aroma chemical materials sales keep
steadily.

• Decreased depreciation for pastcapacity up investment.
23

１．Business Results for the FY2020

２．Segment Results for the FY2020

３．Future perspective and Mid-term business plan

４. Projection for the FY2021

24

Semiconductor Market Development & Projection• Since 1980s, arrive of information-driven society driving high growth semiconductor
demand.
• Information and communication technology contributing 1.5-2.0 times semiconductor
market growth as projection.
• In 2021, high growth estimation (8-10%).
World IC Market Sales
2018 result 13.7% growth（WSTS）
2019 result 12.2% down（WSTS）
2020 result 6.8% growth（WSTS）
2021 projection 8.4% growth（WSTS）

CAGR 7%

CAGR 5-6%

Source: WSTS & Fuji Chimera Research Institute, Inc(Projection)

25

Down Size by photo lithography• Semiconductor miniaturization technology development continue and 5nm process has
been put into volume production now.
• For CY2024, 2nm process is under development.
• With miniaturization progress, expanding higher demand for ultra high purity solvent
and photosensitive materials.
current
Sub 3nm next
Generation EUV?

20nm
ArF Double
patterning

14
10nm
ArF Multi
patterning

5nm

3nm

2nm

1nm

7nm
10nm
14nm

20nm

7nm EUV
3D structure device

28nm
2011

2013

2015

2017

2019

2021

2023

2025

Year

Source : IMEC and TGC

26

Photoresist Market Development• ArF and EUV photoresist demand will be increase 2.1 times during
CY2020-2026 as projection.

886,000

413,500

EUV photoresist

45.1%

ArF photoresist

12.2%
KrF photoresist

5.5%
The numbers are CAGR.
（2019→2026）

Source : Fuji Keizai Co., Ltd. and TGC

27

FPD Market Trend•FPD（Flat Panel Display）market continue steadily growth at CAGR4.5%• Because of high resolution display share expansion by large display TV, smart phonewith OLED type, 4K&8K TV and etc. contribute demand increase for ultra high purity
solvent and photosensitive materials(Million m2)

Demand outlook for FPDs (surface area)
OLED

LCD

LCD
2015→2020：35.9% growth
CAGR：6.3%

OLED
2015→2020：2.8 times
CAGR：30.3%→Projection

4.5%

LCD
2020→2024：14.4% growth
CAGR：3.4%

OLED
2020→2024：1.4 times
CAGR：25.0%（Year）
Source：DSCC’s 2020 Display Market Outlook Virtual Conference & TGC

28

Photosensitive Materials Capacity Up Investment•4th production building at Chiba Plant was completed on Oct. 18, 2020.
•It is ongoing to start operation in this year and increase operation rate.
•Continue investment for capacity up at existing facilities.

FY20182H
Advanced polymer& Advanced
Construction
Photosensitive
Materials（PAG）

FY2020

FY2021
Current

Operation start

FY2022

Continue investment forcapacity up at existing
facilities

Qualification

Operation start

New Plant(New Productionbuilding)

Construction
Designcapacity up at
existing facilities

FY2019Qualification

Construction
Construction

29Capital Investment, Depreciation, & R&D trend•Since 2017, executing capacity up investment in electronic materials market expansion•After completed planned strategic big investment, capital investment in FY2021 is about 3.5billion
yen as plan. Capacity up investment will continue in market demand increase.
•R&D focus on production process technology enhancement （Analytical capability, Productivity
improvement, pilot production capability）with 150mio yen budget.

30

TGC300 Progress (Mid-term business plan)• Completed all strategic capacity up investment to meet electronic materials market
demand growth.
• Mid-term business plan 「TGC300： FY2022 with Sales 30billion yen, Ordinary profit
3billion yen、Ordinary profit rate more than 10％」 will be earlier achieved in FY2021 asprojection.

ordinary profit ratio

Net sales
Ordinary profit（Million yen）

• To meet further demand
expansion, continue toenhance supply system andcapacity up investment,
which lead further company
value improvement by allmeans and one team of TGC（Projection)

Mid-term business plan31

１．Business Results for the FY2020

２．Segment Results for the FY2020

３．Future perspective and Mid-term business plan

４. Projection for the FY 2021

32

FY2021 Background of earnings forcast■Business Circumstance
FY2021• CY2021 Semiconductor market will be expected historical high growth（
YOY+8%.
• Industrial solvent and aroma chemical for toiletry application as daily
necessities will be steadily growth at latest projection.
Mid-term• USA and China government making big strategic subsidiarization forinvestment in Information & Communication and Semiconductor market
drive further semiconductor demand and semiconductor companies big
capital investment.

33

FY 2021 ending projection• Mid-term business plan TGC300(target with Sales 30billion yen, Ordinary profit 3billion yen,
Ordinary profit rate more than 10％) will be earlier achieved in FY2021 as projection. FX rate is¥105/$.

FY2021projection

Change27,164

31,150

3,985

+15%

ー

30,000ーーOperating profit

2,939

3,550

+610

+21%

Ordinary profit

2,982

3,400

+417

+14%

Net profit

2,345

2,400

+54

+2%

Net profit per share(Yen)

295.57302.38¥110/$¥105/$（Million yen）

Net sales（Old Accounting Standards ※）Net sales（New Accounting Standards ※）FX Rate (USD)

FY2020results%※ From FY2022 New Accounting Standards for Revenue Recognition (ASBJ Statement No. 29 AccountingStandard for Revenue Recognition issued on March 31, 2020) is applied for the above projection.

34

FY2020 vs FY2021 Cost comparison• FY2021 cost and expenditure increase by 1.4billion yen from previous FY2020• 2nd half of FY2021 increase 500 million yen of cost and expenditure from 1st
half of FY2021 as projection• The cost up due to capacity up to meet further market demand expansion

FY2021 cost transition image
Changes in product mix
For further demand
expansion, investment
and cost up in advance

COGS (Std. cost increase)
due to increase production
at new facilities+About 1.4
billion yen

FY2020+About 500
million yen

Fixed cost increase

FY2021

FY2021
1st half

FY2021
2nd half

35

Shareholder returns• FY2021,TGC300 target will be earlier achieved, then dividend per share earlier will be 30yen
per share as plan
• Although it is based on stable dividends policy, the shareholder return is decided bycomprehensively considering growth potential, financial balance and etc.

(yen)

Dividends per share36

Individual Development, to the global Chemical