Business Results for the Second Quarter of
Fiscal Year Ending March 31, 2024
(April 1, 2023 – September 30, 2023)
November 20, 2023

1

Management Philosophy & Vision of the Medium-term Management Plan

Management Philosophy
Toyo Gosei is conducting business to support the advancement of civilization through projects based onhuman talent, creativity, science, and technologies. Then Toyo Gosei growing itself to increase its
contribution.

The concept of Medium-term Management Plan
In the field of electronic materials, where demand is expected to grow further in the future, we will further refine the high-purity
synthesis that we have cultivated over many years and our refining technology as well as strengthen a stable supply system that meets
customer quality, then achieve growth in people, organizations, and businesses. As the result we contribute to the realization of asustainable decarbonized society as the world's No.1.

Vision of the Medium-term Management Plan
We will create the future by taking each customer issue and technical issue seriously, solving them from an original
perspective, then achieving both ultra-high quality as the world's No. 1 DANTOTSU (outstanding)and productivity
improvement.
2

１． Business Results for the H1 FY 2023

２． Projection for the FY2023

３． Future Outlook
3

Financial Results for the Q1 FY2023• Sales were 15,055 million yen (YoY -14%) due to the impact of sluggish semiconductor demand and inventory adjustments.
• Operating profit was 1,297 million yen (YoY -55%) due to cost reduction efforts in response to declining demand from the beginningof the fiscal year.
• Compared to initial plans, sales were below target, but operating profit was almost achieved, ordinary profit +8%, and net profit+15%.
• Investments to increase production capacity will continue in preparation for medium and long- term market expansion in the next
fiscal year and beyond.

(Million yen)

Net sales
Operating profit
Ordinary profit
ProfitH1 FY2022
Results

17,553
2,852
3,278
2,247

H1 FY2023
Results

15,055 (2,498)
1,297 (1,555)
1,354 (1,924)
917 (1,330)

EPS

¥283

¥115

Interim Dividends

¥20

¥20

￥132/$￥140/$FX Rate (USD)

YoY
Change
%

(14%)
(55%)
(59%)
(59%)

H1 FY2023
Projections

16,000
1,300
1,250
800

Comparison with Forecasts

Change

YoY

(944)

(6%)

(2)

(0%)

+104

+8%

+117

+15%

4

Variance Analysis: Operating profit• While cost reduction efforts in response to lower sales, the planned 1 billion yen increase in expenses for the firsthalf was limited to approximately 0.4 billion yen as timing adjustments and other arrangement to secure operating
income of 1.29 billion yen at the level of the earnings forecast.

(Billion yen)

2.85

+0.11
FX

(0.20)
Inventory Impact(operation andvaluation)

H1 Plan¥1 billion(1.06)
Decrease in Sales

Operatingprofit2023.3月期 Q2¥0.59 billion
Reduction(0.41)

Increase in production
costs such as fuel,electricity, and*Investments to increase production personnel
capacity are progressing according
to the mid-term plan.

(¥1.56)billion

1.29
Operatingprofit2024.3月期 Q2
5

Net sales Composition Ratio• Net sales of semiconductor and electronic materials-related products accounted for 86% of total sales.

Logistics
Aroma
Chemicals
Photosensitive Materials
62%

Chemicals Segment
38%（ Including electronicmaterials related 24%）

High-purity
solvents

H1 FY2023
Net sales:¥15,055 million

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

6Semiconductor Market Trend• WSTS expects the growth rate in 2023 to be -10.3% YoY.
• April-September average sales were -14.5% YoY, while semiconductor sales bottomed out in February and are
now recovering moderately.

Semiconductor Market Trend(M$)

60,000H1 FY2023

H1 FY2022

recoveringmoderately

50,00040,000

YoY-14.5%

30,00020,00010,000CY2021

CY2022

August

July

June

May

April

March

February

January

DecemberNovember

October

SeptemberAugust

July

June

May

April

March

February

January

DecemberNovember

October

SeptemberAugust

July

June

May

April

0

CY2023
Source: WSTS

7

Electronics manufacturing supply chain from our company to the consumer

Photosensitive
materials &Polymer

Automobiles

Photoresists

Semiconductors

smartphones
PCs

TOYO GOSEI

Photoresist
Manufacturers

Semiconductor /Display
Manufacturers

Finished Product
Manufacturers

Retailers

Consumers

excess inventory

OLED/LCD, TVs
High-purity solvent

IoT

VR devices
8Quarterly Sales, Operating profit & Sales Growth Rate Trend• Sluggish demand for semiconductors and inventory adjustments in the supply chain will last longer than expected• Sales had been declining since peaking in Q4 of the fiscal year ending March 2022, but are expected to bottom out
in Q2.

Quarterly Sales, Operating profit & Sales Growth Rate
Sales Growth Rate
(YoY)

11.1% 12.4%(Million yen)

(Million yen)

0.4%

15,00012,000

2,000

-9.3%

Net sales
Operating profit-10.5%-17.6%

1,600

9,000

7,444

6,000

Decrease in net
sales narrowed➡Bottom out

1,200
800

463
3,000

400

0

0
Q1

Q2

Q3

FY2020

Q4

Q1

Q2

Q3

FY2021

Q4

Q1

Q2

Q3

FY2022Q4Q1Q2FY20239

Photosensitive Materials Segment
Net sales & Operating profit(Million yen)
12,00010,922

Net sales(Million yen)
Operating profit
2,400
10,3739,298
1,800

10,481

9,652
9,000

1,905
1,677

1,620
1,400

6,000

1,200

797
3,000

0

600

H1

H2

H1

FY2021

5,442
4,970

998

H1
FY2023

FY2022(Million yen)
6,000
5,511

4,000

H2

4,930

0

4,832

YoY: (¥1,108) million, (58％)

4,466

820

500

580

222
0

Q1

Q2

Q3

FY2022

Q4• Sales of materials for semiconductors decreased due tosluggish demand and inventory adjustments in the
supply chain.
• In materials for displays, large LCD panel production
remained strong, especially in China.

Operating profit: ¥797 million

574
2,000

YoY: (¥1,183) million, (11％)

Net sales(Million yen)
Operating profit
1,500

1,000

907

Net sales: ¥9,298 million

Q1

Q2

FY2023• Profit decreased due to decreased sales of materials foradvanced semiconductors.
• Continued to increase production capacity
investment as planned in preparation for demand
expanding period.

010Chemicals Segment
Net sales & Operating profit
Net sales
Operating profit(Million yen)
8,000(Million yen)
1,200

7,072
6,511

6,058

6,229

946

5,756

6,000

900

715

691

634
500

4,000

600

2,000

300

0

H1

H2

H1

FY2021

H2
FY2022(Million yen)
4,000

2,966

380

478

2,778

2,977

600

Operating profit: ¥500 million
335

400
260

240

1,000

0

200

Q1

• In the electronic materials sector, demand continued to
decline due to inventory adjustments, but has bottomedout.
• Overseas demand for flavor and fragrance materials
recovered ahead of the market.

3,262

3,000
467

0

YoY: (¥1,316) million, (18%)• In the logistics business, although cargo movements
continue to be sluggish, tank contract rates remain at a(Million yen)
800
high level.

Net sales
Operating profit

3,721
3,350

2,000

H1
FY2023

Net sale: ¥5,756 million

Q2

Q3
FY2022Q4Q1Q2FY2023

YoY: (¥446) million, (47%)• Profit decreased due to decreased sales of electronicmaterials.

011

H1 FY2023 Income Statement• Sales were 15,055 million yen (-14% YoY) due to weak semiconductor demand and inventory adjustments.
• Gross profit was 3,326 million yen (-33% YoY) due to lower sales of high value-added products resulting frominventory adjustments in the semiconductor market and production adjustments associated with inventory reductions.

H1 FY2022
Results

H1 FY2023
Results

17,553

15,055(2,498)(14%)

12,597

11,728

(868)

(7%)

4,956

3,326

(1,629)(33%)

SG&A expenses

2,103

2,029

(74)

(4%)

Operating profit

2,852

1,297

(1,555)(55%)

Non-operating income

486

117

(368)

(76%)

Non-operating expenses

59

60

+0

+1%

3,278

1,354

(1,924)

(59%)

(36)

(18)

+17

(48%)

3,242

1,335

(1,906)

(59%)

994

418

(575)

(58%)

2,247

917

(1,330)(59%)(Million yen)
Net sales
Cost of sales
Gross profit

Ordinary profit
Extraordinary income & losses
Profit before income taxes
Income taxes
ProfitChange%Foreign exchange gains
Previous Period: 430 million yen
Current Period: 19 million yen

12H1 FY2023 Balance sheet• Inventories ¥-488 million: Inventory reduction in line with declining demand.
• Trade payables ¥-1,984 million: Reduction of raw material purchases to meet declining demand.
• Tangible fixed assets ¥+2,167 million: Continued investment to increase production capacity in preparation for the demand
recovery period.
• Borrowings ¥+3,171 million: Increase in capital investment funds.
• Shareholders' equity ¥+757 million: Net profit increase.
Mar. 2023
ended

Sep. 2023
ended

Change21,68521,286(398)

Cash and deposits

3,252

3,614

+362

Notes and accounts
payable – trade

Notes and accounts
receivable – trade

5,912

5,466

(446)

Borrowings

11,758761
29,42011,270934
32,020(488)+173+2,60027,63929,807+2,167

607

977

+369

1,172

1,236

+63

51,10553,306+2,201(Million yen)
Current assets

Inventories
Other

Fixed assets
Property, plant andequipment

Intangible assets
Investments and otherassetsTotal assets

Mar. 2023
ended

Sep. 2023
ended

Change31,46332,856+1,392

4,943

2,959

(1,984)

17,89321,065+3,171

8,625

8,831

+205

19,641

20,450+809

19,556

20,314+757

Valuation and translation
adjustments

85

136

+51

Liabilities and net assets

51,10553,306+2,201(Million yen)
Liabilities

Other

Net assets
Shareholders’ equity

13

H1 FY2023 Statement of Cash flows• Operating CF ¥1,337 million: Profits/taxes decreased due to decreased sales, working capital is improving.
• Investment CF ¥3,798 million: Investment to increase production capacity for completion in the next fiscal year.
• Financial CF 2,913 million: Secure capital investment funds.
H1 FY2022

H1 FY2023

ChangeCash flows from operating activities

2,109

1,337

(771)

Profit before income taxes

3,242

1,335

(1,906)

1,374

1,443

+69

766

446

(320)

(2,029)488+2,5170(1,981)(1,981)(1,245)

(395)

+850

(2,396)(3,798)(1,401)(287)(2,460)(2,173)

Cash flows from financing activities

215

2,913

+2,697

Effect of exchange rate change on cash and cash equivalents

123

(90)

(213)

51

362

+311

3,320

3,614

+294

(Million yen)

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 and cash equivalents
Cash and cash equivalents

Improved working capital:+216 million yen

14

Status of Inventories• Reduce inventory in line with declining demand.
• Inventories decreased by 0.48 billion yen from the end of the previous fiscal year and by 0.99 billion yen from theprevious quarter, despite the increase in unit prices.
(Billion yen)
14
Raw Materials

Inventories Trend
Products

11.7

12

11.2

¥(0.99) billion

10.0

10
8

12.2

8.0
8.3

8.9

7.2

6

8.2

5.7
4

2

2.3

2.8

3.4

3.3

3.0

Q4

Q2

Q4

Q1

Q2

FY2021

FY2022

FY2022

FY2023

FY2023015

１． Business Results for the H1 FY 2023

２． Projection for the FY2023

３． Future Outlook
16

Business Environment Outlook for the H2 FY2023◼ World Economy－The risk of economic downturn remains high, but the inflation rate in each country is gradually decreasing.
Price hikes are expected to subside, followed by a gradual recovery in demand.

◼ Electronic material industry－Inventory adjustment is progressing steadily in the semiconductor industry.
Demand is expected to bottom out by the end of the year, start increasing from January 2024 onwards, andthen recover moderately.

－Display demand will remain the same ～ moderately increase.

◼ Flavor and Fragrance Industry－Demand recovery will continue, especially overseas.
17

Revision to Full-year Earnings Forecasts for the FY2023• Sales have been revised to take into account the delay in demand recovery and gradual recovery trend in theoverall semiconductor market.
• Sales were ¥15,944 million (forecast) in the second half, compared to ¥15,055 million (actual) in the first half, showing an
upward trend.
• Profits were maintained at the initial forecast due to cost reduction activities and other factors.
H1 FY2023
Previous(Million yen) Forecasts

H2 FY2023

FY2023Results

ChangePrevious
Forecasts

Revised
Forecasts

ChangePrevious
Forecasts

Revised
Forecasts

ChangeNet sales

16,00015,055(944)

18,50015,944(2,555)34,50031,000(3,500)Operating profit

1,300

1,297

(2)

1,300

1,302

+2

2,600

2,600

－

Ordinary profit

1,250

1,354

+104

1,250

1,145

(104)

2,500

2,500

－

800

917

+117

800

682

(117)

1,600

1,600

－

¥130/$¥140/$¥130/$¥140/$¥130/$¥140/$

ProfitFX Rate18

Progress of Revised Full-Year Earnings Forecasts• Full year progress rate is 48% for sales, 50% for operating profit, and 54% for ordinary profit.
• Each profit has progressed by more than 50% against the forecasted results.

(Million yen)

FY2023
Forecasts

H1 FY2023
Results

Progress Ratio

31,00015,05548%

Operating profit

2,600

1,297

50%

Ordinary profit

2,500

1,354

54%

Profit

1,600

917

57%

Net sales

19Measures to Secure full-year Operating profit• Cost reductions, including timing adjustments, will continue in the second half of the year to offset the impact oflower sales in order to secure profits.

(Billion yen)

4.96

Operating profit

Previous Plan ¥2.5 billion(1.38)¥1.52 billion
Reduction

Decrease in Sales(0.98)
Increase in production
costs such as fuel,electricity, and personnel

2.60
Forecast
Operating profit*Investments to increase production
capacity are progressing according
to the mid-term plan.

FY2022

FY202320

１． Business Results for the H1 FY 2023

２． Projection for the FY2023

３． Future Outlook
21

Photoresist market forecast for semiconductors• Negative growth is expected in 2023, but return to positive growth is expected from 2024 onward.
• Demand for EUV resists will grow 2.4 times from 2023 to 2027.
• Advanced resist (EUV+ArF) is also expected to expand 1.3 times.

(1,000 gal)
900

Photoresist Sales Volume Results and Forecasts
ArF

EUV

CAGR(23-27）

2.4 times

EUV Rasists: 24.5%

600

300

0

CY2022
Results

CY2023

CY2024

CY2025
Forecasts

CY2026

CY2027
Source: Fuji-Keizai

22

Investment to achieve the "Beyond 500" medium-term management plan
• The semiconductor market will return to high growth from 2024 onward after a production adjustment in 2023.
• To meet growing demand, constructing photosensitive materials manufacturing facilities, development and analysis
building, and high purity solvent facilities as planned in the mid-term plan.

FY2023

FY2022<Photosensitive
Materials>

Chiba Plant

Expanded production capacity of advanced products by 1.8 times

Infrastructureenhancements

Expansion of No. 4 photosensitive materials
plantCapacity up at existing
facilities<Chemicals>

FY2024

Qualification

Operation Start

Construction of Development andAnalysis Building

New distillation column addedat Awaji Plant* rendering images

Awaji Plant
Expansion of highpurification facilities

Construction of indoor
filling station*Advanced products:
ArF, EUV

23

CAPEX, Depreciation & R&D Plan
• Changed from ¥11,700 million to ¥10,567 million due to the delayed timing of some capital expenditures.

• However, major investments are proceeding as planned in preparation for demand expanding period.

CAPEX, Depreciation & R&D Plan
(Million yen)
12,000

CAPEX
Depreciation
R&D

10,00010,567

8,000
5,725

6,000

5,258

Average CAPEX

5,200

4,096
4,000
2,000

1,944

2,172

2,311

801

823

876

3,053
2,579
1,029

2,797
1,078

3,002
1,193

0
FY2018FY2019FY2020

FY2021

FY2022

FY2023

FY2024FY2025

FY2026

Beyond 500
24Shareholder Returns• Based on a stable dividend policy and expecting medium-term growth, an annual dividend of 40 yen
stay for the fiscal year ending March 31, 2024.

(¥)

Annual Dividends Per Share

50

40

40

2022

2023
(Plan)

30

30
20
10

40

20

20

2019

2020

10

0
FY20182021

25

Appendix

26

Re-post) FY2023 Fixed cost increase forecast• Continue to increase production capacity to achieve Beyond 500(Net sales ¥50 billion, Operating profit ¥8 billion ~FY2026).

Expansion of photosensitive materials
manufacturing facilities
Amount of Investment: Approx. ¥12 billion
Completion scheduled for Jul. 2024.

Fixed cost increase forecast+¥0.9 billion+¥0.5 billion

New development and analysis building
Amount of Investment: Approx. ¥3 billion
Completion scheduled for Apr. 2024.
*rendering images

Assumed fixed cost increase of 1.4 billion yen from theprevious year
(Increase in headcount, facility expansion, technology
development)27

Re-post) Variance Analysis: FY2023 Operating profit• Expenses increase YoY by ¥1,400 million for technology development and production capacity
enhancement as well as increases in fuel, electricity, and production costs are expected.
(Million yen)

(1,100)

4,968
Sales growth(1,400)
Increases in Fuel,Electricity and Production
Costs

2,600
Technology Development
and Production Capacity
Enhancement

FY2022

FY202328

Individual Development, to the global Chemical(NB)
The forecasts made in this document contain a variety of uncertain factors since it has been prepared based on
judgments from information that is currently available.
Therefore, actual business results may differ from those projected, depending on factors and risk such as the economic
status of the market surrounding the company, and do not perform any strict promise and guarantees.

29