Emerging ontoa Still Wider Stage

Consolidated Business Performancefor the First half of the FYE2021
November 12, 2020

NSHD’s Group operating structure from October 1, 2020

Gas businessin Japan

Thermos business
Thermos K.K. group

Taiyo Nippon Sanso
Corporation group

Nippon Sanso
Holdings
Corporation
Gas businessin Asia and Oceania

Gas businessin the U.S.

Asia/Oceania region
group companies

Matheson Tri-Gas, Inc.
group

Gas business
in Europe
Nippon Gases
Euro-Holding S.L.U.
group

Establishing a competitive group operation framework as a global gas major.
2

2

Contents

Business Performance for the First half of the FYE2021
Overview of business performance for the first halfBusiness performance by segment

Full-Year Forecasts for FYE2021
Overview of the Full-Year Forecast

Shareholder Returns
Business Highlights
Gas business in Japan
Gas business in Asia and Oceania
Thermos businessBusiness Performancefor the First half of FYE2021
Overview
Ortus Stage 2

4Overview of business performance(Billions of yen)

FYE2020
1H results
MarginFYE2021
1H results
MarginYoY
Change% Change

FYE2021
Forecasts(Announced on May 12)

Margin422.8

Revenue

384.5

-38.3

830.0

-9.1%

Core operating
income45.4

Non-recurring profit and loss

1.2

-0.0

-1.2

-

Operating income

46.7

36.6

-10.1

82.0

36.7
10.8%

9.6%

11.1%

Net income attributable toowners of the parent

27.7

-8.7

9.5%

21.0
6.6%

-19.2%

9.9%-21.6%

-6.7
5.5%

82.0

-24.3%

9.9%

44.0
5.3%

Foreign currency translations (average rate during the period)(Yen)
FYE2020 1H
FYE2021 1H

USD (US$)108.67106.32

EUR (€)
120.91121.66

AUD (AU$)
74.75
73.91

The Company hasn’t announced FYE2021 1H targets due to the difficulty of the reasonable calculation the businessperformance effects by the spread of COVID-19 at the time of the announce of the full-year of FYE2020 and FYE2021 Q1.
5

5

Overview of Business Performance: Reasons for Changes in Revenue
As each region experienced economic downturn due to the spread of COVID-19,
revenue in mainly Europe and the U.S. decreased significantly.
However, businesses performance sequentially improved month after monthfrom Q1 to Q2.

-¥38.3bn.

（Down 9.1％）

422.8

FYE2020
1H results

-16.9

Gas
Business
in Japan

-7.7

-10.4

Including foreignexchange impact

Including foreignexchange impact

-2.1

Gas
Businessin the U.S.

-1.3

-2.0

Including foreignexchange impact

Including foreignexchange impact

+0.5

-0.8

-0.05

Gas
Businessin Europe

Gas Businessin Asia &Oceania

Thermos
Business

384.5

FYE2021
1H results（Billions of y en）

FYE2020
1H results
6

157.1

91.2

74.8

50.2

11.0

174.0

98.9

85.2

51.5

13.0

6
FYE2021
1H results

6

Overview of business performance: Reasons for Change in Core Operating Income
1H Operating Income decreases as a result of lower volumes as production
activity in each region reduced. The electronics business centered in Japan andEast Asia was solid given the electronic material gas and related equipment andinstallations.

45.4

-0.9

-2.1
Including foreignexchange impact

-0.3

Gas
Business
in Japan

Gas
Business in
the U.S.

+0.5

-4.6

Including foreignexchange impact-2.0

Including foreignexchange impact-0.1

Including foreignexchange impact+0.1

FYE2020
1H results-¥8.7bn.

+0.3

Gas
Business in
Europe（Down 19.2％）

36.7

-0.01

Gas Businessin Asia &Oceania

Thermos

Eliminations FYE2021
or Corporate* 1H results（Billions of y en）

FYE2020
1H results

11.4

9.6

8.6

5.6

2.1

-0.8

12.3

11.7

13.2

5.3

4.1

-1.3

＊“Eliminations or Corporate” : Intersegment eliminations and companywide expenses that were not allocated to any particular reportable segment.
These companywide expenses related principally to basic research expenses that were not allocated to a particular reportable segment.
7

FYE2021
1H results

7

Business Performancefor the First half of FYE2021
Business Performance by Segment
Ortus Stage 2

8Business Performance by Segment：Gas Business in Japan

Gas Business in Japan（Billions of yen)

FYE2020
1H results

FYE2021
1H results

YoY
ChangeRevenue

174.0

157.1

-16.9

Segm ent incom e

12.3

11.4

-0.9

(core operating income)Revenue

Segment profit margin

Segment income

7.3%

7.1%

174.0
－9.7%
12.3

－6.8%

FYE2020
1H results

Reasons for changes in revenue
 Bulk & On-site (Air separation gases):

Demand decreased sharply across the manufacturing sector
as a whole.
 Equipment and installation, other (Electronics-related):

Sales of Equipment and installation for semiconductor
manufacturers increased.

157.1

11.4
FYE2021
1H results

Reasons for changes in segment income
 In bulk gases, earnings decreased mainly due to a decrease

in revenue from air separation gases.
 Lower costs due to falling fuel prices.
 In Electronics related, earnings increased due to an increase

in revenue from Equipment and installation.

99

Business Performance by Segment：Gas Business in the U.S.

Gas Business in the U.S.
（Billions of yen)

FYE2020
1H results

FYE2021
1H results

YoY
ChangeRevenue

98.9

91.2

-7.7

Segm ent incom e

11.7

9.6

-2.1

(core operating income)*Impact of foreign currency translation: negative impacts of ¥2.13 bn.
on revenue and ¥0.25 bn. on segment income.

Reasons for changes in revenue
 Packaged & Bulk: Demand decreased sharply across the

manufacturing sector as a whole.
 Helium: Revenue increased due to pricing effects.
 On-site: Revenue decreased due to low levels of operation.
 Electronics: Revenue of specialty gases remained flat.

 Welding and cutting-related: Revenue decreased due to a softdemand for automobile and construction industry.

Revenue
Segment income

Segment profit margin

10.6%

11.9%

98.9

11.7

－7.8%

91.2

－18.0%

FYE2020
1H results

9.6
FYE2021
1H results

Reasons for changes in segment income
 In bulk gases, earnings decreased mainly due to a decline inrevenue from air separation gases.
 Earnings decreased due to a decline in revenue from packaged

gases and welding and cutting-related business.
 In bulk gases, earnings increased due to higher pricing.
 Temporary income and removal of prior-year amounts from

non-operating transactions.
 Rationalization.

1010

Business Performance by Segment：Gas Business in Europe

Gas Business in Europe（Billions of yen)

Revenue

FYE2020
1H results

FYE2021
1H results

YoY
Change

85.2

74.8

-10.4

Revenue
Segment income(core operating income)

13.2

8.6

85.2

-4.6

*Impact of foreign currency translation: positive impacts of ¥0.52 bn.
on revenue and ¥0.08 bn. on segment income.

11.6%

15.5%

13.2
Segm ent incom e

Segment profit margin

FYE2020
1H results－12.3%

74.8－34.6%

8.6
FYE2021
1H results

Reasons for changes in revenue

Reasons for changes in segment income

 Packaged: Lower revenue centered on air separation gases,

 Earnings decreased due to a large decline in revenue acrossin addition to soft sales mainly in the refrigerant gas business(next-generation refrigerant gas) in Italy.
 Bulk & On-site: Demand decreased sharply across the

manufacturing sector as a whole.
(large impact on business results due to the spread of COVID-19
and related imposed government restrictions)Bulk, Packaged and all other areas generally.
 Earnings decreased due to soft sales in the refrigerant gas

business (next-generation refrigerant gas) .
 In bulk gases, earnings increased due to pricing effects.

1111Business Performance by Segment：Gas Business in Asia and Oceania

Gas Business in Asia and Oceania（Billions of yen)

Revenue
Segm ent incom e(core operating income)

FYE2020
1H results

FYE2021
1H results

YoY
Change

51.5

50.2

-1.3

Segment income

5.3

5.6

51.5

+0.3

Reasons for changes in revenue
 Bulk: In the Philippines, shipment volume decreased, as

demand fell sharply in response to the impact of city
lockdowns. Revenue similarly decreased in other regions aswell.
 Specialty gases: Shipments were favorable in China andSegment profit margin

10.4%

5.3

*Impact of foreign currency translation: negative impacts of ¥0.76 billion
on revenue and ¥0.06 billion on segment income.

Taiwan.

Revenue

11.3%

－2.6%

+5.5%

FYE2020
1H results

50.2

5.6

FYE2021
1H results

Reasons for changes in segment income
 Earnings increased due to an increase in revenue from

specialty gases in East Asia.
 Profitability improved in the LP gas business in Australia.
 Earnings decreased due to a decrease in revenue in South

East Asia as a whole.

1212Business Performance by Segment：Thermos Business

Thermos Business（Billions of yen)

FYE2020
1H results

FYE2021
1H results

YoY
ChangeRevenue

13.0

11.0

-2.0

Segm ent incom e

4.1

2.1

-2.0

(core operating income)*Impact of foreign currency translation: negative impacts of ¥0.05 bn.
on revenue and ¥0.01 bn. on segment income.

Reasons for changes in revenue Japan: Sales opportunities were lost due to restrictions on

Revenue
Segment income

Segment profit margin

19.1%

31.7%

13.0

4.1

－15.4%

11.0－48.9%
2.1

FYE2020
1H results

FYE2021
1H results

Reasons for changes in segment income Japan: Earnings from the main products such as portable

movement and voluntary suspension of business activities atretail stores in Q1, resulting in a decrease in shipment
volume. Meanwhile, stay-at-home demand enabled higher
sales of frying pans and tumblers.

mugs decreased due to a substantial decline in revenue, as
the Group was unable to capture sales opportunities
associated with periods of high demand such as the leisureseason.

 Overseas: Revenue decreased due to a decline in shipment

 Overseas: In addition to lower operation levels at production

volume in various regions.

plants, sales slowed at group companies accounted for by
the equity.

13
13

Full-Year Forecasts for FYE2021

Overview

Ortus Stage 2

14

Full-Year Forecast(Billions of yen)
FYE2020
Results

FYE2021
Forecasts

Margin

Revenue

850.2

YoY

Margin830.0

Change

-20.2
-2.4%

Core operating income

90.3

82.0
10.6%

-8.3
9.9%

-9.2%

Non-recurring profit and loss

3.5

－

-3.5

Operating income

93.9

82.0

-11.9

11.0%

Net income attributable toowners of the parent

53.3

9.9%

44.0
6.3%

-12.7%-9.3
5.3%-17.5%

Assumed exchange rate for FYE2021: (US$¥): $1=¥108, (EUR¥): €1=¥120
In FYE2020, the Company recorded non-recurring profit on the sales of its assets as part of efforts to improveasset efficiency.
15

15

Shareholder returns

Ortus Stage 2

16

Shareholder Returns
Implement a dividend policy linked to business performance,
while maintaining a stable dividend.
Year-end

¥40

27.1%

27.1%*

26.8%
24.9%

24.3%

Interim

Dividend payout ratio

27.5%

26.2%

25%

22.7%
Japanese
GAAP

¥30

IFRS

30%

20.3%
20%

¥14

¥20
¥12

¥14

¥13

¥11
¥10

15%

10%

¥9
¥6
¥6

¥7
¥6

¥7

¥9

¥11

¥12

¥14

¥14

¥0

5%

0%
FYE2014

FYE2015

FYE2016

FYE2017

FYE2018

FYE2019

FYE2020

FYE2021（Forecast）

Net income
per share (yen)

49.42

47.98

59.72

80.28

113.0495.42

123.26

101.67*Large-scale corporate income tax reductions arose from a reform of the U.S. tax system that resulted in a lowering of the federal corporate tax rate during FYE2018.
Excluding the effects of the above, the dividend payout ratio was 27.1%.

17
17

Business Highlights
Gas Business in Japan：
Growth Strategy of“Taiyo Nippon Sanso Corporation（TNSC）”,

Operating company in Japan
Ortus Stage 2

18

Road to Growth（1.Reinforcement of the basis businesses）
TNSC’s Group Vision（established on October 1, 2020）
As The Gas Professionals, starting from industrial gas, we will continue to be a company that maximizes
the potential of gas and contributes to the development of all industries and the solution of social issues.

Reinforcement of the basis businesses*
We aim to create nouveau values and maximize earnings through excavating the “Utility Values” of Industrial Gas.
1

3

2
Optimization and Efficiency
in TNSC’s group

Digital Transformation（DX）●Integration ofGroup’s common function
・Promotion of shared service
・Building a common platform●Innovation
through utilization of DX
・Controlling plants remotely
・Building SCM basis（Promotion activity of “Total TNSC”）

4
Competitive advantage

Combining the Global Growth
into domestic business●Creation of
the peerless additional values
・Business solutions throughGas Application Technologies●Enhancement of overseas
expansion of Electronics,
ASU, Engineering technology
and products(Combustion, Freezing, Burning etc.)●Maximization ofGroup’s sales synergy
・Sharing customer bases
・Sharing customer contact points

・Business solutions throughGas-related services(Automatic delivery and supply system etc.)●Mutual utilizationof Growth know-how（Productivity and Pricing policy）*Above basis businesses mean Industrial Gas business, Electronics business, Medical business and On-site gas business.

19
19

Road to Growth（2.Driving TNSC’s Growth strategy）
Driving TNSC’s Growth strategy
1

Proactive

To achieve serial innovation○Product development for Growth promotion of TNSC’s Basisbusiness.
Deepening the business field in Electronics,
Cold temperature management and Inflammation.
○Early commercialization of the nouveau innovation products.
e.g. Compound Semiconductors, Stable Isotope,
Additive manufacturing businesses etc.

Environmental
load-reducing
contributive
products

Compoundsemiconductors(MOCVD equipment）

2

2
Collaborative

To promote open innovation○M&A○Collaboration with an industry-government-academia
research groups moreover

Additive
Manufacturing
Technology

Stable Isotope
and Bio-related（Metal 3D printer）

メタン-アンモニア30%混焼
Burning in 30%
mixture of CH4 & NH3NH3 burning utilization technology for contribution of elimination CO2emission in industrial furnace manufacturing

MOCVD equipment UR-26K

Two metal 3D printer business partners

Stable Isotope Water-18O

20
20

Business Highlights
Gas Business in Asia and Oceania：
Report of investment progress
in Asia area
Ortus Stage 2

21

Industrial gas
business-related

Growth investments in Asia area

Electronics
business-related

Korea (Asan): Expansion of electronics material gases plant① Capacity building of electronics material

Completed on

gases

Oct. 2019

Philippines: Establishment of Nitrogen On-site gas plant for electronic
components (Company A)①⑧④② On-site N2 gas supply for a specified

Completed on

customerJan. 2020

Philippines: Establishment of Nitrogen On-site gas plant for electronic
components (Company B)③ On-site N2 gas supply for a specified
customer

Scheduled tocomplete on

Feb. 2021

Scheduled tocomplete on

Apr. 2021

China (Shanghai): Expansion of ASU

⑤

⑥

②
③

⑦

④

Capacity building of liquid air separation
gases (N2, O2)

Thailand(Eastern region)： Establishment of ASU⑤

Capacity building of liquid air separation
gases (N2, O2)

Scheduled tocomplete on

Apr. 2021

Vietnam（Long Sơn Island）： Establishment of ASU
N gas supply for a specified customer and⑥ On-site
Capacity building of liquid air separation gases (N , O )222

Scheduled tocomplete in

FYE2022

Singapore: Establishment of N2 gas production plants⑦

Capacity building of liquid N2 gases

Scheduled tocomplete on

Nov. 2021

China (Yangzhou): Establishment of electronics material gases plant(2nd period)
China: plane view of electronics material gases plant (1st period)

22

Progress reinforcing plants
in each country despite effectsof the spread of COVID-19.

⑧

Capacity building of electronics material
gases

Scheduled tocomplete on

Nov. 2022

Keeping forward growth investments
in preparation of genuine economic recovery
when things return to normal.

22

Business Highlights
Thermos Business：
Demand trends and Business strategy

Ortus Stage 2

23

Recent business environment recognition（Sales situation and Demand change under the spread of COVID-19）
Changes in the environment(Reference) QoQ Sales trends

 Sharp decrease in inbound tourism demand and impact ofdeclaration of a state of emergency*With the previous quarterly actuals defined as 100,
the data was shown as a relative value.

100

Sales of vacuum insulated portable mugs decreased sharply in April andMay 2020, but sales trends has recovered gradually from June 2020.
 Increasing demand on stay-at-home

Recovery

Customers have started to focus on items for spending comfortable
life at home due to being in the process of setting remote work inbusiness person and children on stay-at-home.
Q1

To significantly increase sales of desktop and cooking items(Tumblers and Flying pans) Effect of responding to fees for plastic shopping bags
To increase sales of cool bags

Previous fiscal year
(FYE2020)

Q20

Current fiscal year
(FYE2021)

Q1

Stay-at-home and many temporary shops closureshappened under declaration of a state of emergency.

Q2

Sales of vacuum insulated portable mugs recoveredby slow pace due to unseasonable weather anddisappear of inbound demand. But sales of items
regarding demand on stay-at-home keep strong andwas to recovering near the same level of quarter inprevious fiscal year.

24
24Business measures in the days ahead
FYE2021 (to March 2021)
Production proposals for adaption
to changes on life style Items regarding stay-at-home demand keep strongly.

Later FYE2022 (from April 2021)
Production proposals for adaption
to new-normal life style Usage restrictions of tap water in schools due to correspondence for preventionof COVID-19 (Prohibition of drinking and gargling.)

Flying pan: Arranging the sales place that work closely with commercial message
in demand season ( in November and December 2020)

Trends that people go around with drinking flask will keep increasingly
from the days ahead.

Tumbler: Proposal for the rearranging of the sales place with mags that is tended
to sell strongly in the second half.

Proposal for the portable mugs and poaches as well as
typical sports bottles and bottles for kids.

 Expands sales measures centered on the new products in autumn 2020.
Bottles: Expansion of products in the growing market such as pocket mags
Expansion of sales of products with new useful functions (dishwasher compatible etc.)

 Expansion of “My bottle” demands in the scene of the extracurricular activities

due to the changes in sanitary recognition.
Shift from sharing the team’s jags or plastic bottles to using own personal bottles
Lunch box: Proposal for product line-up of hot lunch box as mainly soup jaws.
Proposal for the sales places that work with special contents and recipes in
Thermos’s corporate website.

25

Awareness of potential expansion in the target market ofsports bottles and large scale jags.

Sales expansion measures centered on new products in winter 2020 / spring and summer 2021
(Sports bottles / Bottles for Kids / Portable mags / Frying pans / Tumblers)25

Business topics
Release of the new dishwasher compatible bottles thatdeveloped collaborative with Panasonic.
 Thermos K.K. released the dishwasher compatible bottles that overcome“the deformation due to plastic parts by heat” and “the paint peeling”
for the first time in the Company, and collaborative with Panasonic,
the leading dishwasher sales company.
Acquiring the attention from the media through newsworthinessof the collaboration products by the two leading companies and
PR of development confidential story in cooperation.

Opening of take-out only Thermos Coffee shops.
 To aim promotion using my bottle, Thermos K.K. opened take-out only

Coffee shops “THERMOS COFFEE TO GO” in Nishi-Shinbashi andOtemachi in Tokyo.
 Customers would practice elimination of the plastic cups through thefamiliar behavior with enjoying delicious coffee in their bottles.

Enhancement of Thermos Bland and expanding sales offlying pans through TV Commercial Message.
 Release of New CM bland work (new portable mugs) in Nov. 2020.
Thermos K.K. promotes the its great heat retention performance that can be
felt only in the great cold environment and situation.
 Release of New CM bland work (new portable mugs) in Nov. and Dec. 2020
Thermos K.K. plans to work with sales places by the theme of “World cooking”.

26
26

Thank you

Ortus Stage 2

Reminders

The information contained here is not disclosure information for securities trading.
The accuracy and completeness of this information are not guaranteed.
The briefing session and this material describe future plans and strategies, as well
as forecasts and outlooks of business performance. These plans and strategies, aswell as forecasts and outlooks, are made by Nippon Sanso Holdings Corporation
based on its judgments and estimations made in accordance with the information
available at present. Actual performance will be subject to changes caused by avariety of risks and uncertainties (such as economic trends, market demand,exchange rates, taxation systems and various other systems and institutions, but
not limited to them).
We wish to remind you, therefore, that the actual business performance may differ
from the forecasts and outlooks made at this time. Please refrain from making
investment judgments based solely on this information.