The Fiscal Year ending March 2021
(2020 April- 2020 June)

Business Results

August 2020

１．Business Results for the 1st QT FY ending 2021 March

２．2021 March ending Projection

３．Appendix

2

Business Highlight for FY2021 1QT• The revenue was 6,589million yen（Comparison with previous year +631 million yen、＋11％)• Although labor cost and depression for photosensitive material capacity expansion increased,advanced products sales growth well more than compensating cost increase, operation profit
increased +128% YOY, ordinary profit increased +47% YOY, net profit increased +48％ YOYthanks to good electronics materials market.

（Million yen）

Prev. Year1Q
ResultFY20211Q
ResultI/D AMT

YOYI/D %5,958

6,589+631+11％594

760+166+28％

531

781+249+47％

366

542+175+48％

Net profit per share

46.21

68.38

FX Rate（USD）¥108/$¥108/$

Revenue

Operation profit
Ordinary Profit
Net Profit

3

The summary of the Business Result FY2021 1QT■Revenue 6,589million yen（YOY+631milion yen,+11%）
 Photosensitive Materials Segment: Sales growth mainly thanks toadvanced product such as PAG and polymer
Chemicals Segment: Solvent sales for Electronic application andaroma chemical increased. Logistic business kept high tank operation,
but less movement of goods.
■Operation profit
 760million yen（YOY+166million yen, +28%）
 Although fix cost (YOY +64million yen) for the capacity improvementin photosensitive materials segment increased, the profit increases ascontribution from high-end application■Ordinary profit
 781million yen（YOY+249million yen, +47%）
 Non-operating profit: FX impact, insurance income, less interest cost
■Net profit
 542million yen（YOY+175million yen, +48%）
4Operating profit: factors for increase/decrease• Sales growth more than compensating capacity up investment cost andexpenditure, bring profit increase
Labor /depreciation
cost up in capacityexpansion（Million yen）

+326

+77
Portfolio
Improvement

Sales
growth594

Prev.1Q
Result+22 △144
Operation
Improvement

Inventory
Revaluation△73Fix CostIncrease△42FX
Impact+166760

This 1Q
Result5

Quarterly Sales & Operating profit trend• Quarterly sales & operating profit steadily increasing, achieve historical sales & operating
profit record

4Q→3Q sales shift
due to plant maint.
& expansion works

Investment
coat at Chiba
Plant for capup increased

6Photosensitive Materials Segment
Million yen

Million yen

Revenue
Operating profit

Revenue︓3,680 Million yen（YOY+185 mio yen、+5%）• high-end semiconductor application
keep good sales• Sales for FPD increase a little
Operating profit︓543Million yen（YOY+154 mio yen、+40％）• Although investment cost (labor,depreciation etc.) for the capacity
improvement increased, the profit
increases as contribution of sales
expansion especially high valued
products

7

Chemicals Segment
million yen

Revenue & Operating profit
Revenue
Operating profit

million yen

Revenue︓2,908 million yen（YOY+445mio yen、+18%）• EL solvent for high-end application
and aroma chemicals keep good sales.
• Logistic business （Chemical Tank
Terminal）has less movement ofgood, but keep high tank operation.

Operating profit︓217 million yen（YOY+12million yen、+6%）• High valued product kept good sales

8Profit & Loss Statement• Revenue 6,589 million yen（+631million yen、+11％）• Gross profit 1,518 million yen（+175million yen、+13%）thanks to high valued product sales increase as more thancompensating fix cost up for capacity expansion• Op. profit 760 million yen （+166百万円、+28%）thanks to a little selling expense increase (+1%)。
2020.Mar
1Q

2021.Mar
1Q

Revenue

5,958

6,589

+631

+11%

COGS

4,615

5,070+455+10%

Gross Profit

1,342

1,518

+175+13%

748

757

+9+1%

594

760

+166+28%

Non-Op profit

2059+39+192%

Non-Op Exp.

8339△44△53%

Ordinary profit

531

781+249+47%

Extraordinary P&L△2△11△8△301%

Profit before Tax528769+241+46%

Tax

161

226+65+40%

Net Profit

366

542+175+48%（Million yen)

Selling Exp.
Op. Profit

I/D AMTI/D %［Gross profit +175］
High values product sales
expansion contributed
profitability（22.5%→23.0%）［Non Op profit +39、Non Op exp △44］
Insurance income +35、FX loss △429Balance Sheet• Tangible asset increased +949 million yen due to capacity up investment forphotosensitive materials• In accordance with investment, interest-bearing debt increased +1,616（millionmillionyen）
yen
2020 Mar end 2020 June endI/D AMT
Current
asset
15,503
16,7181,215• 株主資本は+463百万円増加。
CashAccount receivable

Inventories
OthersFixed assets
tangible assets
Intangible assets

Invest/others
Assets total
Liabilities
Account payable
Interest-bearing debt

Other
Net assets
Shareholdersʼ equity
Revaluation & others
Liabilities & Net assets total

3,582
4,654
7,019
246
23,627
22,112407
1,107
39,13028,561
3,000
18,188
7,372
10,56910,563
5
39,130

4,031
4,886
7,111
688
24,56423,062499
1,002
41,28230,245
3,482
19,804
6,957
11,037
11,0261041,282449
231
92442937949
91△1042,152
1,684
482
1,616
△414467463
42,152［Tangible asset +949］
Increased due toinvestment forphotosensitive materials［Equity ratio］
26.7%（Compared toprevious QT△0.3pt）

10

１．Business Results for the 1st QT FY ending 2021 March

２．2021 March ending Projection

３．Appendix

11

FY2021 Mar ending Projection• Raised earnings forecast as consideration of high valued product sales increase and updated business impact byCOVID-19• Original planned FX rate is ¥105/$, dividend keep as 20 yen per share

2Q Cumulative

2020.Sept end
Original（Million yen）

2020.Sept end
RevisedRevenue

12,50012,50000%

Op Profit

1,000

1,150+150+15%

Ordinary Profit

950

1,120+170+18%

Net profit

620

780+160+26%

I/D AMTI/D %Full Year

2021.March end 2021.March end
Original
Revised（Million yen）

I/D AMTI/D %Revenue

25,00025,00000%

Op Profit

1,800

1,950+150+ 8%

Ordinary Profit

1,700

1,870+170+10%

Net profit

1,100

1,260+160+15%
12FY ending 2021 March Business Progress• Keep good progress for original planned 2Q cumulative projection

Sept end
June end
for FY 2021 March For FY2021 MarchResult（Million yen） Original projection

Progress %Revenue

12,500

6,589

53%

Op Profit

1,150760

66%

Ordinary Profit

1,12078170%

78054270%

Net profit

13

（Ref.）Photosensitive Materials Capacity Up Investment•On going capacity up project to meet market demand increasing•Completed capacity up project in the existing plant for FPD and polymer as 1st stepand advanced photosensitive material as 2nd step
•New production plant construction to be completed in 2020 Sept as on going in theplaned schedule.
Current
2018.March end

Photosensitive
Materials for FPD（PAC）

Advancedpolymer
Advanced
Photosensitive
Materials（PAG）

New Plant（New Productionbuilding）

2019 March end

2 nd Half

1st Half

Construction

Qualification& Training

Construction

Qualification& Training

2 nd Half

2020 March end
1st Half 2 nd Half

2021 March end
1st Half 2 nd Half

Operation
start

Operation
startConstruction

Qualification& Training

Operation
start

Design & Construction

Qualification& Training

Operation
start

14

（Ref.）Capital Investment & Depreciation History• In year 2020, capital investment plan is about 5.5 billion yen as same level of previous year
• Depreciation will return to the level for year 2008.
million yen
CAPEX Amount

Capital Investment & Depreciation

Depreciation Amount（Year）

15

１．Business Results for the 1st QT FY ending 2021 March

２．2021 March ending Projection

３．Appendix

16

Corporate Outline■ Establishment︓September 27, 1954

Top
■ Management︓

Yujin Kimura, President■ Paid-In Capital︓ 1,618 Million yen（As of March 31, 2020）■ Net Sales︓

24,455 Million yen（For the year ended March 31, 2020）■ Employees︓

688（As of March 31, 2020）■ Listed Market︓

Tokyo Stock Exchange JASDAQ Market■ Securities Code︓ 4970
17

Site Map

TokyoHyogoAwaji Plant

Head office

Chiba・Chiba Plant

Osaka・Ichikawa Plant
・Takahama Chemical
Tank Terminal
・Aroma Plant
・R&D CenterWest Japan Salesoffice(Shin-Osaka)
18

Origin of company name
Differences between those possessed and those not possessed = Science andtechnology and strategy in Reconstruction of Japan after world war II.
“Our founder wanted to start a business that contributes globally from Asia
based on chemical technology”, then he named it “Toyo Gosei Kogyo”.

A scene of Ichikawa City's Baraki in 1966 (Showa 41). Rice
harvesting.
Under the environment, our founder did self-study about
distillation technology, designed and made distillation towerand boiler.
Source : City Ichikawa Nature Museum

19Management Policy
1. Make what is needed in the times
2. Making something that other companies
cannot make (Global niche top)
3. Research & Development and technology
at the core in the business4. Don't give up, do it simply honestly andsincerely20•Our Business History•Since established in 1954, the Company expanding business in the functional chemicals field byleveraging our strengths in organic synthesis and purification technologies.
•Always estimate market’s need to expand business

1950

1970

Photosensitive
Materials Segment

1990
Organicsynthesis

1954
Company
foundedPhotosensitive
materials
business

Chemicals Segment

Functional
chemicals
business (aromachemicals)
Fine chemicals
business (highpurity solvents)
Logistics
business

1970

1989

•R&D activities
launched

Chiba Plant
opened2003
Highpurification& synthesis
technology•Distillation /refining
technologies

1963•Ichikawa Plant
opened•Liquid chemicalstorage
technologies

2019•Continuously
expanding production
capacity and capability•Aroma chemicals
business division
set upMay 2012•Aroma Chemical
Plant starts
operations•Synthesis
technologies•April 2013
•Awaji Plant
completed1971•Takahama Chemical
Tank Terminal opened

Others

1982
R&D

2010

•Photosensitive
Materials ResearchCenter•opened•Water soluble
2008
photopolymer•Photosensitive•Cell-able
3D celltechnologies
Materials
cultureResearch Centersystem developed
relocated(life sciences field)

1996

21

Business portfolio• 80% sales from IC/FPD/Electronic application
ロジスティック
Logistic

外側︓対⾯市場
内側︓当社の売上⽐率

⾹料材料
Aroma materials

2020 Mar end
revenue
24,455million yenChemical
Segment
42%

Outside: market
Inside: Our sales ratio

Photosensitive
materials
segment 58%

IC・FPD・
Other electronic
application

22

Inside of IC Chip
• Intelʼs IC Chip: Photo of CPU(Central Processing Unit)
1nm=0.000001mm

Line width︓700nm〜20nm
Production Technology︓
65nm node、8 layers Cu wire
# of Transistors︓1.3 billion
Chip area︓435㎟
Level 2 cache︓1MB
Level 3 cache︓16MB
Operating frequency︓3.4GHz
Power-supply voltage︓1.25V
power consumption︓150W（peak）
110W（average）

http://www.eos.ncsu.edu/e115/text.php?ch=6&p=processors

Intelʼs Xeon (Tulsa), Processerʼs function structure(Present on Aug 2006, FSB: 800MHz)

23

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

４．Developing by developer to get thepattern

Photomask(circuit diagram)
Projection lensPhotoresist
substrate

３．Chemical reaction on theexposure area

24Composition of photoresist• Toyo Goseiʼs photosensitive materials are a critical component inphotoresists used to make semiconductors and FPDs.
Commonphotoresist
composition
ratio

AdditivesPhotosensitive materials
PAG: Photo Acid Generator
PAC: Photo Acid Compound
Total 100%

Photoresist (liquid form)*Blended with other materials by photoresist makers

Several% to several tens% for polymer

Polymer（Resist resin、Basepolymer) 〜10％

•Our main products

High-purity organic solvent(PGMEA, EL etc.)25

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

Photoresist
makersPC
Finishedproduct makers

Retailers

Consumers

Panelmakers

LCD panels, TVs

LED bulbs
Digital signage26

Business Overview high-purity solvents
Toyo Gosei’s high-purity solvents are used in various stages of the semiconductor
manufacturing process.

Wafer
cleaning

UV lightexposure

Photoresist
coatingEnlarged
view

Silicon wafer

Photoresist applied byspin coating, baked dry

Exposure
on Photoresist
露光機でパターン露光
patterning

Developer

Removing residue
by striper〜7nm
Complete circuit after emoving
photoresist and other process

Etching pattern using photoresist
pattern as the mask

Develop the exposed
area
27

Semiconductor Market Development & Projection• Since 1980era, information society is driving IC market demand growth.
• In 2020, growth rate will be 0 or minus• Thanks to progress of information communication technology support IC demand
growth, x1.5-2.0 for 2020-2030
World IC Market Sales
2017 result 21.6% growth
2018 result 13.7% growth（WSTS ）2019 projection -12.2% down（WSTS 2019.12）

CAGR 7%2020 projection -4% down（IC Insight 2020.4）

CAGR 5-6%

Source: WSTS & Fuji Chimera Research Institute, IncProjection

28

Down Size by photo lithography• Semiconductor Node (Line Width) continues to be down size, 5nm technology
in mass production now.
• For 2025, 2nm node process is under development• In accordance with line width down size, surging need more high purity
photosensitive materials
Sub 3nmnextgeneration
EUV?

14-10nmArF Multipatterning
20nm
ArF Doublepatterning

10nm
14nm

20nm

7nm

5nm

3nm

2nm

14Å

7nm EUV
3D structure device

28nm
2011

2013

2015

2017

2019

2021

2023

2025

YearSource : IMEC and TGC

29

Photoresist Market Development• EUV photoresist process started mass production in 2019
• EUV photoresist demand growth is estimated x 2.0 in 2021, x1.5 in 2022, x1.2 in 2023 compared
to previous year will overtake KrF photoresist market size in 2021 and ArF photoresist market sizein 2023.

年平均成⻑率100 million yen

CAGR rate

Current

EUV Photoresist︓65.6%
ArF Photoresist︓5.9%

KrF Photoresist︓2.5%Result

Estimation

Projection Projection Projection

Projection Projection Projection

Source: Fuji Chimera Research Institute, Inc「Å（オングストローム）半導体プロセス材料／技術の展望調査（2018年7⽉）」より当社作成

Projection

30

FPD Market Trend•FPD market continue to grow as CAGR 3%•High end FPD combined LCD（4K&8K）& OLED shows higher CAGE, 8.6％,
then it will be count as 70% of total in 2026.
Demand outlook for FPDs (surface area)→Projection

OLED
LCD 4K&8K
LCD

FPD
2015→2019︓30% growth
CAGR︓5.4%

LCD（4K&8K）
2015→2019︓x3.2
CAGR︓33.1%

Total FPD
2019→2026︓26% growth
CAGR︓3.0%

LCD（4K&8K）
2019→2026︓77% growth
CAGR︓7.4%

OLED
2019→2026︓ x2.8
CAGR︓18.4%

Source︓IHS Marketing31

Key demand driver for Photosensitive Materials/ EL Solvent
Demand for photosensitive materials will be driven by market growth, and by the need for new types ofmaterials as semiconductor and display technologies become more advanced.

TVLCDs
Display
applications
OELDs

Photosensitive
material
demandSmartphones
Smartphones

Flash (multilayer)
MemorySemiconductor
applications

Higher resolution

SSDs

DRAM

Logic

Multiple core /multiple layerSensors

IoT32

Outlooks: Photosensitive materials Application, Wave length and Line Width• Continue down size of photoresist line width need EUV process• Started mass production supply for EUV materials in 2019
• TGC continue to improve quality of photosensitive materials and diversifying product line up to＝stagnant
satisfy customerʼs needs＝growing
FPD
g＋ｈ＋ｉline

I lineICG line

I lineKrF

ArF

Node〜〜〜700nm 〜200nm 〜110nm 〜65nm
2,000nm 1,000nm

Application

Small & Mid
size Panel

TV, PC

Smart phoneand etc.

MarketStagnant

Stagnant
andgradually
growth

IGBT、LCD driver、LED

Immersion

ArF
DP〜45nm

〜22nm

ArF

DRAM/NAND memory（recovery in 2020 as projection）

Back-end process materials
Advanced logic LSI⇒ steady
CMOS sensor
Graduallygrowth

expanding

TGC
Poducts

Photo Active Compound (PAC）
EL high purity solvents

stagnant steady

expanding

ArF
MP
EUV
〜7nm

〜5nm

〜2nm︖

New generation DRAM（2020〜）
New Generation Logic LSIStart EUV process in production

CAPEX in progress

R&D

Photo acid generator（PAG）
Polymer
EL Ultra high purity solvents33

Photosensitive Materials Capacity Up Investment•On going capacity up project to meet market demand increasing•Completed capacity up project for the existing plant as plan. After customersʼ qualification process,starting products shipment from new line accordingly.
• New production plant construction to be completed in 2020 as on going in the planed schedule.

Current
FY2018.3

Photosensitive
Materials for FPD（PAC）

Advanced polymer

Advanced
Photosensitive
Materials（PAG）

New Plant（New Productionbuilding）

FY2019.3

1H

1H

Construction

Qualification &Training

Construction

FY2020.3
2H

Qualification &Training

FY2021.3

1H

2H

Qualification &Training

Operationstart

1HFY2022.3
2H

1H

2H

Operation
start

Operation
startConstruction

Design & Construction

Qualification &Training

Operation
start

34

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

出所︓Leffingwell & Associates35Business Overview Chemicals (Aroma Chemicals)
Aroma chemical flow from raw materials through to finished products

Raw materials

Process

Plants,flowers,
seeds, fruit,
leaves, bark,resin, etc.

Press
Extract
DistilAnimals
Dairy, meat,
fish

RefineSynthetic raw
materials
Pulp- andalcoholbasedmaterials, etc.

Synthesize

Base material

RefineNaturalaromatics

IsolateRefineProcess

Processing
Solubilization
Powderization
Emulsification

Products

Applications

Flavors(Foodflavorings)

ConfectionaryBeverages
Frozendesserts
SnacksHam
Sausages
Tooth paste
Cigarettes, etc.

Fragrances(Cosmeticfragrances)

PerfumeCologne
Cosmetics
Soap
Detergent
Shampoo
Air freshener
Solvents, etc.

Blend

Syntheticaromatic

Ourbusinessdomain36

Logistic Business (Advantage of Takahama Chemical Oil terminal)• Toyo Goseiʼs chemical logistics terminal distributes
liquid chemicals made in Japan or overseas toplants across the Kanto region-biggest chemicals
distribution hub as largest shipment volume inTokyo 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
Terminal has 65 bonded storage tanks with various volumes,
capable of holding chemicals with different grades and properties• Prime location close to expressway network (abouta few minutes from Chidoricho IC) shorted delivery
time to northern Kanto area where are major
chemical users located. Possible to three rounddelivery a day is appreciated by customers inshortage of tank lorry driver.

• Strict regulations in the Fire Service Act make it
difficult for new competitors to establish newReceives 70 vessels per month Largest shipment volume inoperations in the Tokyo Bay area
the Kanto region: 80-100 Tank
lorry car per day37

Logistic Business model①Liquid chemicals made in Japan oroverseas coming to Takahama bychemical tanker② Transfer chemical totank from tanker③ Storage at tank

④ Transfer chemicals to tank lorry
and other package from tanks⑤Deliver to users in Tokyo
metropolitan area

38Completion of New Expressway contribute turnover rate
• Completion of Tokyo-Gaikan Expressway in 2018 further improved transport access to northern Kanto area asshortening delivery time
• # of Round trip per day increased which contribute higher operation rate at Takahama chemical oil terminal

39独創的な視点で世界へ
Individual Development, to the global Chemical(Notes regarding projection)
The earnings forecasts in this document are estimation based on the information
currently available and the judgment obtained from the news so far.
Therefore, the actual business results may differ significantly from this business forecast
due to various factors and risks.
There is a possibility that it will be, and we do not make any commitments orguarantees.