Supplementary Materials forConsolidated Business Performancefor the First Three Quarters of FYE2019

February 5, 2019TAIYO NIPPON SANSO Corporation
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Contents
１. Business Performance for the First Three Quarters of FYE2019
1) Overview of business performance2) Business performance by segment
２. Full-Year Forecasts for FYE2019
1) Overview of forecasts for the full-year2) Forecasts by segment for the full-year
３. Reference Materials
1）Statement of non-recurring profit and loss2）Key performance indicators
3）Sales mix by industry
4）TNSC’s Gas Supply Structure21-1. Overview of business performance(Billions of yen)

FYE2018
Q3 Results
MarginRevenue

471.4

FYE2019
Q3 Results

YoY Change

Margin

518.0

+46.6
+9.9%

Core operating income

45.7

43.8

Non-recurring profit and loss

0.5

0.8

+0.3

Operating income

46.2

44.6

-1.6

Finance costs

-2.6

-2.4

+2.0

Income before income taxes

43.6

42.2

-1.4

Income tax expenses

-2.4

-13.1

-10.7

Net income

41.2

29.0

-12.2

39.9

27.2

-12.7

9.7%

-1.9
8.5%

9.8%

-4.0%

8.6%

-3.4%

(Attribution of net income)Net income attributable to ownersof the parent

8.5%

5.3%

-31.9%+0.5
Net income attributable to non-controlling interests
1.21.7
Impact of foreign currency translations(US$→¥) : FYE2018 Q3 rate: $1=¥111.77 FYE2019 Q3 rate: $1=¥111.33 (EUR→¥) FYE2019 Q3 rate: €1=¥127.00→Impact of currency gains led to decreases of ¥2.1 billion in revenue and ¥0.2 billion in core operating income
European business acquisition-related expenses (advisory fees, etc.) of ¥2.8 billion have been recorded
for the First Three Quarters of FYE2019.
In FYE2018 Q3, income tax expenses decreased by ¥11.7 billion due to the reversal of deferred tax
liabilities at a subsidiary based in the U.S.

31-1. Overview of business performance【Revenue】
FYE2018
Q3 Results

FYE2019
Q3 Results% Change

Gas Business in Japan*1

248.3

265.9+7.1%

Gas Business in the U.S.

128.5

138.8+8.0%

Gas Business in the Europe*2-12.6-

Gas Business in Asia and Oceania

74.8

78.8+5.4%

Thermos Business *1

19.6

21.6+9.9%

Revenue Total

471.4

518.0+9.9%

FYE2018
Q3 Results

FYE2019
Q3 Results% Change

Gas Business in Japan*123.521.3-9.4%

Gas Business in the U.S.

10.0

10.5+5.0%

Gas Business in the Europe*2-0.5-

Gas Business in Asia and Oceania

7.2

8.5+17.7%

Thermos Business *1

6.4

7.2+12.4%

Eliminations or Corporate*-1.5-4.3－

Core operating income Total

45.7

43.8-4.0%

Non-recurring profit and loss

0.50.8－Operating income Total

46.2

44.6

-3.4%

(Billions of yen)

【Operating income】(Billions of yen)

* In its FYE2019 Q3 results, expenses related to the acquisition of the European business (advisory costs, etc.) of ¥2.8 billion have been included under “Eliminations or Corporate.”*1 From FYE2019, businesses other than the Thermos business that had previously been classified under the “Thermos and Other Businesses”

segment have beentransferred to the “Gas Business in Japan.” .The columns in the above table have been adjusted to reflect the transfer in order to use the same basis of comparison.
*2 From the FYE2019 Q3, the business performance of the European business acquired from U.S. company Praxair, Inc. will be presented as the new segment,

4“Gas Business in Europe.”

1-2. Business Performance by Segment: Gas Business in Japan(Billions of yen)

Industrial Gas

RevenueElectronics

EnergyFYE2019

Q3 Results

Q3 Results% Change

Bulk gases

61.1

61.4

+0.6%

On-site gases

40.4

52.4

+29.6%

Packaged gases

8.5

8.5

-0.1%

Hard goods

17.3

19.6

+13.1%

Plants and Equipments

29.2

30.4

+4.3%

Medical

16.1

18.0+11.3%

Total

172.8

190.5

+10.2%

Gases

36.7

35.2

-3.9%

Equipment and Installation

16.8

17.2

+2.2%

Total

53.5

52.4

-2.0%

LP gas

19.8

20.7

+4.6%

Related Equipment

2.1

2.2+2.7%

Total

21.9

22.9+4.4%

Revenue Total

248.3

265.9+7.1%

23.5

21.3

-9.4%

Segment income

Reasons for changes in revenue
・ On-site: JFE SANSO CENTER Kurashiki Factory
contributed to revenue
・ Hard goods: Favorable sales of laser cutting machine formetal processing
・ Medical: Contribution from acquisition of IMI Co., Ltd.
・ Electronics-related: Electronic materials gas shipments
declined
5FYE2018

Reason for change in segment income
・ Higher costs due to rising fuel prices
・ Higher costs mainly due to a lack of a raw material gas
for carbon dioxide gas
・ Medical: Contribution from acquisition of IMI Co., Ltd.
・ Electronics-related: Earnings declined due decline inelectronic materials gas revenue

1-2. Business Performance by Segment: Gas Business in the U.S.
FYE2018
Q3 Results(Billions of yen)

Industrial Gas
RevenueElectronics

FYE2019
Q3 Results% Change

Bulk gases

52.1

57.9

+11.1%

On-site gases

6.6

7.1

+7.7%

Packaged gases

37.1

37.8

+1.9%

Hard goods

24.1

26.8

+11.1%

Total

120.0

129.7

+8.0%

Gases

5.6

5.2

-6.2%

Equipment and Installation

2.8

3.8

+34.5%

Total

8.5

9.1+7.6%

128.5

138.8+8.0%

10.0

10.5+5.0%

Revenue Total
Segment income※Impact of yen appreciation on currency translations
Revenue decreased by ¥0.5 billion and segment income by ¥0.0 billion

Reasons for changes in revenue
・ Bulk gas: Favorable shipments of air separation gases

・ Industrial gas-related business: Generally favorable

・ On-site: Start of operation at new project

Growth in earnings due to higher revenues in bulk,

・ Hard goods: Favorable sales for the construction andon-site, and packaged gases, and hard goodsenergy industry

6Reason for change in segment income

1-2. Business Performance by Segment: Gas Business in the Europe
FYE2019
Q3 Results(Billions of yen)

Revenue Total

12.6

Segment income

0.5• The FYE2019 3Q results are the business performance of the European business acquired from U.S.
company Praxair, Inc. in December 2018.
• The FYE2019 3Q results include the following amounts based on provisional values for purchase priceallocation: ¥0.8 billion increase to cost of sales due to market price evaluation of inventories (FYE2019
Q3 only), and ¥0.8 billion in expenses as an increase in depreciation and amortization expenses onproperty, plant and equipment and intangible assets.
*From FYE2019 3Q, the business performance of the European business acquired from U.S. company
Praxair, Inc. will be presented in “Gas Business in Europe.”71-2. Business Performance by Segment: Gas Business in Asia and Oceania
FYE2018
Q3 Results(Billions of yen)

Industrial Gas
RevenueElectronics

FYE2019
Q3 Results% Change

Bulk gases

26.6

30.9

+16.3%

On-site gases

2.1

2.3

+5.8%

Packaged gases

4.1

4.0

-1.9%

Hard goods

4.03.7-8.6%

Plants and Equipment

9.1

11.3+23.8%

Total

46.1

52.3

+13.5%

Gases

23.7

22.3-5.9%

Equipment and Installation

4.9

4.1-15.8%

Total

28.6

26.4-7.6%

Revenue Total

74.8

78.8

+5.4%

7.2

8.5

+17.7%

Segment income※Impact of yen appreciation on currency translations
Revenue decreased by ¥1.6 billion and segment income by ¥0.2 billion

Reasons for changes in revenue◆Industrial gas-related business・ Favorable sales of safety goods at Leeden NOX・ Australia: Sales of LPG and related equipment werefavorable◆ Electronics materials gas
・ Strong shipments of electronic materials gases, despite adecline in revenues due to the impact of changes inaccounting treatment

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Reason for change in segment income◆Industrial gas-related business・ Higher segment income due to increased revenue atLeeden NOX・ Increased segment income from China and Philippine◆Electronics materials gas
・ Increased segment income due to higher revenue fromelectronic-materials gases

1-2. Business Performance by Segment: Thermos Business
FYE2018
Q3 Results(Billions of yen)

% ChangeJapan

16.7

16.9

+1.7%Asia

2.94.6+57.0%

Revenue Total

19.6

21.6+9.9%

6.4

7.2+12.4%

ThermosRevenue

FYE2019
Q3 ResultsSegment income※Impact of yen appreciation on currency translations
Revenue increased by ¥0.0 billion and segment income by ¥0.0 billion

Reasons for changes in revenue
・Japan: Recovery in sales of portable mugs andsport bottles due to sales promotion
・Overseas: Favorable sales in South Korea

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Reason for change in segment income
・Japan: Recovery from Q2 onward due to salespromotion
・Overseas: Increased earnings due to higher revenue
in South Korea, earnings growth at group companies
accounted for by the equity-method

2-1. Full-Year Forecasts for FYE2019(Billions of yen)

FYE2018
Results
MarginRevenue

646.2

FYE2019
Forecast(Announced Feb. 5)
Margin735.0

YoY Change% Change+88.8

FYE2019
Forecast(Announced May. 9)
Margin670.0+13.7%

Core operating income

60.0

66.5
9.3%

+6.5
9.0%

640

+10.8%

9.6%

Non-recurring profit and loss

-0.1

0.5

+0.6

0.5

Operating income

59.8

67.0+7.2

64.5

9.3%

9.1%

+11.9%

9.6%

Finance costs-3.9-5.5-1.6-4.5

Income before income taxes

55.8

61.5

+5.7

60.0

Income tax expenses

-5.1

-18.5

+13.4

-18.0

Net income

50.7

43.0

-7.7

42.0

Net income attributable to owners ofthe parent

48.9

41.0

-7.9

40.0

Net income for the year attributable to noncontrolling interests

1.8(Attribution of net income)

7.6%

5.6%

2.0

-16.2%+0.2

Assumed exchange rate (US$→¥): $1=¥110 (EUR→¥): €1=¥125 *FYE2018 rate: $1=¥110.70
In FYE2018, income tax expenses decreased by ¥12.2 billion due to the reversal of deferred taxliabilities at a subsidiary based in the U.S.

106.0%

2.0

2-2. Full-Year Forecasts for FYE2019 by Segment【Revenue】
FYE2018
Results(Billions of yen)

FYE2019
Forecast% Change(Announced Feb. 5)

FYE2019
Forecast(Announced Oct. 31)

Gas Business in Japan

345.0

365.0

+5.8%

355.0

Gas Business in U.S.

172.6

185.0+7.2%

181.0

Gas Business in Europe-52.0--

Gas Business in Asia and Oceania

103.1

104.0

+0.8%

107.0

Thermos Business *1

25.3

29.0

+14.4%

27.0

Revenue Total

646.2

735.0

+13.7%

670.0FYE2018
ResultsFYE2019
Forecast% Change

FYE2019
Forecast*1【Operating income】(Billions of yen)

(Announced Feb. 5)(Announced Oct. 31))

Gas Business in Japan

31.3

29.6-5.7%

30.3

Gas Business in U.S.

13.5

14.6+7.7%

14.4

Gas Business in Europe

-6.3

--

Gas Business in Asia and Oceania

9.2

11.0+19.1%

12.1

Thermos Business *1

7.7

9.5

+22.6%

9.0

Eliminations or Corporate*-1.8-4.5－-1.8

Core operating income Total

60.0

66.5

+10.8%

64.0

Non-recurring profit and loss

-0.1

0.5－0.5

Operating income Total

59.867.0+11.9%

64.5*1* FYE2019 forecast for “Eliminations or Corporate” includes ¥2.8 billion in acquisition-related expenses for the European business (advisory costs, etc.)*1 From FYE2019, businesses other than the Thermos business that had previously been classified under the “Thermos and Other Businesses” segment have beentransferred to the “Gas Business in Japan” segment.
The columns in the above table have been adjusted to reflect the transfer in order to use the same basis of comparison.

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(Reference Materials)

12Non-recurring Income and Expense ItemsFYE2018
Q3 Results

FYE2019
Q3 Results

YoY changeCore operating income

45.7

43.8

-1.9

Non-recurring profit and loss

0.5

0.8+0.3

Operating income

46.2

44.6

-1.6

(Billions of yen)【Non-recurring Income and Expense Items】
FYE2018 Q3 Results
Item13

FYE2019 Q3 Results
Amount(Billions of yen)

Item

Amount(Billions of yen)

Gain on sales of domestic land

1.0 Gain on sales of domestic land

+0.9

Share of loss of associates and joint
ventures accounted for using theequity method of THERMOS K. K.

-0.5 Other-0.1

Total

0.5 Total

0.8Key Performance Indicators (Consolidated)
FYE2018
Q3 Results

FYE2019
Q3 Results

FYE2018
Results

FYE2019
Forecast

Basic earnings per share (Yen)

92.38

62.93

113.04

94.74

Overseas sales ratio

43.8%

45.4%

43.3%

47.2%

ROE

－－

13.3%

10.4%

ROCE

－

－

8.4%

6.3%

Annual dividends per share (Yen)

－－

23

24

Dividend payout ratio

－－

20.3%

25.3%

Capital expenditures

43,06552,57962,56972,0002,930

649,437

4,556－

32,25236,881

43,26656,000348,516

1,011,415

326,959

1,010,000

299,657

927,750

274,968

961,000(construction base)(Millions of yen)

Investments and loans(Millions of yen)

Depreciation and amortization(Millions of yen)

Balance of interest-bearing liabilities(Millions of yen)

Net interest-bearing liabilities(Millions of yen)With regard to FYE2018 full-year results, excluding the effects of the significant decrease in income taxes resulting from the reduction of
the federal corporate income tax rate under the Tax Cuts and Jobs Act in the U.S., basic earnings per share would be ¥84.87, ROE
10.1%, ROCE 8.5% and the dividend payout ratio 27.1%.

14Sales Mix by Industry【Sales Volume Mix by Industry】
1%
Steel and other metals

68%

Oxygen17%

38%

Nitrogen

25%

44%

Argon
0%

10%

20%

3%
30%

40%

20%

17%
50%

4%

18%
60%

70%

13%

2%

ChemicalsElectronic equipment &semiconductors
Shipbuilding, machinery,transportation equipment
Others

13%

18%
80%

90%

100%

【Net Sales Mix by Industry】
Steel and other metals

Separate
Gases(O2, N2, Ar)

29%

13%

Total Sales

0%

10%

22%

11%
20%

21%
30%

10%

9%
40%

* The scope of data collection excludes the Gas Business in Europe segment.

1517%

50%

23%

ChemicalsElectronic equipment &semiconductors
Shipbuilding, machinery,transportation equipment
Others

47%
60%

70%

80%

90%

100%

TNSC’s Gas Supply Structure
Separate gases

Supplied via pipeline(on-site)
OxygenNitrogen

CEArgonEvaporator

Tanker trucks(bulk gases)
OxygenArgon

NitrogenAir separation unit (ASU)
OxygenNitrogen

Argon

Filling station
Packaged gases

Supply via cylinders(packaged gases)

Other gases
OxygenNitrogen

Argon

Supply via tanker trucks, cylinders(bulk and packaged gases)
Chemicalplant offgas

Import fromoverseas incontainers, etc.

Carbondioxide gas

HydrogenHeliumLPG

Specialty
gases

Acetylene

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Packaged gases
Dewar
vessel(liquid)

Customers

Carbondioxide gas

HydrogenHeliumLPG

Specialty
gases

Acetylene

・Steel andnonferrous metals
・Electronics
・Petroleum andchemicals
・Automobiles andindustrial
machinery・Glass and paper・Medical care・Food・Other

Disclaimer●These materials are not intended for purposes of disclosure for securities
transactions, and it is impossible to guarantee that the information containedin this presentation is accurate and complete.
●This presentation and report contain forward-looking statements(estimates and forecasts) regarding the future plans, strategies, activities
and performance of Taiyo Nippon Sanso Corporation. Forward-looking
statements reflect management’s assumptions and beliefs based on
information available as of the time of writing. Actual results reflect a varietyof risk and uncertainties. These risks and uncertainties include, but are notlimited to, changes in general economic and specific market conditions,currency exchange rate fluctuations, tax systems, and regulations.
●Accordingly, actual results may differ from forecasts issued at this time.
With this in mind, please refrain from relying solely on these materials when
making investment decisions.

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