FY2020 1st HalfBusiness Results(April 1, 2020-September 30, 2020)
November 6, 2020

“Our lifeline is existing inResearch &Development”“Our challenge tosomething we have notseen the shape whichhave not appeared
yet so far.“Masateru Kimura
founder & Honorary chairman
Passed away on September 29, 2020
at the age of 90.

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FY2020 1st Half Financial Results• As beginning of this term, very much concerned about business slow down due to COVID19. But thanks to increasing demand from staying at home and continuous investment for
high-end semiconductor field , our revenue and profit achieved better as YOY andcomparison with our projection• Revenue was 12,835million yen (YOY+646millon yen、+5%）• Profit: Operation profit 1,306million yen（+138million yen、+12%）、Ordinary profit 1,277million
yen （+212millon yen、+20%）、Net profit 865million yen（+171 million yen、+25％）（Million yen）

FY2019 2Q
ResultFY2020 2Q
Projection

YoY
FY2020 2Q
ResultAMT I/D

12,18912,500 12,835

Operation profit

1,168

1,150

Ordinary Profit

1,064Net Profit%

Comparison withProjection
AMT I/D%

+646

+5％

+335+3%1,306+138+12％+156+14%

1,120

1,277+212+20％+157+14%

693

780

865

+171

+25％

+85+11%

Net profit per share

87.37

98.27

109.04

Interim dividends
per share

10.00

10.00

10.00

FX Rate（USD）¥108/$¥105/$¥106/$

Revenue

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The summary of FY2020 1H Financial Results■Revenue 12,835 million yen（YoY +646 million yen, +5%）
 Photosensitive Materials:
Increased sales for high end semiconductor application products such
PAG and Polymer Chemicals:Electronic materials and Aroma related products increased
Logistic (Chemical Tank Terminal business) was stagnant due totemporally commodity solvents demand slow down impacting goods turnaround. But now getting recovery.
■Operation profit
 1,306 million yen（YoY +138million yen, +12%）
 High valued product sales in both business segment well compensated prior cost
increase for photosensitive material capacity up cost about 200million yen, then marked
better profit.
■Ordinary Profit
 1,277 million yen（YoY +212 million yen, +20%）
 Non-operation profit and loss: 30million yen expenditure mainly due to interest paid for
debt for continues capacity up investment. As comparison with previous year, loss
reduction by 73million yen mainly thanks to FX loss and insurance income.
■Net Profit
 865 million yen（YoY +171 million yen, +25%）

4Change Analysis: Operating Profit• Sales expansion and high valued product businessincrease contributed better profit as compensating fix
cost increase for business growth investment+194

Operation
Improvement

+337

1,168

Portfolio
Improvement
Sales growth2020.3 2Q
Result+34-144-220

Inventory
Revaluation

Cost up in capacityexpansion
FX: 2020.3 2Q ¥108/$2021.3 2Q ¥106/$-63
Fix Cost
Increase

1,306FX+138
2021.3 2QResult5Quarterly Sales & Operating profit trend• Sales and profit level steadily developing （CAGR9.0%）• But debt is also increasing due to continuous investment（explain in late part）+5.0%+11.9%+6.4%+13.2%

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

Investment coat at
Chiba Plant for cap-up
increased

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Photosensitive Materials Segment
Million yen

Million yen

Revenue
Operating profit

Revenue: 7,336 million yen（YoY +158 million yen, +2%）
• Products for Advanced semiconductormaterials (EUV, ArF) are continuouslyrobust.

Operation profit: 881 million yen（YoY +44 million yen, +5％）
• Increased labor cost and depreciation forthe production capacity up investment,
but high valued product sales increase
well compensate it and resulted in profit
increase

Capital Investment:• New production building completed on
October 19, 2020.
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Chemicals Segment
Million yen

Million yen
Revenue

Operating profit

Revenue: 5,499 million yen（YoY +487 million yen, +10%）• EL materials and Aroma related products
increased• Chemical Tank Terminal business wasstagnant due to temporally commodity
solvents demand slow down impacting
goods turn around.

Operating Profit: 424 million yen（YoY +93million yen, +28%）• EL material business is accelerating to shift
toward to high valued product business• Aroma business resulted in profit increase inline with sales volume increase8

FY2020 1H Profit & Loss Statement• Revenue 12,835 million yen（+646 million yen, +5％）
• Gross profit improved thanks to high valued product sales expansion and it compensated cost up
for production capacity up, then resulted in 2,919 million yen（+215 million yen, +8%）

（Million yen）

2020.32Q

2021.32Q

AMT I/D%

12,18912,835+646+5%

9,485

9,916+430

+5%

2,703

2,919+215+8%

Selling Exp.

1,535

1,612+76+5%

Operating profit

1,168

1,306+138+12%

Non-Op profit

3469+35+103%

Non-Op Exp.

13798-38-28%

Ordinary profit

1,064

1,277+212+20%

Extraordinary P&L-33-16+17+51%

Profit before Tax

1,031

1,261+230+22%

Tax

337

396-58+17%

Net profit693865+171+25%

Revenue
Cost of sales
Gross profit［Gross profit +215］
Thanks to high valued
product sales, GP wasimproved (22.2%→22.7%）

Insurance income +35,FX loss 299

FY2020 1H Cash Flows Statement• Operating Activities: 2,165million yen (+519millon yen, +32%)
Sales expansion with profit increase and WIC improvement contributed Op CF improvement for ourinvestment activites• Investing Activities: -4,729million yen due to mainly photosensitive material capacity up investment• Financing Activities: 2,711million yen as securing the investment fund2020.3 2021.3
AMT I/D
2Q
2Q
Net cash provided by operating activities
1,645
2,165+519
Profit before income taxes
1,031
1,261+230
Depreciation and amortization
1,063
1,087+24
WIC management
Account receivable variance (+decrease）
64581+517
improvement
Inventories Variance (+decrease)
-340
-507
-167
Accounts payable variance (+increase）
-344
356
+700
Other
172
-613
-785
Continue photosensitive
Net cash used in investing activities-3,293 -4,729-1,436
materials capacity up
Free Cash Flows
investment-1,647 -2,564-916Net cash provided by financing activities-499
2,711+3,211
Effect of FX rate change on cash and cash
equivalents-30-16+13

Net variance in cash and cash equivalents-2,1772,822

1303,301+2,308+478

Cash and cash equivalents at end of period

10FY2020 1H end Balance Sheet• Because of photosensitive materials capacity up project, increased fixed assets by +1,227million yen and interest
bearing debt by +2,856 million yen, then interest bearing debt was 21,044 million yen. Working for production utilization
improvement to meet future demand increase for high valued products• Shareholders’ equity increased by 785million yen thanks to net profit and equity ratio became 27.7%（+0.7pt）(million yen)2020.3 end 2021.9 end
AMT I/D
Current assets
15,50316,011+508
Cash and cash equivalents
3,582
3,713+130
Trade receivables
4,654
4,073-581
Inventories
7,019
7,527+507
Other
246
697+451
Fixed assets
23,627
24,996+1,369Tangible fixed assets
22,112
23,340+1,227
Invisible fixed assets
407
484+77
Increased due toInvestments and other assets1,107
1,171+64
photosensitive materials
Total assets
39,13041,008+1,878
capacity up investment
Liabilities
28,56129,640+1,079
Accounts payable
3,000
3,356+356
Interest-bearing debt
18,18821,044+2,856
Others7,372
5,238-2,133
Net assets
10,56911,368+798
Shareholders' equity
10,563
11,349+785 ［Equity ratio］
Valuation and translation adjustments
518+12 27.7%（YoY +0.7pt）
Total liabilities and net assets
39,13041,008+1,878112021 March ending Projection

Photoresist Market Development• EUV photoresist: trial to mass production in 2018, after 2019 volume sale will start• EUV photoresist will overtake KrF photoresist market size in 2021 and ArF photoresist market
size in 2023.
年平均成⻑率100 million yen

CAGR rateCurrent

EUV Photoresist︓65.6%
ArF Photoresist︓ 5.9%

KrF Photoresist︓ 2.5%

ResultEstimation Projection 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

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Composition of photoresist• Toyo Gosei’s photosensitive materials are a critical component in photoresists used tomake semiconductors and FPDs.
Commonphotoresist
composition ratio

Additives

Potosensitive materials
PAG: Photo Acid Generator
PAC: Photo Active Compound
Several% to several tens% for polymer

Photoresist (liquid form)

Total 100%

*Blended with other materials by photoresist makers

Our main products

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

Polymer（Resist resin、Basepolymer) 〜10％14

The Global Niche Top Companies Selection for 2020
• The Ministry of Economy, Trade and Industry selected TGC as one of 113 companies(chemicals and materials) for the Global Niche Top Companies Selection 100 list for the2020 fiscal year.
• TGC is recognized to has top class market share in photosensitive materials global
market with unique high quality product development.

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Capital Investment, Depreciation, & R&D• Under EL materials market demand growth, production capacity expansion investment
continue since 2017
• FY2020 investment spending projection is about 5.5billion yen mainly for new plant
construction as same level as previous year spending(Million yen)
CAPEX AmountCAPEX & Depreciation
Depreciation AmountR&D Amount

（FY）

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Photosensitive Materials Capacity Up Investment
AdvancedPhotose
nsitive Materials（PAG）
New Plant(New Productionbuilding)

2019.32H
Construction

2020.3
1HQualification

Design2H

2021.3
1HNow
2H

2022.3
1H

2H

Operation
startConstruction

Qualification

Operationstart

製品認定・トレーニング

 New plant (4th photosensitive materials plant in Chiba plant site) completed on October 18, 2020
 FY2020 2nd half is product qualification activity period, profit contribution will start from next Financial year.

17Fixed cost up by production capacity expansion• Due to mainly continuous photosensitive materials capacity up investment, fixed cost
increased by about 200million yen compared to last half.
• It will increase by about 600million yen in 2nd half compared to 1st half.

Fixed cost transition image+600
million yen+120
million yen

2020.3 1H+200
million yen

2020.3 2H

2021.3 1H

2021.3 2H

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Projection for FY 2020
• All profit resulted in robust progress compared to the projection• Fixed cost increased by about 800 million yen YOY and it will increase by about 600
million yen from 1st half to 2nd half.
• Products (photosensitive materials and chemical) for Advanced semiconductor
application will mainly contribute revenue up• FX rate set ¥105/$, dividend per unit is 20 yen as same as our previous announcement（million yen）

2021.3
Projection

2020.9ResultProgress %25,00012,83551%

Operating profit

1,950

1,30667%

Ordinary profit

1,870

1,277

68%

Net profit

1,260865

69%

Net profit per share

158.75109.04¥105/$¥106/$

Revenue

FX Rate（USD）

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Business environment and demand situation• Almost no negative impact from COVID-19 related risk son far• However uncertain will continue on geopolitical risk and COVID-19
related risk
① Advanced IC market（KrF、ArF、EUV）
 Both memory and logic will keep good growth (photosensitive materials and ELsolvent) Robust investment for advanced semiconductor will continue② Commodity IC market（g-I line）
 Under stagnant market situation impacted by COVID-19, but sign for recovery such as
automobile production in China③ FPD market
 Keep steadily demand increase from FPD surface area growth for coming few④ Aroma Chemicals
 Continue robust demand mainly coming from toiletry application⑤ Chemical tank terminal
 Under investment adjustment, but demand tend to recovery. Keep high tankutilization rate.

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TGC300 Progress (Mid-term business plan)• “TGC300” as mid-term business plan target: 30billion revenue, 3billion ordinary
profit and 10% ordinary profit per revenue in FY2023 March is kept as original plan

• Good progress for EL materials capacity up
investment and business expansion as plan

ordinary profit % New photosensitive plant completed
on Oct. 2020

Revenue• Continue to make best effort by all
employee and management together toachieve our business target in mid-termbusiness planOrdinary profit（Plan）（Plan）

Medium term plan21Individual Development, to the global Chemical