BofA Securities ｜ 2021 Japan Conference
Corporate Presentation
September 7, 2021[JST]Tokyo (Japan) with Texas (the United States)

Important Notice
For the purpose of this notice, “presentation” means this document, any oral presentation, any question and answer session and any written or oral material discussed or distributed by
NIPPON SANSO Holdings Corporation (“NSHD”) regarding this presentation. This presentation (including any oral briefing and any question-and-answer in connection with it) is notintended to, and does not constitute, represent or form part of any offer, invitation or solicitation of any offer to purchase, otherwise acquire, subscribe for, exchange, sell or otherwise
dispose of, any securities or the solicitation of any vote or approval in any jurisdiction. No shares or other securities are being offered to the public by means of this presentation. This
presentation is being given (together with any further information which may be provided to the recipient) on the condition that it is for use by the recipient) on the condition that it is for use
be the recipient for information purposes only (and not for the evaluation of any investment, acquisition, disposal or any other transaction). Any failure to comply with these restriction may
constitute a violation of applicable securities laws. The companies in which NSHD directly and indirectly owns investments are separate entities. In this presentation, “NSHD” is sometimes
used for convenience where references are made to NSHD and its subsidiaries in general. Likewise, the words “the Company”, “we”, ”us” and “our” are also used to refer to subsidiaries ingeneral or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies.
●Forward-Looking Statements
This presentation and any materials distributed in connection with this presentation may contain forward-looking statements, beliefs or opinions regarding NSHD’s future business, future
position and results of operations, including estimates, forecasts, targets and plans for NSHD. Without limitation, forward-looking statements often include words such as “targets”, “plans”,“believes”, “hopes”, “continues”, “expects”, “aims”, “intends”, “ensures”, “will”, “may”, “should”, “would”, “could”, “anticipates”, “estimates”, “projects” or similar expressions or the negative
thereof. These forward-looking statements are based on assumptions about many important factors, including the following, which could cause actual results to differ materially from thoseexpressed or implied by the forward-looking statements: the economic circumstances surrounding NSHD’s global business, including general economic conditions here and abroad;competitive pressures and developments; changes to applicable laws and regulations; the success of or failure of product development programs; decisions of regulatory authorities and thetiming thereof; fluctuations in interest and currency exchanges rates; claims or concerns regarding the safety or efficacy of marketed products or product candidates; the impact of healthcrises, like the novel COVID-19 pandemic, on NSHD and its customers and suppliers, including foreign governments in countries in which NSHD operates, or on other facets of its business;
the timing and impact of PMI (post-merger integration) efforts with acquired companies; the ability to divest assets that are not core to NSHD’s operations and the timing of any suchdivestment(s); and other factors identified in NSHD’s most recent annual Consolidated Financial Statements on Japanese Securities relevant acts and exchange commission, available on
NSHD’s website. NSHD dose not undertake to update any of the forward-looking statements contained in this presentation or any other forward-looking statements it may make, except as
required by law or stock exchange rule. Past performance is not an indicator of future results and the results or statements of NSHD in this presentation may not be indicative of, and are notan estimate, forecast, guarantee or projection of NSHD’s future results.
● Certain Non-IFRS Financial Measures
This presentation and materials distributed in connection with this presentation include certain financial measures not presented in accordance with International Financial ReportingStandards (“IFRS”), such as Core Operating Income, EPS (Earnings per share), Debt, Net Debt, Adjusted net D/E ratio and Free Cash Flow. NSHD’s management and executive officers
evaluates results and makes operating and investment decisions using both IFRS and non-IFRS measures included in this presentation. These non-IFRS measures exclude certain income,cost and cash flow items which are included in, or are calculated differently from, the most closely comparable measures presented in accordance with IFRS. By including these non-IFRS
measures, management and executive officers intends to provide investors with additional information to further analyze NSHD’s performance, core results and underlying trends. NSHD’s
non-IFRS measures are not prepared in accordance with IFRS and such non-IFRS measures should be considered a supplement to, and not a substitute for, measures prepared inaccordance with IFRS. Investors are encouraged to review the reconciliation of non-IFRS financial measures to their most directly comparable IFRS measure, which are on the part of ourslide deck.
● Financial information
NSHD’s financial statements are prepared in accordance with international Financial Reporting Standards (“IFRS”).

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September 7, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities | 2021 Japan ConferenceGroup Overview
NSHD’s Group operating structure

Company name
Ticker (Tokyo Stock Exchange)

Nippon Sanso Holdings Corporation (NSHD)
4091.TGas businessin Japan

Thermos business
Established

October 30, 1910

Head office

1-3-26 Koyama, Shinagawa-ku Tokyo, Japan

President CEO

3

Thermos K.K. group

Taiyo Nippon Sanso
Corporation group

Nippon Sanso
Holdings
Corporation

Toshihiko Hamada

Employees [As of March 31, 2021]

19,357

Gas businessin Asia and Oceania

Gas businessin the U.S.

Revenue (￥bn.) [FYE2021]

818.2

Asia/Oceania region
group companies

Matheson Tri-Gas, Inc.
group

Operating income (￥bn.) [FYE2021]

88.8

OI margin [FYE2021]

10.9%Countries Served

30 Countries and Areas

September 7, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities | 2021 Japan Conference

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

Global business network

As a result of the reclassification of segment classifications in FYE2022,
figure for FYE2021 has been restated based on the new segment classifications.

Japan

North America

Revenue

Revenue¥ 341.9bn.

¥ 189.9bn.

Segment OI

Segment OI

OI margin
8.7%

OI margin
12.2%¥ 23.1bn.

¥ 29.8bn.
North
America

EuropeJapan
EuropeRevenueAsia¥ 160.0bn.
Segment OI¥ 21.0bn.
OI margin
13.1%

A&O

¥ 102.0bn.
Segment OI¥ 8.9bn.
OI margin
8.7%

4

Revenue

Revenue

Oceania¥ 23.9bn.
Segment OI¥ 5.1bn.
OI margin
21.6%

September 7, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities | 2021 Japan ConferenceOur key businesses
Industrial Gas

Main Products

5Electronics－Oxygen－Nitrogen－Argon－Hydrogen, CO and syngas－Carbon dioxide－Helium－Related equipment & construction

Main Products

Thermos

－AsH3
－B2H6
－CH3F
－HCL
－PH3
－SiH4
－Related equipment & construction

September 7, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities | 2021 Japan Conference

Main Products－Bottle－Mug－Tumbler－Frying-pan
－Pan
－Dish

Global HyCO

Development and Value Creation• Selective technology & EPC
partnerships and alliances

North
America• Engineering & Design Standards across
Fleet• HyCO Solutions to deliver robust value

Global HyCOJapan

Sales promotion

MarketingEngineering

Europe• Best-in-class lifecycle operations

Asia ＆
Oceania• To-date fleet reliability > 99.5%• Premier safety, design, operations, andmaintenance performance• Field and industry experts with continuous
monitoring from Remote Operations Center(ROC) with steady and dynamic models
developed for various plant types• Continuous feedback into plant design,
instrumentation & controls

6

September 7, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities | 2021 Japan ConferenceHyCO/Hydrogen – “Owner-Operator” Perspective
Evolving Considerations
Evolving Technologies
Achieving Optimal Balance

7

September 7, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities | 2021 Japan ConferenceHyCO/Hydrogen Production – Primary Technologies
Historically, there have been a large number of routes used for industrial hydrogen production• Hydrocarbon-based Technology Options• Reforming Technologies – youngest of the widespread technology families•

Steam Reforming of Hydrocarbons (1938+): Steam Methane Reforming (SMR) and Steam-Naphtha Reforming (SNR)•

Autothermal Reforming (ATR)•

Secondary Reforming, Pre-Reforming, Gas Heated Reforming, Combined Reforming• Gasification (1765/1870 +)•Partial Oxidation (POx) of gas feedstock•

Heavies, waste gasification• Electrolysis (1800/1888+)•

Alkaline Electrolysis – classical method for hydrogen production that continues to evolve•

Proton Exchange Membrane (PEM) based Electrolysis•

Solid-oxide Electrolysis and other novel Electrolysis approaches• Other categories of Hydrogen/HyCO production include• By-product/co-product hydrogen from various industrial processes•

Some of these such as gas crackers and caustic chlorine can be very significant sources• Novel/emerging technologies•
8

Various forms of pyrolysis, dissociation and carbon-dioxide recycle and utilization based concepts/technologies

September 7, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities | 2021 Japan ConferenceHydrogen Production – Electrolysis and Hydrocarbon-based
Hydrocarbon BasedElectrolyzer
Electricity

SMR
Hydrogen

Water

CnHm

OxygenHydrogen

Water

CO

CO2

(optional)

CO

Steam

CO2

Oxygen(optional)

Steam

Electrolysis Based

POX/ATR

CnHm
Water

Key Considerations:
•
•
•
•
•

Electricity Consumption ~50-70 kWh/kg H2
Power Source (cost, carbon intensity,
availability)
Water availability
Potential co-product utilization (Oxygen)
Related CO2 emission depends on carbon
intensity of power source (from Zero to muchworse than SMR when included)

•
•
•
•
•
•

HydroCarbon Energy Consumption*
SMR 51-60 kWh/kg H2 POX/ATR 48-58 kWh/kg H2
Feed Source (cost, carbon intensity, availability) – C/H ratio in feedsource is an important variable
Oxygen Source (for POX and ATR)
Potential co-product utilization (CO, Syngas, Steam)Potential CO2 utilization (CCS, CCU)
CO2 emission**
SMR 9.2-11.2 kg/kg H2 POX/ATR 8.8-11 kg/kg H2* Does not include credit from steam export (5-10 kWh/kg H2 reduction) – SMR coproduct steam is the most efficient steam production in chemical plants & refineries** Does not include associated CO2 from electricity consumption or avoided CO2 from steam export

9

September 7, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities | 2021 Japan Conference

HydrogenHydrogen Production – Key Technologies & Benchmarking
Steam Methane Reforming

USD/MT H2

6,000
5,000

Electrolysis

Infrastructure
Feedstock & Util.

Hypothetical Case
25X today’s largest plant

4,513

4,212

4,171

4,000
3,000

2,535

2,000

1,347

+78%

Natural gas -50%
in North America

3,008

1,821
1,136

1,000

1,189

0
3,200 Nm3/h

CO2 Emissions
MT CO2/MT H2

3,008

3,008

1,504

1,203

1,162

3,200 Nm3/h

30,000 Nm3/h

100,000 Nm3/h(16 MW)(150 MW)(500 MW)

1,563

1,114

685

449

30,000 Nm3/h

100,000 Nm3/h

9.3

+167%

+131%

Break Even at>200 USD/MT “Carbon Tax”

USA 25.0 / 16.7 Europe Gridzero if 100% renewable

Nat gas: $20/MWh ($6/mmbtu), Power: $50 $/MWh, Grid Carbon intensity: USA 0.45, Europe 0.30 kg CO2e/kWh

Differences in economics increase with scale; More significant for markets such as Americas, Indonesia, Russia, Iran, central Asia
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September 7, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities | 2021 Japan ConferenceHydrogen Production - GHG Benchmarking Across Markets
kg CO2/kWh

1
0.98

0.9

4.7x
0.88

0.8
0.7

0.71

0.6
0.5
0.4

0.56

2.4x

0.50

0.45

0.38

0.3
0.2

0.22

0.20
0.1

0.13

0.25

0.04

UnitedCalifornia Wyoming Canada

Mexico

China

India

Korea

FranceGermany

States

Spain

Great
Britain

SwedenAustralia

Minimization of coal/heavy oil-based power and “cleaner” grids are the critical factor for HyCO production carbon
footprint management and cost-effective power to the economics
Grid data source: carbonfootprint.com

11~0.186 kg
CO2/kWh

0.01

0

•

Break-evencarbon footprint
between SMR
and Electrolysis

0.45

September 7, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities | 2021 Japan ConferenceHyCO/Hydrogen Integrated with Utilization for GHG Management
・Traditional, highly-proven HyCO production technologies can be integrated
with downstream to substantially reduce GHG
HyCO/H2 Production with CO2 Recovery/Use: “Blue” H2
HyCO Production integrated with Petrochemicals
Hydrogen Production integrated with Biofuel Manufacture

HyCO integrated with Steel and other downstream
・Variations often referenced in “Circular Economy” concepts
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September 7, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities | 2021 Japan Conference

“Blue” Hydrogen Production with Carbon-Dioxide Recovery
CO2 emissions (Blue H2 if captured)• Blue H2: bridge between (low cost, high emissions),gray H2 and (high cost, scale limited, zero emissions)green H2.

Steam byproduct

Gray H2Blue H2- From fossil fuels+ Limitless production+ Low Cost

• Blue H2 production entails higher capex and variable
costs for CO2, capture, compression, storage,transportation and sequestration, although this can, formany cases represent the most balanced solution forthe medium and even long term+/- Fossil fuel w CO2
capture/sequestered+ Limitless roduction+/- Moderate cost

- Emissions+ less emissions

Green H2

+ Renewable source- Limited production- Expensive+ No/little emissions- 24/7 limitations- Credits dependent
500

Net CO2 emissions

400
300

CO2, MTD• Carbon credits, availability of CO2 sequestration sites
and processing costs are essential for commercially
viable deployment of blue H2 and governments andcollaborative efforts have a critical role.

H2 Plant

Feed(Hydrocarbon
source +H2O)• CO2 can be recovered and reused, e.g., Enhanced Oil
Recovery (EOR), use to make chemicals; orpermanently sequestered (geological or deep sea).

H2 main product

Negative emissions, CO2:
• captured• from biological source

200
100
0
-100

Gray H2Blue H2

Gray H2Blue H2

-200
-300

(*)

Natural Gas Feed

Biological/waste Feed(*) Referential scale (actual number depends on plant size, and other factors)

13

September 7, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities | 2021 Japan ConferenceGreen diesel production of 150-180 Million Gallons/yr•

Mid-sized H2 plant (25-30 mmscfd/26.5-33 kNm3/hr))•

Evaluation of “gray” H2 vs (two options) “blue” H2•Higher capex and opex (equipment, chemicals, labor, etc.)•

Variable cost difference (“blue” vs “gray” H2): ~ 0.25 to 0.65

•

50%

20%
10%
0%
Gray H2

4.0

Carbon credits (typically >50 $/tm CO2) required to makeup the pricedifference (depend on multiple factors, e.g., feedstock & utility costs,
CO2 sink source, geopolitics, etc.); EOR with ultimate sequestration

O&M

30%

Costs for CO2 handling after recovery excluded from the economics
increase the premium without CCU/EOR credits

Capital40%

5.0(compression, storage, transportation, sequestration) and WILL•

60%

US$/kscf H2 higher cost for blue H2 (15% to 40%)
H2 Variable Cost, US$/kscf•

Percentge of Increase in Capex/O&M“Blue” Hydrogen Production – Illustrative Economic Impacts

3.0Blue H2Blue H2(CO2 from Syngas)(CO2 from flue Gas)

Feed

•

NG= 3 US$/mmbtu (HHV)

Fuel

•

Bio- Naphtha= 400 US$/mt

Steam

•

Power = 0.07 US$/kwh

Power
Others

2.0
1.0
0.0

Gray H2-1.0

can have major benefits as applicableBlue H2Blue H2

CO2 from
SyngasBlue H2Blue H2

CO2 from

CO2 from

CO2 from

Flue gas

SyngasFlue gas

Natural Gas Feed
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September 7, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities | 2021 Japan Conference

Gray H2

Biological Feed

HyCO/Hydrogen Production Integrated with Petrochemicals
Integrated HyCO facilities provide opportunities for decarbonization in the chemicals sector:• Product balance and integration to maximize economies of scale, synergies and carbon sinks(e.g. Methanol, Acetic Acid, Formaldehyde, Oxo-alcohols & derivatives)• CO2 Capture and recycling via dry reforming, CO2 electrolysis and other technologies• NSHD capabilities very well suited to integrate across industries, products and technologies
Integrated Syngas to Chemicals Concept
Methanol

CO2
NG
Syngas Generation

H2:CO

15

Hydrogen

H2

O2
Air Separation

CO2/H2 Processing

CO

N2

September 7, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities | 2021 Japan Conference

Ammonia synthesis

Ammonia

to Chemicals

Methanol synthesis

Hydrogen Production Integrated with Biofuels
FATS, OILS, GREASES, BIOWASTE CONVERTED TO
RENEWABLE DIESEL, NAPHTHA, JET FUELS•>50 green diesel/jet fuel projects developed/planned(operating, expansion, in planning, announced, underconstruction)… and more are announced almost daily•

Lucrative business - monetization of very low cost feed•

Nearly 10 billion gallons/yr of green fuels; with full market
allocation•

H2 need: ~1 to 2 billion scf/day (1.1-2.2 million Nm3/hr)•

H2 plants are typically 10-50 mmscfd (11-56 KNm3/hr)•

Renewable fuel byproducts can be smartly integrated withtraditional hydrogen plants to substantially reduce overall
carbon emission and economics.
•

Matheson/NSHD have developed conceptual designs andcompleted, firm lifecycle costs for multiple cases•

Unlike many others, option can be economic with limited subsidies•

Matheson/NSHD working on case in the US•

CO2 recovery options (syngas, flue gas) can be additionallyincorporated depending on site conditions, economics.
16

Source: DigestConnect presentation
February 2021

September 7, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities | 2021 Japan Conference

Green Fuel Production Plant

Summary• Production and utilization of Hydrogen and co-products is a rapidly evolving arena• Technology and process optimization required to manage GHG-minimization and economic tradeoffs• Traditional production options are continuously evolving and new/ novel technologies are emerging and necessary• Optimal solutions will continue to vary on a case-by-case basis, especially for medium/large HyCO
• Comparisons of alternate options must consider feedstock source(power, hydrocarbons) GHG to avoid environmental
degradation and economic impact• R&D to further improve renewable and greener technologies is necessary• Minimization of coal/heavies based power generation, or carbon capture from the same, is necessary to obtainwidespread environmental benefits from ANY power-intensive HyCO production• Scope/capex due to green power (solar/wind/tidal) variability must be included in economic impact• Integration across processes can enable economically effective carbon-mitigated solutions for many cases• Significant evolution across the renewables supply chain (power, bio-feedstock etc), pragmatic
governmental support, and fundamental advances in blue/green hydrogen technologies are required tohelp moderate economic impacts & harness environmental benefits in the HyCO production arena
versus the utilization of approaches that involve widespread commercial implementation of inefficienttechnologies and process schemes
17

September 7, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities | 2021 Japan ConferenceFor further information, please contact:

Investor Relations for investors
Investor Relations, Group Finance & Accounting OfficeTel: +81 (0)3-5788-8512
E-mail：Nshd.ir@nipponsanso-hd.co.jp

Upcoming IR events
Q2 FYE2022 Earnings Call

November 1, 2021

www.nipponsanso-hd.co.jp/en/

NIPPON SANSO Holdings Corporation (Ticker:4091.T)
Headquarters：1-3-26 Koyama Shinagawa-ku, Tokyo 142-0062, Japan

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September 7, 2021 | NIPPON SANSO Holdings Corporation | BofA Securities | 2021 Japan Conference

NIPPON SANSO Holdings Group Summary

https://www.nipponsanso-hd.co.jp/en/ir/

Published on July 1, 2021

Corporate Philosophy

Corporate Information（As of March 31. 2021）

Company Name

Nippon Sanso Holdings Corporation

Founded

October 30, 1910

Headquarters

1-3-26 Koyama Shinagawa-ku, Tokyo 142-0062, JapanTEL

81-3-5788-8500

Group Philosophy
Proactive. Innovative. Collaborative.

Representative Director, President CEO
Representative

Toshihiko Hamada

Common stock

37.3 billion yen

Stock information（As of March 31. 2021）

Number of sharesGroup Vision
We aim to create social value through innovative gas solutions that increase industrial productivity,
enhance human well-being and contribute to a more sustainable future.

433,092,837

Number of shareholders

Main Core business

16,205

Listed stock exchanges

Tokyo Stock Exchange First section

TickerIndustrial Gas businessElectronics business

Thermos business4091.T

Distribution by share holders (%)
Mitsubishi Chemical Holdings0%

Making life better through gas technology.

10%

50.59

20%

Japanese Indivisuals and others

Foreign Institutions and Individuals

30%

40%

Other Japanese Corporations

50%

10.40

14.89

60%

70%

80%

90%

Japanese Financial Institutions

5.86

100%

18.26

Revenue / Employee personnel by Segment （As of Match 31, 2021）
3%

7%

2%

13%

31%
41%

20%

FYE2022 Financial Forecast（IFRS)

22%

19,357¥818.2bn.

people

15%

23%

23%

Japan

US

EuropeAsia & Oceania

Thermos

Corporate

Revenue¥865.0 bn.

Operating income¥96.5 bn.

Net income attributable toowners of the parent

EPS¥58.2 bn.
¥134.49

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