TOKYO OHKA KOGYO CO., LTD.
Business Results― The 1st Half of Fiscal Yearending March 2017―

November 8, 2016

Contents
1. Consolidated Business Results forthe 1st Half of FY2017

p.2

2. Consolidated Performance Forecasts for p.12
FY2017
3. Topics

p.19- Initiatives under TOK Medium-Term Plan 2018 -1

Consolidated Business Results
for the 1st Half of FY2017

Summary(Millions of yen)

FY2016/1H

FY2017/1H
Change%Net sales

44,80542,897(1,908)(4.3)

Operating income

7,271

5,383

(1,887)(26.0)

Ordinary income

7,441

4,803

(2,638)(35.4)

Profit attributable toowners of parent

4,898

3,303(1,595)(32.6)

Average exchange rate (US$): ¥120.8/$ (FY2016/1H) ⇒ ¥103.8/$ (FY2017/1H)
Net Sales: Decreased due to impact of yen’s appreciation in addition todecline in high purity chemicals sales.
Operating Income: Decreased 26.0% due to yen’s appreciation despitelargely exceeding the initial forecast (on May 10, 2016.)
Ordinary Income: Decreased 35.4% due to an increase in foreign exchangeloss.
3

Non-operating expenses or incomee/Extraordinary losses or income(Millions of yen)

FY2016/1H FY2017/1H
Non-operating expenses or income
Interest and dividend income（Difference profit and loss to exchange）
Exchange gain and loss
Derivative appraisal profit or loss
Preparation expenses

Extraordinary losses or income
Gain on sale of investment securities
Impairment loss
Losses due to disasters

YoY

170(579)

(750)

+157

+130(26)

(△94)
(37)
(57)

(△891)(1,427)+535(△797)(1,389)+592(85)－+85(57)

162+2200+265+265(51)－－(91)+51(91)

4Results by Business Segment(Millions of yen)

FY2016/1HNet sales

FY2017/1H
Change%44,80542,897(1,908)(4.3)

43,835

41,576(2,259)(5.2)

Electronic functional materials

25,42025,822+402+1.6

High purity chemicals

18,30915,667(2,642)(14.4)

105

86(19)(18.4)

969

1,321+351

+36.2

7,271

5,383

(1,887)(26.0)

Material Business

9,026

7,356

(1,669)(18.5)

Equipment Business

(139)

(178)

(39)

―

(1,615)(1,795)(179)―

Material Business

Other
Equipment Business
Operating income

Eliminations and corporate(Note) Net sales of the Equipment Business are the figures after elimination of inter-segment sales.

5Breakdown of the Change in Operating Income(Material Business)
1st half of FY2016 result vs 1st half of FY2017 result

Expenses decrease
Improvement inproduct mix,etc.

＋¥0.4billion＋¥0.3 billion

Impact ofexchange rate changes
anddiscounted selling prices¥9.0(¥2.3) billion

billion¥7.4billion

1st half ofFY2016
Result

1st half ofFY2017Result(¥1.6) billion

6Sales Breakdown of Material Business
Net Sales(Millions of yen)

25,00021,987
115

21,84821,182(9)46

20,00021,921

21,26162

19,654

2560
9,041

9,268

9,175

8,446

15,000

8,300
7,367

10,00012,603

12,817

12,96012,753

12,227FY2016/Q1

FY2016/Q2

FY2016/Q3

FY2016/Q4

FY2017/Q1

5,000

13,5950Electronic functional materials

High purity chemicals

FY2017/Q2
Other7(Reference)

Electronic Functional Materials Division
Sales Composition of Electronic Functional Materials by Type
Other

Other
High-density
integration

g+i
18%

10%
11%

FY2016
LCD 1st half
13% result

High-density
integration

10%

16%
KrF
22%

LCD
11%

g+i16%FY2017
1st halfresult

KrF
23%

ArF
24%

ArF26%(Note) High-density integration:
Photoresist materials,
MEMS materials

Sales Composition of Semiconductor Photoresist by Region
JapanJapan

19%

Asia

58%

FY2016
1st half
result23%
Asia

North America

18%

55%

FY2017
1st half
resultNorth America

16%

5%

6%Europe

Europe8Equipment BusinessNet sales/Order backlog(Millions of yen)

2,000
1,719
1,500

1,321

1,210
1,000

969

998955

NetsalesOrderbacklog

5000

FY2016/1H(Millions of yen)
Term-endorder backlog

FY2016/2H

FY2017/1H

FY2016/1H

FY2016/2H

FY2017/1H

1,440

1,140

1,016(Note) The net sales of the equipment business is the figure after elimination of inter-segment sales.

9Balance Sheets(Millions of yen)

As ofSeptember
30, 2016

vs March 31,
201685,848(1,265)49,257
18,292
12,734(1,618)+370(265)

46,905(1,008)

640

(108)

Investments and other assets

30,934(589)

Current liabilities

17,515+385

7,848+60

1,517(1,381)

Total net assets

145,295(1,975)

Total assets

164,328(2,971)

Current assets
Cash and deposits
Notes and accounts receivable
Inventories
Property, plant and equipment
Intangible assets

Notes and accounts payableNon-current liabilities

Buildings and structures(1,029)Machinery and equipment (2,221)
Furniture and fixtures+477
Land(286)
Construction in progress+2,065+1,789Retained earnings+688
Treasury stock
Foreign currency translation(3,949)adjustment

10

Cash Flows(Millions of yen)

FY2016/1H FY2017/1H
Cash flows from operating activities+5,774+5,494+7,384+2,685+4,966+2,841+954(790)(1,499)(740)(2,624)+457+457+5(2,480)(1,219)Cash flows from investing activities(3,093)(5,180)Cash flows from financing activities(7,633)(1,261)

Translation adjustments
Net increase (decrease) in cash andcash equivalents+223(1,907)(4,729)(2,855)

Income before income taxes andminority interests
Depreciation
Decrease (increase) in trade notes andaccounts receivable
Decrease (increase) in inventories
Decrease (increase) in trade notes andaccounts payable
Increase (decrease) in advances
received
Income taxes paid

Exp.
Purchases of property, plantand equipment(4,002)Exp.
Dividends paid

(1,381)

11Consolidated PerformanceForecasts for FY2017

Earnings Forecasts (Full-year)(Millions of yen)

FY2016
Results

FY2017 Forecasts
Change%Net sales

89,96987,300(2,669)(3.0)

Operating income

12,4389,400(3,038)(24.4)

Ordinary income

12,6849,400(3,284)(25.9)

Profit attributable toowners of parent

7,716

6,300(1,416)(18.4)

Exchange rate assumptions (US$): 119.3¥/$ (FY2016) ⇒ 105.0¥/$ (FY2017/2H)
Net sales: Expected to decrease 3.0% due to lower-than-expected growth ofEquipment Business although high-density integration materials and high puritychemicals are expected to exceed the initial forecasts (on May 10, 2016.)
Operating income: Expected to decrease 24.4% due to a large impact of yen’s
appreciation despite expectation to exceed the initial forecast as a result of
product mix improvement.

13

Capital Investments/Depreciation/R&D
Capital Investments
11,000(Millions of yen）

10,000

2nd half
1st half

R&D Cost

Depreciation(Millions of yen)

10,000(Millions of yen)

2nd half
1st half

10,000

2nd half
1st half
8,100

8,000

7,276

6,129

8,000

8,000

5,919
6,000

5,631

6,000

2,7017,015

3,561

3,611

3,342

3,403

3,820

FY2015FY2016FY2017
forecast

6,000

4,276
3,776

4,000

6,903

6,200

2,946

4,000

4,279

3,358
4,000

2,615
2,000

4,870

4,574

2,000

2,143

2,000
2,685

2,841

FY2016FY2017
forecast

1,661
00

FY2015FY2016FY2017
forecast0

FY201514

Performance Forecasts by Business Segment(Millions of yen)

Net sales

FY2016FY2017 Full-year forecasts

Full-year results

Change%89,96987,300(2,669)(3.0)

87,28084,100(3,180)(3.6)

Electronic functional
materials

51,13451,900+765+1.5High purity chemicals

35,931

32,100(3,831)(10.7)

Equipment Business

2,689

3,200+510+19.0

Operating income

12,4389,400(3,038)(24.4)

Material Business

16,203

13,600(2,603)(16.1)

Equipment Business

(423)

(400)

+23

―

(3,342)(3,800)(457)―

Material BusinessEliminations and corporate(Note) The net sales of the equipment business is the figure after elimination of inter-segment sales.

15

Breakdown of the Change in Operating Income (Material Business)
FY2016 Result vs FY 2017 Forecast
Expenses increase(¥0.1) billion

Improvement inproduct mix,etc＋¥1.6 billion
Impact ofExchange rate changes
anddiscounted selling prices¥16.2billion(¥4.1)billion¥13.6billion

FY2016
ResultFY2017
Forecast(¥2.6)billion

16

Sales Breakdown of Material Business (Forecast)
Net Sales(Millions of yen)

50,00044,053

43,835

(177)

105

108

18,53918,30924,127

25,690FY2015/1H

FY2015/2H

40,55740,00030,00043,444

41,57642,52386

13

17,621

15,667

16,432

25,42025,71425,822

26,077FY2016/1H

FY2016/2H

FY2017/1H

FY2017/2H(Forecast)Other125
16,30420,00010,0000Electronic functional materialsHigh purity chemicals(Note) The second half forecast is obtained by subtracting first-half results from the full-year forecast.

17

(Reference) Electronic Functional Materials Division
Sales Composition of Electronic Functional Materials by Type
Other
High-density
integration

Other
High-density
10%
integration

g+i
17%10%12%

FY2016KrF
LCD Full-year 22%
13% result
ArF
26%

g+i16%
16% FY2017
KrF
Full-year
LCD forecast 23%
11%
ArF
24%

Sales Composition of Semiconductor Photoresist by Region
JapanJapan

20%
FY2016
Asia Full-year North America
57%
result18%

FY2017
Asia Full-year56%forecast

5%Europe

24%
North America

15%5%Europe18Topics－Initiatives under
TOK Medium-Term Plan 2018－ArF Resist
Increasing demand for 1Xnm generation,
win customers adopting 10nm or less
LogicApprox.
2.1 times

Shift to new process and start of mass
production by major manufacturers.
⇒The utilization rate is expected to rise.
New adoption and usage volume increase byMemory major manufacturers.

⇒ Develop materials for cutting-edge processes. Approx.

1.5 times
FY2013
Sales=100

FY2013Results

FY2016
Results

tok medium term plan 2015

FY2017
Forecast

FY2019Targettok medium term plan 201820

KrF Resist
Increase adoption of thick-film photoresists for 3D-NAND
Steady increase in mass production volume of 3DNAND by major manufacturers.
⇒ Other manufacturers to increase mass production.
Respond to materials selection for next and moreadvanced generation 3D-NAND.
⇒ Win the adoption in next generation 3D-NAND.

Approx.
1.8 times
Approx.
1.4 times

FY2013
Sales=100

FY2013Results

FY2016
Results

tok medium term plan 2015

FY2017
Forecast

FY2019Targettok medium term plan 201821

High-density integration Materials
Increase the supply for new/ advanced processing applications
Advanced process integration materials
Adopted in FO-WLP manufacturing process for highend smartphone’s application.
Expansion of next-generation memories and FO-WLP
technologies.
↓Aggressive approach to the markets in Korea,
Taiwan, and China.

MEMS Materials

Approx.
3.5 times

Approx.
2.4 times

Expand applications of MEMS materials in electroniccomponents, etc.
(Various sensors, devices for communication.
equipment, electronic components)↓Develop new needs and customers. (North America,Japan)
Develop European markets.

FY2013
Sales=100
FY2013Results

FY2016
Results

tok medium term plan 2015

FY2017
Forecast

FY2019Targettok medium term plan 2018

http://www.tok.co.jp/eng(Note)
This presentation material contains forward-looking statements that describe future prospects ofTOKYO OHKA KOGYO CO., LTD. (the Company) in terms of business planning, earnings andmanagement strategies. Such statements are based on management’s judgement, derived frominformation available to it at the time such information was prepared. Readers are cautioned not to rely
solely on these forward-looking statements, as actual results and strategies may differ substantiallyaccording to changes in the Company’s business environment.

22