Supplementary Materials forConsolidated Business Performancefor the First Quarter of FYE2018

July 31, 2017TAIYO NIPPON SANSO Corporation
11Contents
１. Business Performance for First Quarter of FYE2018
1) Overview of business performance2) Business performance by segment
２. Full-Year Forecasts for FYE2018
1) Overview of forecasts for the full-year2) Forecasts by segment
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)

FYE2017
Q1 ResultsMarginRevenue

133.4

FYE2018
Q1 Results

FYE2018
Forecast
YoY Change

Margin150.8(Announced May 10)

Margin+17.4

620.0+13.1%

Core operating income

12.1

Non-recurring profit and loss

0.2

0.2

+0.0

0.5

Operating income

12.3

14.3

+2.0

57.0

Finance costs

-0.6

-0.7

-0.1-4.5

Income before income taxes

11.7

13.6

+1.9

52.5

-4.8

-5.7

-0.9

-16

6.8

7.8

+1.0

36.5

Net income attributable to owners of theparent

6.4

7.6

+1.234.5

Net income attributable to non-controlling interests

0.4

Income tax expensesNet income

149.1%

+1.9
9.3%

9.2%

56.5

+15.8%

9.5%

9.1%+16.3%

9.2%(Attribution of net income)

4.9%

5.0%

0.2

+17.4%-0.2

Impact of foreign currency translations (US$→¥): FYE2017 Q1 rate: $1=¥107.87 FYE2018 Q1 rate: $1=¥111.42→Impact of currency gains led to increases of ¥1.5 billion in revenue and ¥0.1 billion in core operating income

35.6%

2.0

1-1. Overview of business performance【Revenue】
FYE2018
ForecastFYE2017
Q1 Results

FYE2018
Q1 Results% ChangeGas Business in Japan

74.178.0+5.2%

338.0

Gas Business in the U.S.

32.5

41.7+28.5%

166.0

Gas Business in Asia and Oceania

19.3

23.8+23.2%

89.0

Thermos and Other businesses

7.4

7.2-2.5%

27.0

Revenue Total

133.4

150.8

+13.1%

620.0

FYE2017
1Q Results

FYE2018
1Q Results% Change

FYE2018
Forecast(Billions of yen)

(Announced May 10)【Operating income】(Billions of yen)

(Announced May 10)

4

Gas Business in Japan

6.0

7.2

+19.9%

28.5

Gas Business in the U.S.

2.0

3.1+53.7%

13.8

Gas Business in Asia and Oceania

1.22.0+61.6%

7.2

Thermos and Other businesses

2.9

2.2-24.6%

9.0

Eliminations or Corporate

-0.1

-0.5

+279.4%-2.0Core operating income Total

12.1

14.0

+15.8%

56.5

Non-recurring profit and loss

0.2

0.2

+48.6%

0.5

Operating income Total

12.3

14.3

+16.3%

57.0

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

Industrial Gas

RevenueElectronics

EnergyFYE2018

1Q

1Q% Change

Bulk gases

18.5

19.3

+4.4%

On-site gases

11.5

12.0

+4.4%

Packaged gases

2.8

2.7

-2.6%

Hard goods

4.9

5.8+18.2%

Plants and Equipments

8.8

8.3-6.2%

Medical

5.2

5.3+1.5%

Total

52.0

53.7+3.2%

Gases

11.3

11.8+5.2%

Equipment and Installation

4.5

5.2+15.3%

Total

15.8

17.1+8.1%

LP gas

5.5

6.4+15.2%

Related Equipment

0.6

0.6+4.3%

Total

6.2

7.0+14.1%

Revenue Total

74.1

78.0+5.2%

6.0

7.2

+19.9%

Segment income

Reasons for changes in revenue

Reason for change in segment income

・Bulk gases: Strong shipments of carbon dioxide gas and dry ice・Bulk gases: Strong shipments of carbon dioxide gas and dry ice

・Hard goods: Firm sales of cutting and welding equipment, and・Plant: Improvement in the cost of sales ratio, despite the absence ofwelding materials
・Electronics: Recorded large-scale projects in equipment andinstallation
・LP gas: Higher sales price following an increase in the import price

5

FYE2017large-scale projects recorded in the previous fiscal year
・Electronics: Strong shipments of gas, in addition to the recording oflarge-scale projects in equipment and installation

1-2. Business Performance by Segment: Gas Business in the U.S.
FYE2017
1Q(Billions of yen)

Industrial Gas
RevenueElectronics

FYE2018
1Q% Change

Bulk gases

10.4

17.1+64.7%

On-site gases

1.0

2.7+153.3%

Packaged gases

11.5

11.4

-1.0%

Hard goods

6.9

7.6

+10.1%

Total

29.9

38.9

+29.9%

Gases

2.0

1.9

-1.3%

Equipment and Installation

0.5

0.8

+64.9%

Total

2.5

2.8

+12.3%

Revenue Total

32.5

41.7+28.5%

2.0

3.1

+53.7%

Segment income※Impact of yen appreciation on currency translations
Revenue increased by ¥1.1 billion and segment income by ¥0.1 billion

Reasons for changes in revenue
・Recognition of business acquired from Air Liquide contributed ¥7.4billion (recognized primarily in bulk gases and on-site gases)
・Bulk gases: Higher revenue, particularly from carbon dioxide gas
and dry ice

6

Reason for change in segment income
・Recognition of business acquired from Air Liquide contributed¥1.0 billion
・Bulk gases: Strong shipments of carbon dioxide gas and dry ice

1-2. Business Performance by Segment: Gas Business in Asia and Oceania
FYE2017
1Q(Billions of yen)

FYE2018
1Q% Change

Bulk gases

5.5

8.0+44.4%

On-site gases

0.60.6+13.1%

Packaged gases

1.0

1.3+22.2%

Hard goods

1.7

1.2-28.1%

Plants and Equipment

2.9

2.9-1.0%

Total

11.9

14.2

+19.1%

Gases

6.5

7.5+14.9%

Equipment and Installation

0.8

2.0+143.9%

Total

7.3

9.5+29.8%

Revenue Total

19.3

23.8

+23.2%

1.2

2.0+61.6%

Industrial Gas
RevenueElectronics

Segment income※Impact of yen appreciation on currency translations
Revenue increased by ¥0.4 billion and segment income by ¥0.1 billion

Reasons for changes in revenue◆Industrial gas-related business・Contribution from the acquisition of Supagas Holdings Pty
Ltd (Australia): ¥2.4 billion
・Singapore and Malaysia: Soft sales to the oil & gas sector
・Australia: Strong shipments centered on LP gas◆Electronics-related business・Taiwan: Solid sales of gas and from equipment andinstallation

Reason for change in segment income◆Industrial gas-related business・Contribution from Supagas Holdings Pty Ltd (Australia):¥0.4 billion
・Singapore, Malaysia: Segment income decreased in linewith lower revenue

・Australia: Strong shipments centered on LP gas◆Electronics-related business・Taiwan: Solid sales of gas and from equipment andinstallation

71-2. Business Performance by Segment: Thermos and Other businesses
FYE2017
1Q(Billions of yen)

ThermosRevenue

FYE2018
1Q% Change

Japan

6.0

5.8

-4.3%

Asia

0.7

0.7-2.5%

Total

6.8

6.5-4.1%

Other

0.5

0.6

+16.5%

Revenue Total

7.4

7.2-2.5%

2.9

2.2-24.6%

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

Reasons for changes in revenue◆Thermos Business・Japan: Revenue decreased as inbound demand was not as strong
as in the same period last year, despite stepping up sales
expansion measures

Reason for change in segment income◆Thermos Business・Japan: Segment income decreased as inbound demand
was not as strong as in the same period last year
・Overseas: Equity in earnings of affiliates decreased, due toslowing sales growth in the U.S. and Europe82-1. Full-Year Forecasts for FYE2018(Billions of yen)

FYE2017
Results
MarginRevenue

581.5

FYE2018
Forecast
Margin620.0YoY Change% Change

+38.5
+6.6%

Core operating income

54.7

56.5
9.4%

+1.8
9.1%

+3.2%

Non-recurring profit and loss

-1.0

0.5

+1.5

Operating income

53.6

57.0

+3.4

9.2%

9.2%

+6.2%

Finance costs

-3.4

-4.5

-1.1

Income before income taxes

50.1

52.5

+2.4

13.9

-16.0

-2.1

36.2

36.5

+0.3

Net income attributable to owners of
the parent

34.7

34.5

-0.2

Net income for the year attributable to noncontrolling interests

1.4

Income tax expenses
Net income(Attribution of net income)

6.0%

5.6%2.0

Assumed exchange rate (US$→¥): $1=¥1109Reversal of deferred tax liability occurred in the US（Income tax for FYE2017 of -¥1.1 billion）

-0.7%

+0.6

2-2. Full-Year Forecasts for FYE2018 by Segment【Revenue】
FYE2017
Results

FYE2018
Forecast% Change

Gas Business in Japan

321.4

338.0+5.2%

Gas Business in U.S.

147.2

166.0+12.7%

Gas Business in Asia and Oceania

85.8

89.0+3.6%

Thermos and Other businesses

27.0

27.0-0.1%

Revenue Total

581.5

620.0+6.6%

FYE2017
ResultsFYE2018
Forecast% Change

Gas Business in Japan

29.4

28.5-3.2%

Gas Business in U.S.

12.0

13.8+14.3%

Gas Business in Asia and Oceania

5.1

7.2+39.4%

Thermos and Other businesses

10.0

9.0-10.2%

Eliminations or Corporate-1.9-2.0-1.5%

Core operating income Total

54.7

56.5+3.2%

Non-recurring profit and loss

-1.0

0.5-146.6%

Operating income Total

53.6

57.0+6.2%(Billions of yen)

【Operating income】(Billions of yen)

10

(Reference Materials)

11Non-recurring Income and Expense Items
FY2017 1Q
results

FYE2018 1Q
results

YoY changeCore operating income

12.114.0+1.9

Non-recurring profit and loss

0.2

0.2+0

Operating income

12.3

14.3+2.0(Billions of yen)【Non-recurring Income and Expense Items】
FY2017 1Q results
Item
Gain on sales of Asian landTotal

12FYE2018 1Q Results
Am ount

Item\0.2 billion Gain on sales of domestic land

\0.2 billion Total

Am ount\0.2 billion\0.2 billion

Key Performance Indicators (Consolidated)
FYE2017
1Q Results

FYE2018
1Q Results

FYE2017
Results

FYE2018
ForecastBasic earnings per share (Yen)

14.98

17.59

80.28

79.72

ROE－－

10.3%9.5%

ROCE－－

8.4%

7.9%

Annual dividends per share (Yen)

－－

20

22

Dividend payout ratio

－－

24.9%

27.6%

Capital expenditures

10,353

13,296

43,79666,000

1,273

2,632

102,034－

9,030

10,81040,04844,000261,601

353,190359,528

343,000

211,796306,587

304,308

297,000(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)

13

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

56%

Oxygen18%

31%

Nitrogen

24%

38%

Argon
0%

10%

20%

3%
30%

40%

3%

21%

14%

4%

19%

50%

60%

22%

ChemicalsElectronic equipment &semiconductors
Shipbuilding, machinery,transportation equipment
Others

20%

28%
70%

80%

90%

100%

【Net Sales Mix by Industry】
Steel and other metals

SeparateGases(O2, N2, Ar)

20%

8%

Total Sales

0%

14

23%

10%
10%

17%

23%
20%

30%

10%

30%

8%
40%

ChemicalsElectronic equipment &semiconductors
Shipbuilding, machinery,transportation equipmentOthers

50%
50%

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

Specialtygases

Acetylene15

Packaged gases
Dewar
vessel(liquid)

Customers

Carbondioxide gas

HydrogenHeliumLPG

Specialtygases

Acetylene

・Steel andnonferrous metals
・Electronics
・Petroleum andchemicals
・Automobiles andindustrialmachinery・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
contained in this presentation is accurate and complete.
●This presentation and report contain forward-looking statements (estimatesand forecasts) regarding the future plans, strategies, activities andperformance 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 avariety of risk and uncertainties. These risks and uncertainties include, but
are not limited to, changes in general economic and specific marketconditions, currency exchange rate fluctuations, tax systems, andregulations.
●Accordingly, actual results may differ from forecasts issued at this time.
With this in mind, please refrain from relying solely on these materials whenmaking investment decisions.

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