Supplementary Materials forConsolidated Business Performancefor the First Three Quarters of FYE2020

February 5, 2020
TAIYO NIPPON SANSO Corporation
11Contents
１. Business Performance for First Three Quarters of FYE2020
1) Overview of business performance2) Business performance by segment
２. Full-Year Forecasts for FYE2020
1) Overview of forecasts for the full-year2) Forecasts by segment for the full-year
３. Reference Materials
1）Breakdown for revenue disclosure categories for each segment
2）Statement of non-recurring profit and loss3）Condensed Consolidated Statements of Cash Flows
4）Condensed Consolidated Statements of Financial Position
5）Key performance indicators
6）Sales mix by business
7）TNSC’s Gas Supply Structure21-1. Overview of business performance
FYE2019
Q3 results(Billions of yen)Margin518.0

Revenue

FYE2020
Q3 results

YoY Change

Margin633.4+115.4+22.3%

Core operating income

43.8

68.2

Non-recurring profit and loss

0.8

Operating income

44.6

Finance costs

-2.4

-10.9

-8.5

Income before income taxes

42.2

60.9

+18.7

Income tax expenses

-13.1

-18.3

+5.2

Net income

29.0

42.5

+13.5

8.5%

+24.4
10.8%

3.6

+55.6%+2.8

71.8
8.6%

+27.2
11.4%+60.9%(Attribution of net income)Net income attributable to ownersof the parent

27.2

Net income attributable to non-controlling interests

1.7

41.3
5.3%

+14.1
6.5%

1.1

+51.9%-0.6

Foreign currency translations (US$→¥): FYE2019 Q3 rate: $1=¥111.33 FYE2020 Q3 rate: $1=¥108.89(€→¥):
FYE2020 Q3 rate: €1=¥127.00 FYE2020 Q3 rate: €1=¥121.12
In FYE2019 Q3, European business acquisition-related expenses (advisory fees, etc.) of ¥2.7 billion had been recorded.

31-1. Overview of business performance【Revenue】
FYE2019
Q3 results

FYE2020
Q3 results% Change

Gas Business in Japan

265.9

260.2-2.2%

Gas Business in the U.S.

138.8

148.8+7.2%

Gas Business in Europe

12.6

125.3-Gas Business in Asia and Oceania

78.8

79.1

+0.3%

Thermos Business

21.6

19.8-8.1%

Revenue Total

518.0

633.4

+22.3%

FYE2019
Q3 results

FYE2020
Q3 results% Change(Billions of yen)

【Operating income】(Billions of yen)

4

Gas Business in Japan

21.3

19.9-6.4%

Gas Business in the U.S.

10.5

16.7+59.4%

Gas Business in Europe0.519.2-

Gas Business in Asia and Oceania

8.5

8.1-4.8%

Thermos Business

7.2

6.0-15.9%

Eliminations or Corporate*-4.3-1.9-

Core operating income Total

43.8

68.2

+55.6%

Non-recurring profit and loss

0.8

3.6-

Operating income Total

44.6

71.8

+60.9%* Eliminations or Corporate：European business acquisition-related expenses (advisory fees, etc.) of ¥2.7 billion had been recorded for the first three quarters of FYE2019.

1-2. Business Performance by Segment: Gas Business in JapanFYE2019

FYE2020

Q3 results

Q3 results

Air separation gases, other

11.4

11.4

+0.1%

Packaged subtotal

11.4

11.4

+0.1%

Air separation gases

38.1

36.4

-4.4%

Carbon dioxide

18.3

17.8-2.6%

Helium

3.3

3.4

+2.0%

(Billions of yen)
Packaged

Bulk
Gases
On-siteRevenue% Change

Other gases

7.6

7.5-0.9%

Bulk subtotal

67.4

65.2-3.2%

Air separation gases

56.8

53.7

-5.5%

Other gases

5.3

4.8-8.1%

On-site subtotal

62.1

58.5

-5.8%

LP gas24.3

20.3-16.5%-0.2%

Specialty gases

19.7

19.7

Subtotal

185.1

175.3-5.3%

Gas-related and plant, other

48.5

55.3

+14.1%

Electronics-related

12.6

11.1-11.7%

Welding and cutting-related

19.6

18.3

-6.5%

Subtotal

80.7

84.8

+5.0%

Revenue Total

265.9

260.2

-2.2%

21.3

19.9

-6.4%

Equipment and installation,
other

Segment income

Reasons for changes in revenue

Reason for change in segment income

・Bulk & On-site (Air separation gases): Revenue decreased primarily
in the key industries of steel, non-ferrous metals, metal processing,and chemicals
・Gas-related and plant, other (Medical): Contribution from acquisitionof IMI Co., Ltd, a medical equipment sales company

・Higher costs due to rising fuel prices
・Bulk & On-site (Air separation gases): Lower earnings fromdecreased revenue
・Contribution from acquisition of IMI Co., Ltd, a medical equipment
sales company
・Expenses: Higher costs due to personnel expenses, etc.

51-2. Business Performance by Segment: Gas Business in the U.S.
FYE2019

FYE2020

Q3 results

Q3 results

Air separation gases, other

34.4

36.1

+4.9%

Packaged subtotal

34.4

36.1

+4.9%

Air separation gases

27.4

27.7

+1.0%Carbon dioxide

18.5

19.3+4.5%

Helium

4.5

4.3-4.3%

Other gases

7.3

6.6-8.5%

Bulk subtotal

57.9

58.2+0.5%

Air separation gases

5.9

7.1

+19.2%

Other gases

1.1

9.9－On-site subtotal

7.1

17.0+139.6%

LP gas3.3

2.8-14.2%

Specialty gases

5.2

4.9-6.9%

108.1

119.3

+10.3%(Billions of yen)
Packaged

BulkGases
On-siteRevenue

Subtotal
Electronics-related

3.8

3.5-7.5%

Welding and cutting-related

26.8

25.9-3.2%

Subtotal

30.6

29.5-3.7%

Revenue Total

138.8

148.8+7.2%

10.5

16.7+59.4%

Equipment and installation,other% Change

Segment income*Impact of foreign currency translation: Negative impacts of ¥3.01 billion on revenue and ¥0.23 billion on segment income

Reasons for changes in revenue
・Bulk: Firm shipments centered around air separation gases.
Carbon dioxide gas shipments increased with the start ofoperations at new plants
・On-site: Start of operation at new projects. Contribution fromacquisition of HyCO business

6

Reason for change in segment income
・Industrial gas-related business was generally firm, centeredon air separation gases
・Cost increase due to manufacturing costs, etc., in the carbon
dioxide gas business・Contribution from acquisition of HyCO business1-2. Business Performance by Segment: Gas Business in Europe
FYE2019

FYE2020

Q3 results

Q3 results

Air separation gases, other

2.0

23.5

Packaged subtotal

2.0

23.5

Air separation gases

3.0

29.4

Carbon dioxide

1.9

20.5

Helium

0.3

6.3

Other gases

1.0

8.8

Bulk subtotal

6.4

65.2

Air separation gases

1.9

16.4

Other gases

0.3

2.8

On-site subtotal

2.3

19.3

(Billions of yen)Packaged

BulkGases

Revenue

On-siteSpecialty gases

0.6

6.1

Subtotal

11.4

114.2

Gas-related and plant, other

0.9

8.6

Welding and cutting-related

0.2

2.3

Subtotal

1.2

11.0

Revenue Total

12.6

125.3

0.5

19.2

Equipment and installation,otherSegment income*Impact of foreign currency translation: Negative impacts of ¥0.58 billion on revenue and ¥0.02 billion on segment income

The European business acquired from Praxair, Inc. of the United States・in December 2018 has been disclosed in this segment.
（The FYE2019 3Q results are the business performance of the European business in December 2018.）
The revenue increased 2.1% year on year from ¥122.7 billion as compared to the business performance of the Gas Business in Europe
from April 1, 2018 to December 31, 2018, assuming the acquisition date of the European business acquired from U.S. company Praxair, Inc.
was April 1, 2018.

71-2. Business Performance by Segment: Gas Business in Asia and Oceania
FYE2019

FYE2020

Q3 results

Q3 results

Air separation gases, other

2.9

2.7

Packaged subtotal

2.9

2.7

-7.0%

Air separation gases

13.9

12.3

-11.0%

Carbon dioxide

1.3

1.3+4.5%

Helium

3.0

4.1+32.9%-11.1%(Billions of yen)
Packaged

Bulk
Gases
On-siteRevenueEquipment and installation,other% Change-7.0%

Other gases

2.3

2.0

Bulk subtotal

20.6

19.9-3.5%

Air separation gases

2.7

2.7+1.9%

On-site subtotal

2.7

2.7

+1.9%

LP gas

11.2

11.2

-0.4%

Specialty gases

22.0

20.5

-6.6%

Subtotal

59.6

57.2

-4.0%

Gas-related and plant, other

12.8

12.8

-0.5%

Electronics-related

2.6

5.2+99.3%

Welding and cutting-related3.7

3.7+2.2%

Subtotal

19.2

21.8+13.7%

Revenue Total

78.8

79.1

+0.3%

8.5

8.1

-4.8%

Segment income*Impact of foreign currency translation: Negative impacts of ¥2.90 billion on revenue and ¥0.37 billion on segment income

Reasons for changes in revenue
・Bulk (Air separation gases): Revenue decreased significantly,mainly in China
・LP gas: Firm sales in Australia
・Specialty gases: Lower shipments of electronic materials gases
・Electronics-related equipment and installation: Revenue in Taiwan
rose substantially8

Reason for change in segment income
・Profitability improved in the LP gas business in Australia
・Earnings declined due to lower electronic materials gas revenue

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

Revenue

FYE2019

FYE2020

Q3 results

Q3 results% ChangeJapan

16.9

17.2

+1.5%

Overseas

4.6

2.6-43.2%

21.6

19.8

-8.1%

7.2

6.0

-15.9%

Revenue Total
Segment income*Impact of foreign currency translation: Negative impacts of ¥0.23 billion on revenue and ¥0.08 billion on segment income

Reasons for changes in revenue
・Japan: Sales of vacuum insulated mobile mugs were on par withthe previous fiscal year. Sales of sports bottles and heat-retaining
lunch boxes were sluggish
・Overseas: Change in sales environment in South Korea.
Decline in capacity utilization of production plants in Malaysia andthe Philippines

Reason for change in segment income
・Japan: Earnings decreased due to lower revenues caused
by unseasonable weather with a cool summer and warm winter・Overseas: Earnings decreased due to a decline in capacity
utilization of production plants. Lackluster sales at equity-method
affiliates

92-1. Full-Year Forecasts for FYE2020(Billions of yen)

FYE2019
Results
MarginRevenue

740.3

FYE2020
Forecast(Announced Feb. 5)
Margin855.0

YoY Change% Change+114.7FYE2020
Forecast(Announced May.13)

Margin890.0+15.5%

Core operating income

65.8

91.5
8.9%

Non-recurring profit and loss

1.0

Operating income

66.8

+25.7

10.7%

3.5

95.0
9.0%

11.1%

95.0

+39.0%

10.7%

+2.5

7.0

+28.2

102.0

+42.1%

11.5%

Finance costs

-4.7

-14.5

-9.8

-15.5

Income before income taxes

62.0

80.5

+18.5

86.5

Income tax expenses-18.3-24.5+6.2-27.0

Net income

43.7

56.0

+12.3

59.5+12.8

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

41.2

Net income for the year attributable to non-controlling interests

2.4

Assumed exchange rate for FYE2020: (US$→¥): $1=¥108.50,*Actual exchange rates for FYE2019 : (US$→¥): $1=¥111.07,

1054.0
5.6%(EUR→¥):€1=¥120.00(EUR→¥) €1=¥125.70

6.3%

2.0

+30.8%

-0.4

6.4%

2.5

2-2. Full-Year Forecasts for FYE2020 by Segment【Revenue】
FYE2019Results(Billions of yen)

FYE2020
Forecast% Change(Announced Feb. 5)

FYE2020
Forecast(Announced Oct. 31)

Gas Business in Japan

363.9

360.0

-1.1%

375.0

Gas Business in U.S.

187.3

199.0+6.2%

207.0

Gas Business in Europe

55.1

164.0

+197.6%168.0

Gas Business in Asia and Oceania

106.1

105.0

-1.1%

110.0

Thermos Business

27.8

27.0

-2.9%

30.0

Revenue Total

740.3

855.0

+15.5%

890.0

FYE2019
Results

FYE2020
Forecast% Change

FYE2020
Forecast*1【Operating income】(Billions of yen)

(Announced Feb. 5)

Gas Business in Japan

29.8

27.8

(Announced Oct. 31)-6.7%29.1

Gas Business in U.S.

15.6

22.0+40.7%

22.0

Gas Business in Europe*1

6.5

25.0

+280.7%25.5

Gas Business in Asia and Oceania

9.1

10.7+16.9%

11.0

9.1

8.2

-10.8%

9.4*2

Eliminations or Corporate-4.5-2.2－-2.0

Core operating income Total

65.8

91.5

+39.0%

95.0

Non-recurring profit and loss

1.0

3.5－7.0

Operating income Total

66.8

95.0

+42.1%

102.0

Thermos Business*1 The FYE2019 resulted represent business performance for the four-month period from December 2018 to March 2019 of the European business acquired from U.S. company Praxair, Inc.
*2 In FYE2019 resulted, European business acquisition-related expenses (advisory fees, etc.) of ¥2.7 billion had been recorded in core operating income.

11(Reference Materials)

12Breakdown for revenue disclosure categories for each segment
The breakdown for revenue disclosure categories for each segment is listed in the below chart.
Revenue disclosure category

BreakdownGases

Industrial gases such as oxygen, nitrogen, and argon, LP gases, specialty gases

PackagedGas filling containers (cylinders) are delivered to the customer, and the gas is supplied according to method of use

Air separation gases, other All gases including air separation gases (oxygen, nitrogen, argon that are created by separation from the atmosphere)
Bulk

A storage tank for liquified gas is installed within the customer’s facility, and the gas is supplied according to method of use

Air separation gases

Oxygen, nitrogen, argon

Carbon dioxide

Carbon dioxide gas, dry ice

HeliumHelium gas

Other gases

Other gases such as hydrogen

On-siteA gas production facility is established in an area adjacent to the customer, and the gas is constantly supplied using a directly connected pipe

Air separation gases

Oxygen, nitrogen, argon

Other gases

Other gases such as hydrogen and carbon monoxide

LP gas

Propane gas, butane gas

Specialty gases

Gases for electronic materials that are used in the manufacture of semiconductors or LCD panels, standard gas, high-purity gas

Equipment and installation, otherAncillary equipment for gas usage, refining equipment to raise gas purity level, construction for equipment installation, and other equipment

Gas-related and plant, otherGas-related supply facilities and gas abatement equipment, air separation units, and other equipment

Electronics-related

Construction for equipment and pipe installation toward electronics, refining equipment for removing impurities, and other equipment

Welding and cutting-related

Equipment, apparatuses, welding rods and other items (hard goods) used in metal processing including gas welding and cutting

13

Non-recurring Income and Expense Items
FYE2019
Q3 results

FYE2020
Q3 results

YoY changeCore operating income

43.8

68.2+24.4

Non-recurring profit and loss

0.8

3.6+2.8

Operating income44.6

71.8+27.2(Billions of yen)【Non-recurring Income and Expense Items】
FYE2019 Q3 results
Item

FYE2020 Q3 results
Amount

Item(Billions of yen)

Gain on sales of domestic land

0.9 Gain on sales of domestic land, etc.

Other-0.1

Restructuring-related expenses for thealfi business (Thermos)
Impairment loss associated with thedisposal of affiliated companies, etc.

Total

140.8 Total

Amount(Billions of yen)

6.5
-0.5
-2.3
3.6

Condensed Consolidated Statements of Cash FlowsFYE2019

FYE2020

Q3 results

Q3 results

Income before income taxes

42.2

60.9+18.7

Depreciation and amortization

36.8

63.0

+26.2

(Billions of yen)

YoY change

Changes in working capital

2.3

-8.2

-10.5

Others

-22.2

-18.4

+3.8

59.1

97.2

+38.1

Capital expenditures

-53.5

-54.3

-0.8

Investments and loans-645.8-0.5+645.3

Others (asset sales, etc.)

3.6

9.8

+6.2

(2) Cash flows from investing activities-695.7-45.1+650.6

Free cash flow (1+2)-636.552.1+688.6

Net interest-bearing liabilities

932.1

942.6

+10.5

Adjusted net D/E ratio

－

1.48－

(1) Cash flows from operating activities

Net interest-bearing liabilities: interest-bearing liabilities - cash and cash equivalents
Adjusted net D/E ratio: (Net interest-bearing debt – equity-type debt*1) / (equity attributable to owners of parent + equity-type debt*1)*1 Equity-type debt: the amount of debt procured by Hybrid finance*2 that has been recognized as equity credit by rating agencies(50% of the procured amount).
*2 Hybrid finance: A form of debt financing that has features resembling equity, such as voluntary deferral of interest, extremely
long-term redemption periods and subordination during liquidation or bankruptcy procedures.

15

Condensed Consolidated Statements of Financial Position

FYE2019

FYE2020

Results

Q3 results

Cash and cash equivalents

59.6

73.7

+14.1

Trade receivables

197.9

184.5

Inventories

66.2

OthersFYE2019

FYE2020

Results

Q3 results

Interest-bearing liabilities

1,005.4

1,016.4

+11.0

-13.4

Trade payables

105.9

93.1

-12.8

73.5

+7.3

Others

223.7

218.1

-5.6

23.2

26.6

+3.4

Total liabilities

1,335.1

1,327.7

-7.4

347.1

358.5

+11.4

Share capital and capitalsurplus, etc

429.5

464.1

+34.6

Property, plant and equipment*

639.3

664.7

+25.4

Other components of equity

-22.9

-37.3

-14.4

Goodwill

437.7

434.4

-3.3

Intangible assets

253.8

242.2

-11.6

406.6

426.7

+20.1

Others

92.9

85.6

-7.3

29.2

31.2

+2.0

1,423.8

1,427.1

+3.3

435.8

457.9

+22.1

1,771.0

1,785.7+14.7(Billions of yen)

Total current assets

Total non-current assets

Total assets

1,771.01,785.7

YoY Change+14.7

Equity attributableto owners of parent
Non-controlling interests

Total equity
Total liabilities
and equity* As a result of the application of IFRS 16, the carrying amount of the TNSC Group’s lease-related assets increased by ¥34.1 billion
and lease liabilities simultaneously increased by ¥34.6 billion on the day starting the application of IFRS 16.

16

YoY ChangeKey Performance Indicators (Consolidated)
FYE2019
Q3 results

FYE2020
Q3 results

FYE2019
Results

FYE2020
Forecast

Basic earnings per share (Yen)

62.93

95.57

95.42

124.78Overseas sales ratio

45.4%

56.2%

47.9%

55.0%

ROE

－－

10.4%

12.9%

ROCE

－－

6.2%

6.5%

Annual dividends per share (Yen)

－－

25

28

Dividend payout ratio

－－

26.2%

22.4%

Capital expenditures

53,52754,38974,15277,600645,865548

691,126－

36,881

63,073

56,11185,0001,011,415

1,016,408

1,005,402

991,900

932,167

942,616

945,782

914,400(fund basis)(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)

* Investment and loans shown above represent investment and loans under cash flows from investing activities(purchase of investment securities, purchase of shares of subsidiaries, and payments for acquisition of businesses).

17

Sales mix by business

Energy6%
Medical8%

Electronics
17%

FYE2020
Q3 results¥613.5 billion(excluding Thermos)

18

IndustrialGases
69%

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

Acetylene

Customers

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

Packaged gases
Dewarvessel(liquid)

Carbondioxide gas

HydrogenHeliumLPG

Specialty
gases

Acetylene

19Disclaimer●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 when
making investment decisions.

20