Supplementary Materials forConsolidated Business Performancefor FYE2020

May 12, 2020
TAIYO NIPPON SANSO Corporation11Contents
１. Business Performance for FYE2020
1) Overview of business performance2) Business performance by segment

２. Full-Year Forecasts for FYE2021
1) Overview of forecasts 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
Results(Billions of yen)Margin740.3

Revenue

FYE2020
ForecastFYE2020
Results

YoY Change(Announced Feb. 5)

Margin850.2

Margin+109.9855.0+14.8%

65.8

Core operating income

90.3
8.9%

Non-recurring profit and loss

1.0

Operating income

66.8

+24.5
10.6%

3.5

+2.5

93.9
9.0%

91.5

+37.2%

3.5

+27.1
11.0%

10.7%

95.0

+40.5%

11.1%

Finance costs

-4.7

-14.7

-10.0

-14.5

Income before income taxes

62.0

79.1

+17.1

80.5

Income tax expenses

-18.3

-24.0

+5.7

-24.5

Net income

43.7

55.0

+11.3

56.0

Net income attributable to ownersof the parent

41.2

53.3

+12.1

54.0

Net income attributable to non-controlling interests

2.4(Attribution of net income)

5.6%

6.3%

1.6

+29.2%

-0.8

6.3%

2.0

Foreign currency translations (average rate during the period)
Unit：JPY
FYE2019
FYE2020USD
111.07108.95EUR
125.70120.85

AUD
80.77
73.81

In FYE2019, European business acquisition-related expenses (advisory fees, etc.) of ¥2.7 billion had been recorded.

31-1. Overview of business performance【Revenue】
FYE2019
Results

FYE2020
Results% Change

FYE2020
Forecast(Announced Feb. 5)

Gas Business in Japan

363.9

356.1

-2.1%

360.0

Gas Business in the U.S.

187.3

198.8

+6.2%

199.0

Gas Business in Europe

55.1

165.5

-164.0Gas Business in Asia and Oceania

106.1

104.5

-1.5%

105.0

Thermos Business

27.8

25.1

-9.6%

27.0

Revenue Total

740.3

850.2

+14.8%

855.0

FYE2019
Results

FYE2020
Results% Change

FYE2020
Forecast(Announced Feb. 5)

Gas Business in Japan

29.8

28.7

-3.6%

27.8Gas Business in the U.S.

15.6

22.2+42.4%

22.0

Gas Business in Europe

6.5

24.8-25.0

Gas Business in Asia and Oceania

9.1

9.9+8.8%

10.7

Thermos Business

9.1

7.2

-21.4%

8.2

Eliminations or Corporate*-4.5-2.6--2.2

Core operating income Total

65.8

90.3

+37.2%

91.5

Non-recurring profit and loss

1.0

3.5-

3.5

Operating income Total

66.8

93.9

+40.5%

95.0(Billions of yen)

【Operating income】(Billions of yen)

* Eliminations or Corporate：European business acquisition-related expenses (advisory fees, etc.) of ¥2.7 billion had been recorded in the FYE2019 results.

4

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

FYE2020

ResultsResults% Change

Air separation gases, other

15.5

15.5+0.0%

Packaged subtotal

15.5

15.5+0.0%

Air separation gases

50.5

48.1

-4.6%

Carbon dioxide

23.3

22.7-2.7%

Helium

4.4

4.6+3.8%

Other gases

9.9

10.0+0.4%

Bulk subtotal

88.3

85.5

-3.1%

Air separation gases

75.0

71.1-5.2%

Other gases

6.9

6.4

-7.0%

On-site subtotal

81.9

77.5-5.4%

LP gas33.5

29.0-13.3%

Specialty gases

25.7

26.4

+2.5%

Subtotal

245.1

234.2

-4.5%

Gas-related and plant, other

71.3

77.7

+9.0%

Electronics-related

20.6

19.5

-5.3%

Welding and cutting-related

26.8

24.6

-8.2%

Subtotal

118.7

121.9

+2.6%

Revenue Total

363.9

356.1

-2.1%

29.8

28.7

-3.6%

Packaged

Bulk

Gases

On-siteRevenueEquipment and installation,
other

Segment income

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

5FYE2019

Reason for change in segment income
・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.

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

Packaged

BulkGasesOn-site

Revenue

FYE2020

Results

Results% Change

Air separation gases, other

46.5

46.5+0.0%

Packaged subtotal

46.5

46.5+0.0%

Air separation gases

35.7

36.5+2.4%

Carbon dioxide

23.9

25.5+6.4%

Helium

5.8

5.9+2.5%

Other gases

10.9

11.1+1.7%

Bulk subtotal

76.4

79.1+3.6%

Air separation gases

8.0

9.8+22.9%

Other gases

2.6

13.3

－On-site subtotal

10.7

23.2+116.2%

LP gas5.3

4.4-16.4%

Specialty gases

7.0

6.3-10.3%

Subtotal

146.1

159.7

+9.3%

Electronics-related

4.9

4.9-0.4%

Welding and cutting-related

36.1

34.1

-5.7%

Subtotal

41.1

39.1

-5.0%

Revenue Total

187.3

198.8

+6.2%

15.6

22.2

+42.4%

Equipment and installation,otherFYE2019

Segment income*Impact of foreign currency translation: Negative impacts of ¥3.57 billion on revenue and ¥0.30 billion on segment income

Reasons for changes in revenue
・Bulk: Favorable shipments centered around air separation gases.
Carbon dioxide gas shipments increased with the start of operations
at a new plant・On-site: Start of operation of new projects, contribution fromacquisition of HyCO business

6

Reason for change in segment income
・Industrial gas-related business was generally favorable,
centered on air separation gases.
・Bulk: Production and logistics costs increased・Contribution from acquisition of HyCO business1-2. Business Performance by Segment: Gas Business in Europe(Billions of yen)

Results

Results

10.1

30.8

Packaged subtotal

10.1

30.8

Air separation gases

13.6

39.3

Carbon dioxide

8.2

26.5

Helium

2.2

8.3

Other gases

3.8

11.7

Bulk subtotal

27.9

85.9

Air separation gases

8.0

22.3

Other gases1.3

3.7

On-site subtotal

9.4

26.0

2.8

8.2

Subtotal

50.3

151.1

Gas-related and plant, other

3.8

11.4

Welding and cutting-related

0.9

2.9

Subtotal

4.7

14.3

Revenue Total

55.1

165.5

6.5

24.8

Bulk
Gases

On-siteSpecialty gases

Equipment and installation,otherFYE2020

Air separation gases, other

Packaged

Revenue

FYE2019

Segment income*Impact of foreign currency translation: Negative impacts of ¥2.12 billion on revenue and ¥0.25 billion on segment income

Results from the European gas business acquired from Praxair, Inc. in December 2018 began presenting as The Gas Business in Europe(Results for FYE2019 were for fourth months from December 2018 to March 2019)・Revenue increased 1.4% year on year to ¥163.4 billion for the Gas Business in Europe from April 1, 2018 to March 31, 2019, assuming theacquisition date of the European business was April 1, 2018.
(The rate of €1=¥120.85 applicable for the FYE2020 has been used for conversions to yen)In the industrial gas-related business, revenue decreased year on year in the on-site business in Spain, but increased mainly bulk gas inGermany, the Benelux countries and northern Europe. Revenue decreased year on year in Spain and Italy in March 2020 due to the spreadof COVID-19.

7

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

FYE2020

Results

Results% Change

Air separation gases, other

3.9

3.5-8.1%

Packaged subtotal

3.9

3.5-8.1%

Air separation gases

18.4

15.8-14.2%

Carbon dioxide

1.6

1.9

+12.6%

Helium

4.8

5.7+18.9%

Other gases

2.9

2.7-6.7%

Bulk subtotal

27.9

26.2-6.1%

Air separation gases3.6

3.7+2.1%

On-site subtotal

3.6

3.7+2.1%

LP gas

14.1

14.1

-0.0%

Specialty gases

28.9

27.4-5.3%

Subtotal

78.5

75.0

-4.4%

Gas-related and plant, other

17.8

17.4-2.2%

Electronics-related

4.8

6.8+42.2%

Welding and cutting-related

4.9

5.2+4.5%

Subtotal

27.5

29.4+6.7%

Revenue Total

106.1

104.5

-1.5%

9.1

9.9

+8.8%

Packaged

Bulk
Gases

On-siteRevenueEquipment and installation,otherFYE2019

Segment income*Impact of foreign currency translation: Negative impacts of ¥3.91 billion on revenue and ¥0.41 billion on segment income

Reasons for changes in revenue
・Bulk (Air separation gases): Revenue decreased significantly,mainly in China
・LPG: Sales in Australia were favorable
・Specialty gases: Shipments of electronic materials gases on a paryear on year
・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
・Decreased due to lower profits for electronics materials gas
・Impairment loss of ¥1.3 billion in the natural gas liquefaction
business*1 at Leeden NOX recorded in 4Q FYE2019*1 In the natural gas liquefaction business*2 under way in Indonesia, the Company recorded impairment losses on assets contributed tothis business due to a decline in future profitability following drastic changes in the market environment surrounding raw material and fuel.
*2 A business in which the Company is commissioned by an Indonesian electric power utility to liquefy natural gas for power generationand transport the gas to outlying islands in Indonesia.

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

Revenue

FYE2019

FYE2020

ResultsResults% ChangeJapan

22.0

21.8

-0.9%

Overseas

5.7

3.2-43.1%

27.8

25.1

-9.6%

9.1

7.2

-21.4%

Revenue Total
Segment income*Impact of foreign currency translation: Negative impacts of ¥0.30 billion on revenue and ¥0.10 billion on segment income

Reasons for changes in revenue
・Japan: Sales volume of key products were down due tounseasonable weather (cool summer, warm winter) and spread of
COVID-19. Frying pan sales increased
・Overseas: Significant change in the sales environment in South
Korea. Operating rate at production plants slumped due to spread ofCOVID-19.

9Reason for change in segment income
・Japan: Decreased earnings due to lower revenue
・Overseas: Decreased earnings due to lower revenue in South
Korea. Decreased due to lower operation rate at production plants.
Sales slowed at group companies accounted for by the equity
method

2-1. Full-Year Forecasts for FYE2021(Billions of yen)

Revenue

FYE2020

FYE2021

Results
MarginForecast
MarginYoY Change

850.2

830.0

-20.2% Change

-2.4%

90.3

Core operating income

82.0

10.6%

3.5

Non-recurring profit and loss

9.9%

0.0

93.9

Operating income

-8.3
-3.5

82.0

11.0%

-9.2%

-11.9
9.9%

-12.7%

Finance costs

-14.7

-14.5

+0.2

Income before income taxes

79.1

67.5

-11.6

Income tax expenses

-24.0

-21.5

-2.5

Net income

55.0

46.0

-9.0

Net income attributable to ownersof the parent

53.3

44.0

-9.3

Net income for the year attributable to non-controlling interests

1.6(Attribution of net income)6.3%

Foreign currency translations (average rate during the period)
Unit：JPY
FYE2021 est.
FYE2020 actual

10USD108108.95

EUR120120.855.3%

2.0-17.5%+0.4

(Reference Materials)

11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

Breakdown

Gases

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

Packaged
Air separation gases, otherAll gases including air separation gases (oxygen, nitrogen, argon that are created by separation from the atmosphere)
A storage tank for liquified gas is installed within the customer’s facility, and the gas is supplied according to method of use

Bulk
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, other12Gas filling containers (cylinders) are delivered to the customer, and the gas is supplied according to method of use

Ancillary 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-relatedConstruction 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Non-recurring Income and Expense Items

FYE2019
Results

FYE2020
Results

YoY changeCore operating income

65.8

90.3

+24.5

Non-recurring profit and loss

1.0

3.5+2.5

Operating income

66.8

93.9

+27.1

(Billions of yen)【Non-recurring Income and Expense Items】
FYE2019 Results
Item

FYE2020 Results
AmountItem(Billions of yen)

Gain on sales of domestic land

1.3 Gain on sales of domestic land, etc.

Other-0.3

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

Total

13

1.0 Total

Amount(Billions of yen)

6.5
-0.5
-2.4
3.5

Condensed Consolidated Statements of Cash FlowsFYE2019

FYE2020

Results

Results

Income before income taxes

62.0

79.1

+17.1

Depreciation and amortization

56.1

83.7

+27.6

Changes in working capital

-2.4

3.1

+5.5

Others

-17.0-16.0

+1.0

98.6

150.0+51.4

Capital expenditures

-74.1

-72.8

+1.3

Investments and loans-691.1-0.7+690.4

Others (asset sales, etc.)

10.3

10.9+0.6(2) Cash flows from investing activities-754.9-62.6+692.3

Free cash flow (1+2)-656.287.4+743.6

Net interest-bearing liabilities

945.7

898.3

-47.4

Adjusted net D/E ratio

1.54

1.45

-0.09

(Billions of yen)

(1) Cash flows from operating activities

YoY change

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.

14

Condensed Consolidated Statements of Financial Position

FYE2019

FYE2020

Results

Results

Cash and cash equivalents

59.6

100.0

+40.4

Trade receivables

197.9

179.2

Inventories

66.2

Others(Billions of yen)

Total current assets

FYE2019

FYE2020

Results

Results

Interest-bearing liabilities

1,005.4

998.3

-7.1

-18.7

Trade payables

105.9

93.8

-12.1

65.8

-0.4

Others

223.7

218.7

-5.0

23.2

22.1

-1.1

1,335.1

1,311.0

-24.1

347.1

367.3

+20.2

surplus, etc

429.5

472.7

+43.2

Other components of equity

-22.9

-63.4

-40.5

406.6

409.3

+2.7

29.2

31.3

+2.1

435.8

440.6

+4.8

1,771.0

1,751.7-19.3

YoY Change

Total liabilities
Share capital and capital

Property, plant and equipment*

639.3

655.1

+15.8

Goodwill

437.7

419.2

-18.5

Intangible assets

253.8

232.0

-21.8

Others

92.9

77.8

-15.1

Non-controlling interests

Total non-current assets

1,423.8

1,384.4-39.4

Total equity

Total assets

1,771.0

1,751.7-19.3

Equity attributableto owners of parent

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.

15

YoY ChangeKey Performance Indicators (Consolidated)
FYE2019

FYE2020

FYE2021

ResultsResults

Forecast

Basic earnings per share (Yen)

95.42

123.26

101.67

Overseas sales ratio

47.9%

55.5%

-ROE

10.4%

13.1%

10.4%

ROCE

6.2%

6.4%

5.8%

Annual dividends per share (Yen)

2528

28

Dividend payout ratio

26.2%

22.7%

27.5%

Capital expenditures

74,152

72,81094,100691,126733-56,11183,79886,0001,005,402

998,389

970,400

945,782

898,384

881,800(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).

16

Sales mix by business（exc. Thermos business）

9%
2%
6%

8%
8%

FYE2020
Results in Japan

22%¥356.1 bn.

FYE2020

61%

Results in the U.S.

¥198.8 bn.
13%

84%

3%
FYE2020
Results in Europe

Energy¥165.5 bn.
Medical

8%

84%

13%

Electronics

3%

17%

FYE2020
Resultsin Asia and Oceania¥104.5 bn.
41%

176%

43%

FYE2020
Results¥825.1 bn.
(excluding Thermos)

Industrial
Gases
69%

TNSC’s Gas Supply Structure
Separate gases
Supplied via pipeline(on-site)
OxygenNitrogen

CEArgonEvaporatorTanker trucks(bulk gases)
OxygenArgon

NitrogenAir separation unit (ASU)
OxygenNitrogen

Argon

Filling station

Supply via cylinders(packaged gases)

Packaged gases

Other gases
OxygenNitrogen

Argon

Supply via tanker trucks, cylinders(bulk and packaged gases)
Chemicalplant offgas

Import fromoverseas incontainers, etc.

Carbondioxide gas

HydrogenHeliumLPG

Specialty
gases

Acetylene

18

Packaged gases
Dewarvessel(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 when
making investment decisions.

19