Supplementary Materials forConsolidated Business Performancefor the First Quarter of FYE2019

July 30, 2018TAIYO NIPPON SANSO Corporation
11Contents
１. Business Performance for First Quarter of FYE2019
1) Overview of business performance2) Business performance by segment
２. Full-Year Forecasts for FYE2019
1) Overview of forecasts for the full-year2) Forecasts by segment for the full-year
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)

FYE2018Q1 Results
Margin150.8

Revenue

FYE2019
Q1 Results

FYE2019
Forecast
YoY Change

Margin158.6(Announced May 9)

Margin+7.8

670.0
+5.2%

Core operating income

14.0

13.9

Non-recurring profit and loss

0.2

0.8

+0.6

0.5

Operating income

14.3

14.7

+0.4

64.5

Finance costs

-0.7

-0.5

+0.2-4.5

Income before income taxes

13.6

14.2

+0.6

60.0

Income tax expenses

-5.7

-4.0

-1.7

18.0

Net income

7.8

10.1+2.3

42.0

Net income attributable to owners of theparent

7.6

9.6+2.0

40.0

Net income attributable to non-controlling interests

0.2

9.3%

-0.1

64.0

8.8%

9.5%

-0.7%

9.3%

9.6%

+3.1%

9.6%

(Attribution of net income)

5.0%

6.1%

0.4

+27.2%+0.2

Impact of foreign currency translations (US$→¥): FYE2018 Q1 rate: $1=¥111.42 FYE2019 Q1 rate: $1=¥109.53→Impact of currency gains led to decreases of ¥0.7 billion in revenue and ¥0.0 billion in core operating income

36.0%

2.0

1-1. Overview of business performance【Revenue】

FYE2018
Q1 Results
Results

FYE2019
Q1 Results
Results% ChangeGas Business in Japan*

78.6

82.6+5.1%

360.0

Gas Business in the U.S.

41.7

44.5+6.5%

175.0

Gas Business in Asia and Oceania

23.8

25.1+5.3%

107.0

Thermos Business*

6.5

6.3-3.2%

28.0

Revenue Total

150.8

158.6+5.2%

670.0

FYE2018
Q1 Results
Results

FYE2019
Q1 Results
Results% Change

FYE2019
Forecast

Gas Business in Japan*

7.4

6.1-17.7%

31.8

Gas Business in the U.S.

3.1

3.1-0.2%

14.0

Gas Business in Asia and Oceania

2.0

3.3+64.1%

10.7

Thermos Business*

2.0

1.7-15.9%9.3

Eliminations or Corporate-0.6-0.3－-1.8

Core operating income Total

14.0

13.9

-0.7%

64.0

Non-recurring profit and loss

0.20.8－0.5

Operating income Total

14.3

14.7

+3.1%

64.5

(Billions of yen)

【Operating income】(Billions of yen)

4FYE2019
Forecast(Announced May 9)(Announced May 9)* From FYE2019, businesses other than the Thermos business that had previously been classified under the “Thermos and Other Businesses”
segment have been transferred to the “Gas Business in Japan.”
The columns in the above table have been adjusted to reflect the transfer in order to use the same basis of comparison.

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

Industrial Gas

RevenueElectronics

EnergyFYE2019

Q1Q1% Change

Bulk gases

19.3

19.7

+1.8%

On-site gases

12.0

16.8

+40.3%

Packaged gases

2.7

2.7

-1.1%

Hard goods

5.8

5.7

-1.9%

Plants and Equipments

8.9

8.1

-9.5%

Medical

5.3

5.3

+0.8%

Total

54.4

58.6

+7.8%

Gases

11.8

11.5-3.2%

Equipment and Installation

5.2

5.2

-1.2%

Total

17.1

16.7

-2.6%

LP gas

6.4

6.6

+3.9%

Related Equipment

0.6

0.6-6.3%

Total

7.0

7.2

+2.9%

Revenue Total

78.6

82.6

+5.1%

7.4

6.1

-17.7%

Segment income

5FYE2018

Reasons for changes in revenue

Reason for change in segment income

・ On-site: JFE SANSO CENTER Kurashiki Factory
contributed to revenue
・Electronics Gases: Weaker shipments for someproduct areas
・LP gas: Higher sales price due to the impact of anincrease in the import price・Higher costs due to rising crude oil prices
・Higher costs mainly due to a lack of a raw materialgas for carbon dioxide gas
・Electronics-related installation: Absence of ahighly profitable project recorded in the previous
fiscal year

1-2. Business Performance by Segment: Gas Business in the U.S.
FYE2018
Q1(Billions of yen)

FYE2019
Q1% Change

Bulk gases

17.1

18.7

+9.4%

On-site gases

2.7

2.3

-13.5%

Packaged gases

11.4

11.5

+0.6%

Hard goods

7.6

8.7

+14.5%

Total

38.9

41.3

+6.2%

Gases

1.9

1.6

-16.7%

Equipment and Installation

0.8

1.5

+73.9%

Total

2.8

3.1

+10.7%

Revenue Total

41.7

44.5+6.5%

3.1

3.1

-0.2%

Industrial Gas
RevenueElectronics

Segment income※Impact of yen appreciation on currency translations
Revenue decreased by ¥0.7 billion and segment income by ¥0.0 billion

Reasons for changes in revenue
・Bulk gas: Increased shipments of air separation
gases and carbon dioxide gas
・Hard goods: Favorable sales for energy industry
・Electronics equipment: Increased sales forsemiconductor related equipment

6

Reason for change in segment income
・Higher segment income due to increased revenue
from bulk gas and hard goods
・Electronics-related business: Profits were flat fromthe previous year (gas decreased while equipment
and installation increased)1-2. Business Performance by Segment: Gas Business in Asia and Oceania
FYE2018
Q1(Billions of yen)

Industrial Gas
RevenueElectronics

FYE2019
Q1% Change

Bulk gases

8.0

10.2

+26.8%

On-site gases

0.6

0.7

+4.3%

Packaged gases

1.3

1.3

+2.1%

Hard goods

1.2

1.1

-7.9%

Plants and Equipment

2.9

3.6

+25.8%

Total

14.2

17.1

+20.2%

Gases

7.5

6.8

-8.3%

Equipment and Installation

2.0

1.0-47.5%

Total

9.57.9-16.9%

Revenue Total

23.8

25.1+5.3%

2.0

3.3+64.1%

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◆Industrial gas-related business・Higher revenue for industrial gases in China,
and revenue recovered in Leeden NOX・Australia: Sales of LPG and related equipment
were favorable◆Electronics-related business・Taiwan: Revenue from electronics-related
equipment and installation decreased
7Reason for change in segment income◆Industrial gas-related business・Increased segment income from China
industrial gases and from Leeden NOX・Increased segment income due to higher
revenue in Australia◆Electronics-related business・Profits from gases, equipment and installation
were flat1-2. Business Performance by Segment: Thermos Business
FYE2018
Q1(Billions of yen)

RevenueThermos

FYE2019
Q1% ChangeJapan

5.8

5.3-7.4%

Asia

0.70.9+30.0%

Revenue Total

6.5

6.3-3.2%

2.0

1.7-15.9%

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

8Reasons for changes in revenue

Reason for change in segment income

・Japan: Sales of mainstay products of vacuum
insulated portable mugs were weak・Overseas: Sales in South Korea were firm

・Japan: Segment income decreased due to decline
in sales volume
・Overseas: Soft business performance by Group
companies accounted for by the equity method

2-1. Full-Year Forecasts for FYE2019(Billions of yen)

FYE2018
Results
Margin

Revenue

646.2

FYE2019
Forecast

YoY Change

Margin670.0% Change

+23.8
+3.7%

Core operating income

60

64.0
9.3%

+4.09.6%+6.6%

Non-recurring profit and loss

-0.1

0.5

+0.6

Operating income

59.8

64.5

+4.7

9.3%

9.6%

+7.7%

Finance costs-3.9-4.5-0.6

Income before income taxes

55.8

60.0

+4.2

Income tax expenses

5.1

18.0

+12.9

Net income

50.7

42.0-8.7

Net income attributable to owners ofthe parent

48.9

40.0-8.9

Net income for the year attributable to noncontrolling interests

1.8(Attribution of net income)

7.6%

6.0%

2.0

Assumed exchange rate (US$→¥): $1=¥105 *FYE2018 rate: $1=¥110.70
In FYE2018, income tax expenses decreased by ¥12.2 billion due to the reversal of deferred tax liabilities ata subsidiary based in the U.S.

9-18.2%0.2

2-2. Full-Year Forecasts for FYE2019 by Segment【Revenue】
FYE2018
Results

FYE2019
Forecast% Change

Gas Business in Japan*

345.0

360.0+4.3%

Gas Business in U.S.

172.6

175.0+1.4%

Gas Business in Asia and Oceania

103.1

107.0+3.7%

Thermos Business*

25.3

28.0+10.4%

Revenue Total

646.2

670.0+3.7%

FYE2018
Results

FYE2019
Forecast% Change

Gas Business in Japan*31.331.8+1.3%

Gas Business in U.S.

13.5

14.0+3.3%

Gas Business in Asia and Oceania

9.2

10.7+15.9%

Thermos Business*

7.7

9.3+20.0%

Eliminations or Corporate-1.8-1.8－

Core operating income Total

60.0

64.0

+6.6%

Non-recurring profit and loss

-0.1

0.5

－

Operating income Total

59.8

64.5

+7.7%

(Billions of yen)

【Operating income】(Billions of yen)

* From FYE2019, businesses other than the Thermos business that had previously been classified under the “Thermos and Other Businesses”
segment have been transferred to the “Gas Business in Japan” segment.
The columns in the above table have been adjusted to reflect the transfer in order to use the same basis of comparison.

10

(Reference Materials)

11Non-recurring Income and Expense Items
FYE2018
Q1 results

FYE2019
Q1 results

YoY changeCore operating income

14.0

13.9-0.1

Non-recurring profit and loss

0.2

0.8+0.6

Operating income

14.3

14.7+0.4(Billions of yen)【Non-recurring Income and Expense Items】
FYE2018 Q1 results
Item
Gain on sales of domestic landTotal

12FYE2019 Q1 Results
AmountItem(Billions of yen)
0.2 Gain on sales of domestic land

Amount(Billions of yen)
+0.9

Other-0.1

0.2 Total

0.8Key Performance Indicators (Consolidated)
FYE2018
Q1 Results

FYE2019
Q1 Results

FYE2018
Results

FYE2019
Forecast

Basic earnings per share (Yen)

17.59

22.38

113.04

92.43

Overseas sales ratio

44.0%

44.5%

43.3%

－ROE

－

－

13.3%

9.6%

ROCE

－

－

8.4%

8.5%

Annual dividends per share (Yen)

－－

2324

Dividend payout ratio

－－

20.3%

26.0%

Capital expenditures

13,296

17,78162,56979,000

2,632

603

4,556

－

10,810

11,241

43,26647,000353,190

337,562

326,959

339,000

306,587

286,120274,968

289,000(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)With regard to FYE2018 full-year results, excluding the effects of the significant decrease in income taxes resulting from the reduction of
the federal corporate income tax rate under the Tax Cuts and Jobs Act in the U.S., basic earnings per share would be ¥84.87, ROE
10.1%, ROCE 8.5% and the dividend payout ratio 27.1%.

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

67%

Oxygen11%

38%

Nitrogen

19%

45%

Argon
0%

10%

20%

3%
30%

40%

20%

16%

50%

2%

4%

18%

60%

70%

19%

ChemicalsElectronic equipment &semiconductors
Shipbuilding, machinery,transportation equipment
Others

19%

18%
80%

90%

100%

【Net Sales Mix by Industry】
Steel and other metals

SeparateGases(O2, N2, Ar)

29%

10%

Total Sales

0%

1422%

12%
10%

20%

21%
30%

17%10%

9%
40%

50%

22%

ChemicalsElectronic equipment &semiconductors
Shipbuilding, machinery,transportation equipment
Others

48%
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

Specialty
gases

Acetylene

15

Packaged gases
Dewar
vessel(liquid)

Customers

Carbondioxide gas

HydrogenHeliumLPG

Specialtygases

Acetylene

・Steel andnonferrous metals
・Electronics
・Petroleum andchemicals
・Automobiles andindustrial
machinery・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 containedin this presentation is accurate and complete.
●This presentation and report contain forward-looking statements(estimates and forecasts) regarding the future plans, strategies, activities
and performance of Taiyo Nippon Sanso Corporation. Forward-lookingstatements reflect management’s assumptions and beliefs based on
information available as of the time of writing. Actual results reflect a varietyof risk and uncertainties. These risks and uncertainties include, but are notlimited to, changes in general economic and specific market conditions,currency exchange rate fluctuations, tax systems, and regulations.
●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.

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