Supplementary Materials forConsolidated Business Performancefor FYE2017

May 10, 2017TAIYO NIPPON SANSO Corporation
11Contents
１. Business Performance for FYE2017
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）Business Combinations3）Key performance indicators
4）Sales mix by industry
5）TNSC’s Gas Supply Structure21-1. Overview of business performance(Billions of yen)

FYE2016

YoY Change
MarginRevenue

FYE2017Forecast

FYE2017594.4

Margin581.5(Announced Feb. 7)

Margin-12.9

580.0
-2.2%

Core operating income

47.4

Non-recurring profit and loss

1.4

-1.0

-2.4

1.0

Operating income

48.9

53.6

+4.7

55.0

Finance costs

-2.3

-3.4

-1.1

-3.3

Income before income taxes

46.5

50.1

+3.6

51.7

16.0

13.9

-2.1

17.1

30.5

36.2

+5.7

34.6

Net income attributable to owners of theparent

29.0

34.7

+5.7

33.0

Net income attributable to non-controlling interests

1.4

Income tax expenses
Net income

54.7
8.0%

+7.39.4%

8.2%

54.0

+15.3%

9.2%

9.3%

+9.7%

9.5%

(Attribution of net income)

4.9%

6.0%

1.4

Impact of foreign currency translations (US$→¥): FYE2016 rate: $1=¥120.16 FYE2017 rate: $1=¥108.72→Impact of currency gains led to decreases of ¥23.7 billion in revenue and ¥1.7 billion in core operating income
Reversal of deferred tax liability occurred in the US（Income tax for FYE2017 of -¥1.1 billion）

3+19.7%

+0.0

5.7%

1.6

1-1. Overview of business performance【Revenue】
FYE2017
Forecast

FYE2016
ResultsFYE2017
Results% Change

Gas Business in Japan

327.9

321.4-2.0%

321.0

Gas Business in the U.S.

149.5

147.2-1.5%

150.0

Gas Business in Asia and Oceania

89.3

85.8

-3.9%

81.0

Thermos and Other businesses

27.5

27.0

-1.9%

28.0

Revenue Total

594.4

581.5

-2.2%

580.0

FYE2016
ResultsFYE2017
Results% Change

FYE2017
Forecast

Gas Business in Japan

27.8

29.4

+5.7%

29.0

Gas Business in the U.S.

9.2

12.0

+30.7%

11.3

Gas Business in Asia and Oceania

3.0

5.1+71.6%

5.5

Thermos and Other businesses

9.010.0+11.3%

10.0

Eliminations or Corporate-1.6-1.9-19.7%-1.8

Core operating income Total

47.4

54.7

+15.3%

54.0

Non-recurring profit and loss

1.4-1.0-173.0%1.0

Operating income Total

48.9

53.6

+9.7%

55.0

(Billions of yen)

(Announced Feb. 7)【Operating income】(Billions of yen)

4

(Announced Feb. 7)

1-2. Business Performance by Segment: Gas Business in JapanFYE2016(Billions of yen)

Industrial Gas

RevenueElectronics

Energy% Change

Bulk gases

78.2

76.3

-2.4%

On-site gases

48.6

46.4

-4.7%

Packaged gases

11.7

11.7-0.2%

Hard goods

24.5

23.2-5.1%

Plants and Equipments

43.5

41.7

-4.2%

Medical

23.8

23.4

-1.7%

Total

230.6

223.0-3.3%

Gases

43.6

46.5

+6.8%

Equipment and Installation

24.2

24.6

+1.4%

Total

67.8

71.1

+4.9%

LP gas

26.5

24.2

-8.4%

Related Equipment

2.8

2.9+0.7%

Total

29.4

27.2

-7.5%

Revenue Total

327.9

321.4

-2.0%

27.8

29.4

+5.7%

Segment income

Reasons for changes in revenue

Reason for change in segment income

・Sales of hydrogen stations decreased in plants and equipment•Reduced costs due to the falling oil price・Strong shipments of electronics gas for LCDs and semiconductors•Segment income increased in line with higher revenue from・Sales of LP gas decreased due to the impact of the falling oil price

5FYE2017

electronics gas

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

FYE2016

FYE2017% Change

Bulk gases

45.5

54.9

+20.6%

On-site gases

5.2

6.1

+16.0%

Packaged gases

51.7

47.2

-8.8%

Hard goods

33.4

28.4

-15.1%

Plants and Equipment1.0

0.0-100.0%

Total

137.1

136.6

-0.3%

Gases

10.6

8.4

-20.6%

Equipment and Installation

1.7

2.1

+19.7%

Total

12.4

10.5

-14.8%

Revenue Total

149.5

147.2

-1.5%

9.2

12.0

+30.7%

Industrial Gas
RevenueElectronics

Segment income※Impact of yen appreciation on currency translations
Revenue decreased by ¥14.2 billion and segment income by ¥0.9 billion

Reasons for changes in revenue
・Sales of bulk gases were firm (particularly carbon dioxidegas), but hard goods fell・Recognition of business acquired from Air Liquidecontributed ¥14.7 billion from September

6

Reason for change in segment income・Higher segment income from brisk sales of carbon dioxide
gas to food and beverage manufacturers
・Recognition of business acquired from Air Liquide
contributed ¥1.9 billion

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

FYE2016

Industrial Gas
RevenueElectronics

FYE2017% Change

Bulk gases

245

270

+10.0%

On-site gases

3026-11.0%

Packaged gases

56

47-15.4%

Hard goods

96

58-40.0%

Plants and Equipment

104

115

+11.1%

Total533

519-2.7%Gases

314267-14.9%

Equipment and Installation

4572+57.5%

Total

360

339-5.7%

Revenue Total

893858-3.9%

3051+71.6%

Segment income※Impact of yen appreciation on currency translations
Revenue decreased by ¥9.1 billion and segment income by ¥0.5 billion

Reasons for changes in revenue◆Industrial gas-related business・Philippines business was strong
・Contribution from M&A ¥7.0 billion (Thailand and Australia)
・Impact of change in subsidiaries’ business-year ends

(FYE2016: Singapore 15-month settlement; FYE2017: Thailand &Australia 15-month settlement) -¥5.5 billion◆Electronics-related business・Higher revenue from large orders recorded in equipment
and installation, despite sales decreased in gas

7

Reason for change in segment income◆Industrial gas-related business・Segment income increased in line with higher revenue in
the Philippines
・Contribution from M&A ¥1.1 billion (Thailand and Australia)
・Impact of change in subsidiaries’ business-year ends ¥0.3billion
・Impairment loss on gas manufacturing facility in Singapore¥1.8 billion (business-year end FYE2016)
・Impairment loss on businesses in Singapore and China ¥0.2billion (business-year ends FYE2017)

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

FYE2016

FYE2017% ChangeJapan

21.9

20.7-5.8%

Asia

2.8

3.9+38.2%

Total

24.8

24.6

-0.7%

Other

2.6

2.3

-13.3%

Revenue Total

27.5

27.0

-1.9%

9.0

10.0

+11.3%

Thermos
Revenue

Segment income※Impact of yen appreciation on currency translations
Revenue decreased by ¥0.3 billion and segment income by ¥0.3 billion

Reasons for changes in revenue◆Thermos Business・Growth in inbound demand settled down

Reason for change in segment income◆Thermos Business・Cost reduction effect on imports due to appreciation of theyen
・Equity in earnings of affiliates increased due to strong
performances by overseas affiliates

82-1. Full-Year Forecasts for FYE2018(Billions of yen)

FYE2017
Results
Margin

Revenue

581.5

FYE2017
Forecast
Margin620.0

YoY 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-1.00.5+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 ofthe 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=¥110

9

Reversal 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
ResultsFYE2018
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
Results

FYE2018
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

-1.00.5-146.6%

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(Billions of yen)

FY2016
results

FYE2017
results

YoY changeCore operating income

47.4

54.7+7.3

Non-recurring profit and loss

1.4

-1.0-2.4

Operating income

48.9

53.6+4.7【Non-recurring Income and Expense Items】
FYE2017 Results
for the fiscal year ended 2017/3

FY2016 results
Item
Gain on step acquisition recorded onAPI company in Thailand

Item\1.8 billion Gain on sales of domestic land

Impairment loss on idle domestic land

ー\0.3 billion Gain on sales of Asian land

Otherー\0.1 billion

Total

12Am ount

Am ount\0.8 billion\0.2 billion

Impairment loss on equity method
investment book value (U.S.)

ー\1.9 billion

Impairment loss on domestic idling land

ー\0.1 billion

Otherー\0.0 billion\1.4 billion Total

ー\1.0 billion

Business Combinations【Details of business combinations】
Certain U.S. assets divested byAir LiquideSupagas Holdings Pty Ltd

Acquisition date

September 8, 2016

December 16, 2016

Purchase amount\77.4 billion\21.6 billion *1

Amount of goodw ill\27.0 billion\13.7 billion

Amount of revenue includedin results\14.7 billion\2.1 billion

Amount of operating income
included in results\1.9 billion\0.2 billion*Note 1: The purchase amount of Supagas is shown by the amount of acquisition equivalent (cash paid, shares issued).
In addition to this, the Group has made cash loans of ¥7.7 billion to Supagas.
*Note 2: The above figures are approximate calculations and may be changed depending on the result of an accounting
audit.

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Key Performance Indicators (Consolidated)
FYE2016
Results

FYE2017
Results

FYE2018
Forecast

Basic earnings per share (Yen)

67.08

80.28

79.72

ROE

9.1%

10.3%

9.5%

ROCE

8.1%

8.4%

7.9%

Annual dividends per share (Yen)

16

20

22.00

Dividend payout ratio

23.9%

24.9%

27.6%

Capital expenditures

52,657

43,79666,00025,507102,034-39,696

40,04844,000266,215

359,528

343,000

215,492

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)

14

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

60%

Oxygen17%

34%

Nitrogen

22%

39%

Argon
0%

10%

20%

30%

23%

3%

14%

40%

50%

4%

16%
60%

19%

3%

ChemicalsElectronic equipment &semiconductors
Shipbuilding, machinery,transportation equipment
Others

17%

28%
70%

80%

90%

100%

【Net Sales Mix by Industry】
Steel and other metalsSeparateGases(O2, N2, Ar)

20%

8%

Total Sales

0%

15

21%

9%
10%

18%

23%
20%

30%

10%

8%
40%

31%

ChemicalsElectronic equipment &semiconductors
Shipbuilding, machinery,transportation equipment
Others

52%
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 gasesOxygen

Nitrogen

Argon

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

Import fromoverseas incontainers, etc.

Carbondioxide gas

HydrogenHeliumLPG

Specialty
gases

Acetylene

16

Packaged gases
Dewar
vessel(liquid)

Customers

Carbondioxide gas

HydrogenHeliumLPG

Specialty
gases

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 market
conditions, 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.

17