Supplementary Materials forConsolidated Business Performancefor FYE2019

May 13, 2019TAIYO NIPPON SANSO Corporation
11Contents
１. Business Performance for FYE2019
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）Statement of non-recurring profit and loss2) Condensed Consolidated Statements of Cash Flows
3) Condensed Consolidated Statements of Financial Position
4）Key performance indicators
5）Sales mix by industry
6）TNSC’s Gas Supply Structure2

1-1. Overview of business performance(Billions of yen)

FYE2018
Results
MarginRevenue

FYE2019
Forecast

FYE2019
Results

646.2

YoY Change(Announced Feb 5)

Margin740.3

Margin

+94.1

735.0

+14.6%

Core operating income

60.0

65.8

Non-recurring profit and loss

-0.1

Operating income

59.8

Finance costs

-3.9

-4.7

-0.8

-5.5

Income before income taxes

55.8

62.0

+6.2

615.0

Income tax expenses

-5.1

-18.3

+13.2

-18.5

Net income

50.7

43.7

-7.0

43.0

Net income attributable to ownersof the parent

48.9

41.2

-7.741.0

Net income for the year attributable to non-controlling interests

1.8

9.3%

+5.8
8.9%

1.0

+1.1

66.8
9.3%

66.5
+9.6%

0.5

+7.0
9.0%

9.0%

67.0
+11.7%

9.1%(Attribution of net income)

7.6%

5.6%

24.0

-15.6%

+0.6

5.6%

2.0

Exchange rates: (US$→¥): FYE2018 rate $1=¥110.70, FYE2019 rate $1=¥111.07, (EUR→¥) FYE2019 rate €1=¥125.70
In the FYE2019 results, European business acquisition-related expenses (advisory fees, etc.) of ¥2.7 billion have been recordedin core operating income.
In the FYE2018 results, the reversal of deferred tax liabilities at a subsidiary based in the U.S., accompanying a reduction of thefederal corporate income tax rate under the U.S. Tax Cuts and Jobs Act, resulted in a decrease of ¥12.2 billion in income taxes.

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

FYE2018
ResultsFYE2019
Results% Change*Gas Business in Japan

345.0

363.9

+5.5%

365.0

Gas Business in the U.S.

172.6

187.3

+8.5%

185.0

Gas Business in Europe-55.1-52.0

Gas Business in Asia and Oceania103.1

106.1+2.9%

104.0

Thermos Business *25.3

27.8+9.6%

29.0

Revenue Total

646.2

740.3

+14.6%

735.0

FYE2018
ResultsFYE2019
Results% Change

FYE2019
Forecast(Billions of yen)

(Announced Feb. 5)【Operating income】(Billions of yen)

(Announced Feb. 5)*

Gas Business in Japan

31.3

29.8-5.0%

29.6

Gas Business in the U.S.

13.5

15.6+15.3%

14.6

Gas Business in Europe-6.5-6.3

Gas Business in Asia and Oceania

9.2

9.1-0.9%

11.0

Thermos Business *7.7

9.1+18.6%

9.5

Eliminations or Corporate**-1.8-4.5--4.5

Core operating income Total

60.0

65.8

+9.6%

66.5

Non-recurring profit and loss-0.1

1.0-0.5

Operating income

59.8

66.8

+11.7%

67.0* From FYE2019, businesses other than the Thermos business that had previously been classified under the “Thermos and Other Businesses” segment have beentransferred 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.
**In the FYE2019 results, European business acquisition-related expenses (advisory fees, etc.) of ¥2.7 billion have been recorded in core operating income.

41-2. Business Performance by Segment: Gas Business in Japan(Billions of yen)

Industrial Gas

RevenueElectronics

EnergyFYE2019

Results

Results% Change

Bulk gases

80.2

80.5

+0.4%

On-site gases

56.7

69.0

+21.8%

Packaged gases

11.4

11.4

+0.2%

Hard goods

23.6

26.8

+13.3%

Plants and Equipments

43.3

45.0

+4.0%

Medical

23.5

26.7

+13.4%

Total

239.0

259.7

+8.7%

Gases

48.2

46.2

-4.0%

Equipment and Installation

26.0

26.4

+1.4%

Total

74.3

72.7-2.1%

LP gas28.8

28.4-1.3%

Related Equipment

2.9

3.0

+3.6%

Total

31.7

31.4-0.9%

Revenue Total

345.0

363.9

+5.5%

31.3

29.8

-5.0%

Segment income

Reasons for changes in revenue
・On-site: JFE SANSO CENTER Kurashiki Factory
contributed to revenue
・Hard goods: Favorable sales of laser cutting machine formetal processing
・Medical: Contribution from acquisition of IMI Co., Ltd.
・Electronics-related: Electronic materials gas shipments
declined5FYE2018

Reason for change in segment income
・Higher costs due to rising fuel prices
・Higher costs mainly due to a lack of a raw material gas
for carbon dioxide gas
・Medical: Contribution from acquisition of IMI Co., Ltd.
・Electronics-related: Earnings declined due to lower
electronic materials gas revenue

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

Industrial Gas
RevenueElectronics

FYE2019
Results% Change

Bulk gases

68.9

76.4

+10.9%

On-site gases

8.8

10.7

+21.8%

Packaged gases

50.8

51.9

+2.1%

Hard goods

32.9

36.1

+9.8%

Total

161.5

175.2+8.5%

Gases

7.2

7.0-3.1%

Equipment and Installation

3.8

4.9+30.3%

Total

11.0

12.0+8.5%

Revenue Total

172.6

187.3+8.5%

13.5

15.6+15.3%

Segment income※Impact of yen appreciation on currency translations
Revenue decreased by ¥0.6 billion and segment income by ¥0.04billion

Reasons for changes in revenue
・Bulk gas: Favorable shipments of air separation gases
・On-site: Start of operation at new project, contribution
from acquisition of HyCO business・Hard goods: Favorable sales to the construction andenergy industries

6

Reason for change in segment income
・Industrial gas-related business: Generally favorable
Growth in earnings due to higher revenues from bulk,
on-site, and packaged gases, and hard goods
・Contribution from acquisition of HyCO business1-2. Business Performance by Segment: Gas Business in Europe
FYE2019
Results(Billions of yen)

Industrial Gas
RevenueElectronics

Bulk gases

26.5

On-site gases

9.4

Packaged gases

10.1

Hard goods

0.9

Plants and Equipment

3.8

Total

50.8

Gases

4.2

Total

4.2

Revenue Total

55.1

Segment income

6.5

・The FYE2019 results 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.
・The FYE2019 results include the following amounts based on purchase price allocation: a ¥0.7
billion increase in cost of sales due to market price valuation of inventories (FYE2019 only),and expenses of ¥3.2 billion due to an increase in depreciation and amortization expenses onproperty, plant and equipment and intangible assets.

71-2. Business Performance by Segment: Gas Business in Asia and Oceania
FYE2018Results(Billions of yen)

Industrial GasRevenueElectronics

FYE2019
Results% Change

Bulk gases

38.1

40.8+7.1%

On-site gases

2.9

3.0+2.4%

Packaged gases

5.5

5.2-4.2%

Hard goods

5.5

4.9-10.4%

Plants and Equipment

13.6

15.9+16.6%

Total

65.8

70.1

+6.4%

Gases

31.0

29.3

-5.3%

Equipment and Installation

6.2

6.6

+6.4%

Total

37.2

36.0-3.3%

Revenue Total

103.1

106.1

+2.9%

9.2

9.1

-0.9%

Segment income※Impact of yen appreciation on currency translations
Revenue decreased by ¥2.1 billion and segment income by ¥0.2 billion

8

Reasons for changes in revenue

Reason for change in segment income◆Industrial gas-related business・Favorable sales of bulk gases in China, Vietnam,
and the Philippines
・Australia: Sales of LPG and related equipment werefavorable◆ Electronics materials gas
・Strong shipments of electronic materials gases in East Asia,
despite a decline in revenues due to the impact of changes
in accounting treatment in Taiwan◆Industrial gas-related business・Higher segment income due to increased revenue frombulk gases
・Decreased segment income due to an increase in purchaseprices for LPG in Australia
・Impairment loss of ¥1.3 billion in the natural gas liquefaction
business*1 at Leeden NOX◆Electronics materials gas
・Increased segment income due to higher revenue fromelectronic materials gases*1 In the natural gas liquefaction business*2 under way in Indonesia, the Company recorded impairment losses on assets contributed to this 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 generation and transport the gas to outlying
islands in Indonesia.

1-2. Business Performance by Segment: Thermos Business
FYE2018
Results(Billions of yen)

% Change

Japan

21.3

22.0+3.3%

Asia

4.0

5.7+43.2%

Revenue Total

25.3

27.8+9.6%

7.7

9.1

+18.6%

Thermos
Revenue

FYE2019
ResultsSegment income※Impact of yen appreciation on currency translations
Revenue increased by ¥0.01 billion and segment income by ¥0.01 billion

9Reasons for changes in revenue

Reason for change in segment income・Japan: Favorable sales led by sports bottles.
Contribution from the launch of a new cookware
product (frying pan).
・Overseas: Favorable sales in South Korea

・Japan: Increased earnings due to higher revenue
・Overseas: Increased earnings due to higher revenue
in South Korea, earnings growth at group companies
accounted for by the equity method

2-1. Full-Year Forecasts for FYE2020(Billions of yen)

FYE2019
Results
Margin

Revenue

740.3

FYE2020
Forecast
Margin890.0

YoY Change% Change+149.7+20.2%

Core operating income

65.8

95.0
8.9%

+29.2

10.7%

+44.3%

Non-recurring profit and loss1.07.0+6.0

Operating income

66.8

102.0

+35.2

9.0%

11.5%

+52.6%

Finance costs

-4.7

-15.5

-10.8

Income before income taxes

62.0

86.5

+24.5

Income tax expenses

-18.3

-27.0

+8.7

Net income

43.7

59.5

+15.8

Net income attributable to ownersof the parent

41.2

57.0

+15.8

Net income for the year attributable to non-controlling interests

2.4(Attribution of net income)

5.6%

6.4%

2.5

+38.0%+0.1

Assumed exchange rate for FYE2020: (US$→¥): $1=¥110, (EUR→¥): €1=¥125
In FYE2020, the Company plans to record non-recurring profit of ¥7.0 billion on the sale of its assets as part of efforts to improve asset efficiency.

102-2. Full-Year Forecasts for FYE2020 by Segment【Revenue】
FYE2019
Results

FYE2020
Forecast% Change

Gas Business in Japan

363.9

375.0+3.0%

Gas Business in U.S.

187.3

201.0+7.3%

Gas Business in Europe

55.1

173.0+214.0%

Gas Business in Asia and Oceania

106.1

111.0+4.6%

Thermos Business

27.8

30.0+7.9%

Revenue Total

740.3

890.0+20.2%

FYE2019
Results

FYE2020
Forecast% Change

Gas Business in Japan

29.830.6+2.7%

Gas Business in U.S.

15.6

19.0+21.5%

Gas Business in Europe

6.5

26.5+303.5%

Gas Business in Asia and Oceania

9.1

11.5+25.7%

Thermos Business9.1

9.4+2.3%

Eliminations or Corporate*-4.5-2.0－

Core operating income Total

65.8

95.0+44.3%

Non-recurring profit and loss

1.0

7.0－

Operating income

66.8

102.0

+52.6%(Billions of yen)

【Operating income】(Billions of yen)

* In the FYE2019 results, European business acquisition-related expenses (advisory fees, etc.) of ¥2.7 billion have been recorded in core operating income.

11

(Reference Materials)

12Non-recurring Income and Expense Items(Billions of yen)Core operating income

Non-recurring profit and loss
Operating income

FYE2018Results

FYE2019
Results

YoY change

60.0

65.8

+5.8

-0.1

1.0

+1.1

59.8

66.8

+7.0

【Non-recurring Income and Expense Items】
FYE2018 Results
Item
Gain on sales of domestic land
Restructuring-related expenses forthe alfi business (Thermos)
Expenses for the consolidation ofaffiliates’ sites

13FYE2019 Results
AmountItem(Billions of yen)
1.2 Gain on sales of domestic land-1.0 Other

Amount(Billions of yen)
1.3
-0.3

-0.2

Expenses for the integration ofAustralian subsidiaries-0.1

Other-0.0

Total-0.1 Total

1.0

Condensed Consolidated Statements of Cash FlowsFYE2018

FYE2019

Results

Results

Income before income taxes

55.8

62.0

+6.2

Depreciation and amortization

43.2

56.1

+12.9

Changes in working capital

-6.9

-2.4

+4.5

Others

-9.0

-17.0

-+8.0

83.1

98.6

+15.5

Capital expenditures

-58.2

-74.1

-15.9

Investments and loans-1.1-691.1-690.0

Others (asset sales, etc.)

7.3

10.3

+3.0

(2) Cash flows from investing activities-52.0-754.9-702.9

Free cash flow (1+2)

31.1-656.2-687.3

Net interest-bearing liabilities

274.9

941.1

+666.2Adjusted net D/E ratio

-1.54

-

(Billions of yen)

(1) Cash flows from operating activities

YoY Change

Net interest-bearing liabilities: interest-bearing liabilities - cash and cash equivalents**Under IFRS, time deposits with maturities longer than three months are not included in cash and cash equivalents.
However, these time deposits are reflected in the calculation of net interest-bearing liabilities disclosed by the Company.
Adjusted net D/E ratio: (Net interest-bearing debt – equity-type debt) / (equity attributable to owners of parent + equity-type debt)
Equity-type debt: the amount of debt procured by hybrid finance that has been recognized as equity credit by rating agencies(50% of the procured amount).
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

FYE2018

FYE2019

Results

Results

Cash and cash equivalents

47.8

59.6

+11.8

Trade receivables

164.2

197.9

Inventories

51.4

Others

FY2018FY2019Results

Results

Interest-bearing liabilities

326.9

1,005.4+678.5+33.7

Trade payables

79.4

105.9

+26.5

66.2

+14.8

Others

112.5

223.7

+111.2

14.7

23.2

+8.5

Total liabilities

518.9

1,335.1+816.2

278.3

347.1

+68.8

Share capital and capital

395.5

429.5

+34.0

Property, plant and equipment391.9

639.3+247.4

Other components of equity

-9.1

-22.9

-13.8

Goodwill

119.2

437.7

+318.5Intangible assets

44.9

253.8

+208.9

386.4

406.6

+20.2

Others

96.6

92.9

-3.7

25.6

29.2

+3.6

652.7

1,423.8+771.1

412.0

435.8

+23.8

931.0

1,771.0+840.0(Billions of yen)

Total current assets

Total non-current assets

Total assets

15931.0

1,771.0

YoY Change+840.0surplus, etc.

Equity attributableto owners of parent
Non-controlling interests

Total equity
Total liabilitiesand equity

YoY ChangeKey Performance Indicators (Consolidated)
FYE2018
Results

FYE2019
Results

FYE2020
Forecast

Basic earnings per share (Yen)

113.0495.42

131.71

Overseas sales ratio

43.3%

47.9%

55.0%

ROE

13.3%

10.4%

13.4%

ROCE

8.4%

6.2%

6.6%

Annual dividends per share (Yen)

2325

26

Dividend payout ratio

20.3%

26.2%

19.7%

Capital expenditures

62,56976,657102,300

1,130

691,126－

43,266

56,111

83,000326,959

1,005,402

983,700

274,968

941,117918,100(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)

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

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%.

16

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

68%

Oxygen17%

37%

Nitrogen

26%

43%

Argon
0%

10%

20%

3%
30%

40%

20%

18%
50%

4%

18%
60%

2%

12%

ChemicalsElectronic equipment &semiconductors
Shipbuilding, machinery,transportation equipment
Others

13%

18%

70%

80%

90%

100%

【Net Sales Mix by Industry】
Steel and other metals

SeparateGases(O2, N2, Ar)

29%

13%

Total Sales

0%

10%

22%

11%
20%

21%
30%

10%

9%
40%

* The scope of data collection excludes the Gas Business in Europe segment.

1717%

50%

22%

ChemicalsElectronic equipment &semiconductors
Shipbuilding, machinery,transportation equipment
Others

46%
60%

70%

80%

90%

100%

TNSC’s Gas Supply Structure
Separate gases

Supplied via pipeline(on-site)
OxygenNitrogen

CE

Argon

Evaporator

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

18

Packaged gases
Dewar
vessel(liquid)

Customers

Carbondioxide gas

HydrogenHeliumLPG

Specialty
gases

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-looking
statements reflect management’s assumptions and beliefs based on
information available as of the time of writing. Actual results reflect a variety
of 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.

19