February 5, 2020
Taiyo Nippon Sanso Corporation

Consolidated Financial Performancefor the First Three Quarters of Fiscal Year Ending March 31, 2020
(Based on IFRS)(Amounts less than ¥1 million are omitted)

1. Financial results for the first three quarters of FYE2020 (April 1, 2019 to December 31, 2019)(1) Operating results(Percentages indicate year-on-year change)

Core operating
incomeRevenue

Operatingincome

Net income

Net income
attributable toowners of theparent

Total
comprehensiveincome(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥ million)(%)

First threequarters ofFYE2020

633,435

22.3

68,251

55.6

71,89660.9

42,54746.6

41,35851.9

28,511

47.5

First threequarters ofFYE2019

518,0309.9

43,871(4.0)

44,693(3.4)

29,018(29.6)

27,234(31.9)

19,330(63.4)(Reference) Income before income taxes
First three quarters of FYE2020: ¥60,915 million [44.3% ]First three quarters of FYE2019: ¥42,200 million [(3.3)% ]Core operating income is calculated as operating income excluding certain gains and expensesattributable to non-recurring factors (non-recurring items).
Basic earnings
per shareFirst three quarters ofFYE2020
First three quarters ofFYE2019

Diluted earnings
per share

(yen)

(yen)

95.57

―

62.93

―

(2) Financial position
Total assets

Total equity

Equity attributableto owners of theparent

Equity attributableto owners of theparent ratio(¥ million)(¥ million)(¥ million)(%)

First three quarters of FYE2020(December 31, 2019)

1,785,701

457,977

426,738

23.9

FYE2019 (March 31, 2019)

1,771,015

435,854406,602

23.0

1

2.

Dividends
Annual Dividend
End of 1stquarterEnd of 2ndquarter

(Yen)

(Yen)

(Yen)

(Yen)

(Yen)

―

12.00

―

13.00

25.00

―

14.00
―

14.00

28.00

FYE2019
FYE2020
FYE2020 (est.)

End of 3rdquarter

TermendTotal

Note: Revisions of the latest forecasts of dividends: No

3.

Forecasts for business operations for FYE2020 full term (April 1, 2019 to March 31, 2020)(Percentages indicate year-on-year change)

Core operating
incomeRevenue(¥ million)(%)(¥ million)(%)

Operating income(¥ million)(%)

Net income
attributable to ownersof the parent

Net income(¥ million)

Basicearnings
per share(%)(¥ million)

(%)

(Yen)

855,000
15.5
91,50039.0
95,00042.1
56,000
28.1
Full term
Note: Revisions of the latest forecasts of consolidated operating performance: Yes(Reference) Income before income taxes
FYE2020 full term: ¥80,500 million [29.7%]

54,00030.8

124.78

4.

Explanation concerning the appropriate use of forecasts for business operations and other notable matters
This report contains business forecasts and other forward-looking statements that are based on information
currently available to the Company and certain assumptions judged to be reasonable by management. The Company
gives no assurances that business forecasts will be attained. Moreover, actual results may differ materially frombusiness forecasts due to various factors. For details on the assumptions of the forecasts and related matters, pleasesee page 3, “6. Explanation concerning predictive information such as forecasts for business operations.”

5.

General information relating to the three quarters results
The business environment surrounding the Taiyo Nippon Sanso Group (TNSC Group) in the first three quarters ofthe fiscal year under review (from April 1, 2019 to December 31, 2019) saw a softening of production activities inkey industries in Japan, while Europe also experienced a slump in production activities in key industries. On theother hand, production activities in manufacturing industries in the U.S. were solid, and shipments of air separation
gases (oxygen, nitrogen, and argon) were on par with the previous fiscal year. In the electronics-related field,shipments of electronic materials gases were on par with the previous fiscal year in Japan, but decreased overseas.
Against this backdrop, the TNSC Group achieved the following results for the first three quarters of the fiscal year
under review. Revenue on a consolidated basis increased 22.3% year on year to ¥633,435 million, core operating
income rose 55.6% to ¥68,251 million, operating income increased 60.9% to ¥71,896 million, and net income
attributable to owners of the parent rose 51.9% to ¥41,358 million.
Core operating income is calculated as operating income excluding certain gains and expenses attributable tonon-recurring factors (non-recurring items).
A breakdown of business performance by reportable segment is as follows.
Segment income represents core operating income.
Gas Business in Japan
In the industrial gas-related business, revenue from air separation gases, a core product, decreased year on year for
use primarily in the key industries of steel, non-ferrous metals, metal processing, and chemicals. In the electronicsrelated field, revenue from electronic materials gases was mostly on par with the previous fiscal year. In equipment
and installation, there was a contribution to earnings from the medical equipment sales company, IMI Co., Ltd.,acquired in October 2018.
As a result, in the Gas Business in Japan, revenue decreased 2.2% year on year to ¥260.257 million, while
segment income decreased 6.4% to ¥19,972 million.

2Gas Business in the United States
In the industrial gas-related business, revenue increased primarily from bulk gas following steady production in themanufacturing sector. In the on-site business, the start of operation of new projects for a chemicals manufacturer
and other customers contributed to revenue. In addition, revenue rose partly due to a contribution from the HyCO
business*, which was acquired in February 2019. In equipment and installation, revenue from the electronicsrelated field decreased.
As a result, in the Gas Business in the United States, revenue increased 7.2% year on year to ¥148,840 million,
and segment income rose 59.4% to ¥16,779 million.
* HyCO stands for hydrogen (H2) and carbon monoxide (CO), which are separated from natural and other gases through a technology called
Steam Methane Reforming (SMR). The HyCO business provides large-scale supply of H2 and CO to oil refining and petrochemical industries
through a pipeline.

Gas Business in Europe
Revenue from the European business amounted to ¥125,307 million and segment income from this business was¥19,212 million. The European business acquired from Praxair, Inc. of the United States in December 2018 has
been disclosed in this segment since the first three quarters of the previous fiscal year.
Gas Business in Asia & Oceania
In the industrial gas-related business, revenue from bulk gas declined sharply, primarily in China, and was soft
across the Asian region overall. Liquid petroleum gas (LPG) saw firm shipments in Australia. In the electronicsrelated business, revenue increased due to a large increase in revenue from equipment and installation. However,shipments of electronic materials gases declined year on year.
As a result of the above, in the Gas Business in Asia & Oceania, revenue increased 0.3% year on year to ¥79,161
million, while segment income decreased 4.8% to ¥8,148 million.
Thermos BusinessIn the Thermos Business, sales of vacuum insulated portable mugs in Japan were solid, while sales of sports-use
vacuum bottles and heat-retaining lunch boxes declined year on year, affected by unseasonable weather with a coolsummer and a warm winter. Also, the shipment volume of overseas distributors decreased.
As a result, in the Thermos Business, revenue decreased 8.1% year on year to ¥19,869 million and segment
income declined 15.9% to ¥6,060 million.

6.

Explanation concerning predictive information such as forecasts for business operations
The company has revised its full-year consolidated earnings forecast. Please see the press release titled “NoticeRegarding Earnings Forecast Revisions” issued on February 5, 2020.

7.

Notes to the condensed consolidated financial statements(Note regarding going concern assumption)
Not applicable.
(Change in accounting policy)
The main accounting standards and interpretations applied by the TNSC Group from the first quarter of the fiscal
year under review are as follows:Standards and interpretations

IFRS 16Leases

Outline of new standards or revisions
IFRS 16 sets forth revisions to accounting procedures and disclosure methods
for the treatment of leases.
Under a single lessee accounting model and for all leases with a term of morethan 12 months undertaken as lessee, IFRS 16 primarily requires lessees, inprinciple, to reflect in the financial statements their assets representing theirright to use leased assets and liabilities representing their obligations to makelease payments.

As a result of the application of IFRS 16, the carrying amount of the TNSC Group’s lease-related assets increasedby ¥34.1 billion and lease liabilities simultaneously increased by ¥34.6 billion on the date of initial application ofthis standard.
Upon applying IFRS 16, the TNSC Group has adopted the method where the cumulative effect of applying
this standard is recognized at the date of initial application, which is allowed as a transitional measure. Therewas no cumulative effect at the date of initial application of this standard.

38.

Segment information
The TNSC Group’s reportable segments are components of the TNSC Group about which separate financial
information is available and which are evaluated regularly by the Board of Directors in deciding how to allocate
management resources and in assessing performance. Business segments are not aggregated for financial reporting
purposes.
The TNSC Group conducts gas businesses in Japan and overseas, mainly for customers in the steel, chemical, andelectronics industries, and has built production and sales structures for its main products in Japan, the United States,
Europe, and Asia & Oceania. In addition, the TNSC Group conducts the manufacture and sales business ofhousewares such as stainless steel vacuum bottles. Therefore, the Company has established the following fivereportable segments: Gas Business in Japan, Gas Business in the United States, Gas Business in Europe, Gas
Business in Asia & Oceania, and Thermos Business.
The principal products and services included in the five reportable segments are shown in the table below.
Reportable segment
Gas Business in Japan
Gas Business in theUnited States
Gas Business in Europe
Gas Business in Asia &Oceania

Main products and services
Oxygen, nitrogen, argon, carbon dioxide, helium, hydrogen, acetylene, gas-related
equipment, specialty gases (electronic materials gases, pure gases, etc.), electronicsrelated equipment and installation, semiconductor manufacturing equipment, cutting
and welding equipment, welding materials, plants and machinery, liquid petroleumgas (LPG) and related equipment, medical-use gases (oxygen, nitrous oxide, etc.),
medical equipment, stable isotopes

Thermos BusinessHousewares

The accounting methods adopted for the reported operating segments are the same as the methods adopted toprepare the consolidated financial statements. Revenue from inter-segment transactions and transfers is based
primarily on prevailing market prices.
(1) Figures of revenue and income (loss) by reportable segment
First three quarters of FYE2019 (April 1, 2018 to December 31, 2018)(¥ million)
Reportable segment
Gas
Businessin Japan

Gas Business
Gas
Gas Businessin the United Business in in Asia &StatesEuropeOceania

ThermosBusiness

Total

Adjustments(Note 1)

Amounts on theconsolidated
statements ofincome

Revenue
Revenue toexternal customers

265,989

138,856

12,68778,887

21,609518,030―

518,030

Revenue frominter-segment
transactions andtransfers

6,498

10,090

―

3,004

31

19,625(19,625)―

Total

272,488

148,946

12,687

81,892

21,641

537,655(19,625)

518,030

Segment income(Note 2)

21,331

10,526

560

8,559

7,205

48,183(4,312)

43,871

Notes:
1. The ¥4,312 million negative adjustment for segment income is comprised of intersegment eliminations of¥345 million, companywide expenses of ¥1,203 million that were not allocated to any particular reportablesegment, as well as the expenses of ¥2,762 million to acquire the European business. These companywide
expenses related principally to basic research expenses that were not allocated to a particular reportablesegment.
2. Segment income represents core operating income, which is calculated as operating income excluding certain
gains or losses attributable to non-recurring factors (non-recurring items).

4First three quarters of FYE2020 (April 1, 2019 to December 31, 2019)(¥ million)
Reportable segment
Gas
Gas Business
Gas
GasBusinessBusiness in the United Business inin Asia &in Japan
StatesEurope
Oceania

Thermos
Business

Total

Adjustments(Note 1)

Amounts on theconsolidated
statements ofincome

Revenue
Revenue toexternal customers

260,257

148,840

125,307

79,161

19,869633,435―

633,435

Revenue frominter-segment
transactions andtransfers

7,447

11,970

82

2,319

20

21,840(21,840)―

Total

267,704

160,811

125,390

81,48019,889655,276(21,840)

633,435

Segment income(Note 2)

19,972

16,77919,212

8,148

6,060

70,173(1,922)

68,251

Notes:
1. The ¥1,922 million negative adjustment for segment income is comprised of intersegment eliminations of¥465 million and companywide expenses of ¥1,457 million that were not allocated to any particular reportablesegment. These companywide expenses related principally to basic research expenses that were not allocatedto a particular reportable segment.
2. Segment income represents core operating income, which is calculated as operating income excluding certain
gains or losses attributable to non-recurring factors (non-recurring items).

(2) Reconciliation of segment income with income before income taxes(¥ million)

Segment income

First three quarters of FYE2019(April 1, 2018 toDecember 31, 2018)
43,871First three quarters of FYE2020(April 1, 2019 toDecember 31, 2019)
68,251948

6,490

Gain on sales of noncurrent assets
Impairment loss
Other
Operating income
Financial revenue
Financial expenses
Income before income taxes

5―(1,927)

(125)

(917)

44,69371,896

1,823

1,021

(4,317)(12,002)42,20060,915