May 13, 2014
Taiyo Nippon Sanso Corporation

Consolidated Business Performancefor Fiscal Year 2014
(Based on Japan GAAP)

1. Financial results for the FY2014 full term (April 1, 2013 – March 31, 2014)(1) Operating Results(Amounts less than ¥1 million are omitted)

Net sales(¥ million)

Operating income

YoY
ChangeFY2014
522,746
11.6%
FY2013
468,387(1.9)%
Note: Comprehensive income
FY2014: ¥46,512 million [251.5%]
FY2013: ¥13,234 million [(18.4)%]

Ordinary income

Net income(¥ million)

YoYChange(¥ million)

YoYChange(¥ million)

YoYChange

31,48924,88426.5%(19.9)%

30,54623,06032.5%(22.4)%

20,194(2,071)―%―%

Dilutedearnings
per share (Yen)FY201449.42―FY2013(5.25)―
Reference: Equity in earnings of affiliates
FY2014: ¥1,999 million
FY2013: ¥1,284 million
Earnings pershare (Yen)ROE
8.4%(1.0)%

OperatingMarginROA
4.5%
3.8%

6.0%
5.3%

(2) Financial Position
FY2014 (March 31, 2014)
FY2013 (March 31, 2013)
Reference: Equity
FY2014: ¥ 274,307 million
FY2013: ¥203,771 million

Total assets(¥ million)
731,677
615,820

Net assets(¥ million)
298,475
224,253

Equity ratio (%)
37.5
33.1

Net assets
per share (¥)
633.69525.38(3) Consolidated Cash FlowsFY2014FY2013

Cash flows from
Cash flows fromoperating activities investing activities(¥ million)(¥ million)
56,716(55,295)
33,964(37,225)

1

Cash flows from
Balance of cash and cash
financing activities
equivalents at term-end(¥ million)(¥ million)
27,88456,088(8,181)
22,721

2. Dividends
Annual Dividend
End ofEnd ofEnd of
1st
2nd
3rd
quarter quarter quarter
YenYen
Yen――
6.00
――
6.00
――
6.00

FY2013
FY2014FY2015 (est.)

Totalamount ofdividends

Termend

Total

Yen
6.00
6.00
6.00

Yen (¥ million)
12.00
4,710
12.00
4,926
12.00

Payout ratio(consolidated)

Ratio ofdividends tonet assets

%%―
24.3
26.0

2.3
2.1

3. Forecasts for business operations for FY2015 full term (April 1, 2014 – March 31,2015)(%: YoY)
Net sales(¥ million)

YoY

Operating income

Ordinary income(¥ million)(¥ million)

ChangeFirst-half
Full term

271,000
550,000

8.6%
5.2%

YoY
Change16,80035,000

16.7%
11.1%

YoYNet income(¥ million)

Change15,80033,200

11.3%
8.7%

Earnings pershare

YoY(Yen)Change

9,800
20,000(19.9)%(1.0)%

4. Business performance(1) Analysis of business results① Overview
During the reporting period, the global economy remained lackluster overall, with a modest
economic recovery in the United States counterbalanced by the slow rebound of European
economies after they seemingly bottomed out and slowing economic growth in China, India
and other emerging markets. In the Japanese economy, a full-scale recovery failed tomaterialize in spite of indications of an improvement in corporate performance centered onexport industries, reflecting the weak yen and higher stock prices resulting mainly frommonetary easing policies.
Turning to the businesses of the Taiyo Nippon Sanso Group (TNSC Group), in North
America, industrial gases demand was strong due to the economic recovery. In Asia, sales
increased in spite of slowing growth, mainly due to recovery in the electronics sector inTaiwan and new consolidation effects. In Japan, demand trends varied from sector to sectorand, overall, the pace of recovery remained modest.
Against this backdrop, net sales on a consolidated basis rose 11.6% year on year, to¥522,746 million, operating income climbed 26.5%, to ¥31,489 million, and ordinary income
grew 32.5%, to ¥30,546 million. Net income stood at ¥20,194 million, compared with a net
loss of ¥2,071 million for the previous fiscal year.

222.6446.20

② Breakdown of business performance by operational segment
Industrial gas
Sales in Japan of oxygen and nitrogen supplied onsite to the steel industry, a key user ofindustrial gases, increased significantly year on year. However, full-year shipping volume andsales of liquid oxygen, liquid nitrogen and liquid argon decreased slightly year on year, inspite of signs of recovery in the second half of the year. Sales of machinery and equipment fellyear on year, reflecting an ongoing decline in orders. In overseas market, currency exchange
rates increased yen equivalents, sales in North America rose year on year, reflecting a reboundin the economy, and sales in Asia grew substantially thanks to new consolidation effects.
As a result, net sales of the Industrial gas segment increased 13.6% year on year, to¥338,616 million, but operating income rose just 2.9% to ¥21,933 million due to a rise incosts accompanying a fall in industrial gas production volume and electricity rate hikes inJapan as well as deteriorating profitability for machinery and equipment.
Electronics
Despite an ongoing weakness in demand in the electronics industry, signs of a rebound insome regions such as Taiwan became apparent. Accordingly, sales of electronic materials
gases, electronics-related equipment and installations, and semiconductor manufacturing
equipment (MOCVD) rose slightly compared with the previous fiscal year.
As a result, net sales for the Electronics segment climbed 1.9% year on year, to ¥98,399
million, and operating income was ¥5,282 million, compared with an operating loss of ¥536
million for the previous fiscal year.
EnergyRegarding LP gas, sales price hikes in response to high purchases costs caused mainly by theweak yen contributed to increases in sales. Earnings declined due to a drop in consumer
demand amid higher-than-average temperatures throughout the spring and summer of 2013.
As a result, net sales in the Energy segment increased 11.2% year on year, to ¥44,511
million, while operating income sank 7.4%, to ¥1,674 million.
Other
In the Medical Business, medical device sales increased significantly, mainly due to thecontribution of sales by Pacific Medico Co., Ltd., which was purchased in October 2013.
However, the volume and sales of medical-use oxygen decreased slightly year on year.
Sales in the Thermos Business jumped substantially year on year because of strong sales
mainly of sports-use vacuum bottles and portable mugs, and the contribution of sales of newproducts.
As a result, net sales in Other segment increased 22.2% year on year, to ¥41,219 million,and operating income grew 14.9%, to ¥3,782 million.

3③ Prospects for FY2015
Regarding the outlook for the Japanese economy, the era of low growth will continue, in spiteof signs of a modest recovery due to the weak yen and rising stock prices. In the industrial
sector, there will be no let-up in rising energy costs or the shift to overseas production, and theoperating environment of the Company and the TNSC Group is also expected to remain severe.
Meanwhile, overseas, an industrial comeback in the United States due to the shale revolution
and high economic growth in emerging markets are forecast, and the market for industrial
gases is expected to expand.
Amid these circumstances, the Company and the TNSC Group has formulated a new
medium-term business plan Ortus Stage 1 covering the three-year period from FY2015 toFY2017 (April 1, 2014－March 31, 2017), and will make a concerted effort to improvedomestic earnings in an era of low growth, to focus management resources on overseas growth
opportunities, and to enhance corporate value.
(Billions of yen)
FY2015(April 1, 2014－

Net sales
550.0

Operating income
35.0

Ordinary income
33.2

Net income
20.0

522.7

31.4

30.5

20.1

March 31, 2015)
FY2014(April 1, 2013－
March 31, 2014)

YoY change (%)
5.2
11.1
8.7
(1.0)
Note: For the purposes of these forecasts, the average exchange rate of the Japanese yen against the U.S.
dollar in FY2015 is assumed to be ¥100/$1(2) Basic Company policy on profit allocation, and dividend payments for the reporting
term and the next term
The Company has adopted a policy of allocating sufficient earnings to internal reserves for theexpansion and strengthening of its corporate capabilities, as well as to allow investment invigorous business development and thereby improve business performance so as to meetshareholder expectations.
With regard to the allocation of profits, the Company’s basic policy is to pay a dividend
from retained earnings twice a year, in the form of a semiannual interim dividend and a yearend dividend. This distribution of retained earnings is determined by the annual general
meeting of the Company’s shareholders in the case of the year-end dividend, and by theCompany’s Board of Directors for the interim dividend.
In accordance with the above-stated policy, an annual dividend of ¥12 per share shall be
paid for the reporting term, consisting of a year-end dividend of ¥6 and an interim dividend
also of ¥6.
For the next business term (ending March 31, 2015), the management of the Company plansto pay an annual dividend of ¥12 per share, similarly consisting of term-end and interim
payments of ¥6 each.

4(3) OtherOn January 2, 2013, the Company converted consolidated subsidiary Vietnam Japan GasCo., Ltd. from a limited liability company to a joint stock company and made it into asubsidiary. Accordingly, the Company changed the name of Vietnam Japan Gas Co., Ltd. toVietnam Japan Gas Joint Stock Company and, with its capital now exceeding 10% of that ofthe Company, Vietnam Japan Gas Joint Stock Company has become a specified subsidiary ofthe Company.
5. Matters relating to the business terms, etc. of consolidated subsidiaries
Accounts closing dates of the Company’s consolidated subsidiaries are as follows:
December 31: 74 overseas consolidated subsidiaries
March 31: 86 consolidated subsidiaries excluding those noted above
The difference between the closing date of the Company’s consolidated accounts and theclosing dates for its subsidiaries is within three months. However, for significant transactions
that have occurred during the period from January 1, 2014 and the consolidated accountclosing date of March 31, 2014, the accounts are adjusted where necessary.
6. Segment Information(1) Overview of reporting segments
The Company regularly reviews segment performance to enable the Board of Directors tomake decisions on resource allocation and evaluate results of each segment, based on financial
data that can be extracted on an individual segment basis.
The Company recognizes four segments for reporting purposes, the Industrial gas,
Electronics, Energy, and Other segments, reflecting a basic breakdown of our businesses byproduct and service category, and end-user market, each category being a business division.
The Industrial gas segment engages in the manufacture and marketing of gases and related
equipment to steelmakers, chemical companies and other general industries in Japan andoverseas. Please note that the Plants & Engineering business has been folded into theIndustrial gas segment as their core customers are similar in nature. Electronics segment
engages in the manufacture and marketing of gases and related equipment for electronics
companies in Japan and overseas. The Energy segment markets LP gas within Japan. The
Other segment includes the Medical Business (marketing of medical-use gas), Thermos
Business (manufacture and marketing of housewares) and others.
The principal products and services included in the four segments are shown in the tablebelow.

5

Business segment
Industrial gas
Electronics
EnergyOther

Main products
Oxygen, nitrogen, argon, carbon dioxide, helium, hydrogen,acetylene, gas- related equipment, cutting and welding equipment,
welding materials, plants and machinery
Nitrogen, argon, specialty gases (electronic materials gases, puregases, etc.), electronics-related equipment and installation,
semiconductor manufacturing equipment
Liquid petroleum gas (LPG) and related businesses in Japan
Medical-use gases (oxygen, nitrous oxide, etc.), medical equipment,
stable isotopes, housewares, real-estate rental(2) Method of calculating figures of sales, earnings or losses, assets, liabilities and others of
the Company’s reporting segments
The accounting procedures for the reporting business segments are listed using figures basedon Important Matters Forming the Basis for Preparation of Consolidated Financial Statements.
Segment income figures are for operating income.
Intersegment transactions and transfers are based on the current market price.

(3) Figures of sales, earnings or losses, assets, liabilities and others by reporting segment
FY2013 (April 1, 2012 – March 31, 2013)(Millions of yen)

Reporting segments
Sales(1) Sales toexternalcustomers(2) Sales frominter-segment
transactions
and transfers
Total
Segment
earnings(losses)(Operatingincome (loss))
Other
depreciation
Notes

Adjustment(Notes) 1

Total(consolidated)

468,387―

468,387

2,552

6,437

(6,437)―42,016
1,808

36,2893,291

474,825
25,885(6,437)(1,000)468,387
24,884446

1,493

29,724(323)

29,400Industrial
gas

Electronics

Energy

Other

Total

298,073

96,54640,03133,736

1,742

157

1,985

299,816
21,322

96,703(536)

17,977

9,806

1. The ¥1,000 million negative adjustment for segment earnings comprises ¥383 million of inter-segment
eliminations and companywide expenses of ¥1,384 million that were not allocated to any particular
reporting segment. These companywide expenses relate principally to basic researches that were notparticularly allocated to reporting segments.
2. The Company has not allocated assets to any business segment.

6FY2014 (April 1, 2013 – March 31, 2014)(Millions of yen)

Reporting Segments
Sales(1) Sales toexternalcustomers(2) Sales frominter-segment
transactionsand transfers
TotalSegment
earnings(losses)(Operatingincome (loss))
Other
depreciation
Notes

Adjustment(Notes) 1

Total(consolidated)

522,746―

522,746

3,385

7,875

(7,875)―46,863
1,674

44,605
3,782

530,62132,673(7,875)(1,183)522,746
31,489446

1,868

33,722(214)

33,507

Industrial
gas

Electronics

Energy

Other

Total

338,616

98,39944,511

41,219

2,000

136

2,352

340,616
21,933

98,535
5,282

22,2079,200

1. The ¥1,183 million negative adjustment for segment earnings comprises ¥371 million of inter-segment
eliminations and companywide expenses of ¥1,554 million that were not allocated to any particular
reporting segment. These companywide expenses relate principally to basic researches that were notparticularly allocated to reporting segments.
2. The Company has not allocated assets to any business segment.

(4) Reporting by Geographical Segment①FY2013 (April 1, 2012 – March 31, 2013)
Sales(Millions of yen)JapanUnited States
OtherTotal
329,771
81,02457,592
468,387
Note: Sales are classified according to the countries or regions of location of customers.

Property, Plant and Equipment
Japan
159,074

United States
82,994Other
30,073(Millions of yen)Total
272,142②FY2014 (April 1, 2013 – March 31, 2014)
Sales(Millions of yen)JapanUnited States
OtherTotal
352,069
102,772
67,905
522,746
Note: Sales are classified according to the countries or regions of location of customers.

Property, Plant and Equipment
Japan
161,440

7

United States
111,813

Other
33,802(Millions of yen)Total
307,057