Supplementary Materials forConsolidated Business Performancefor FYE2018

May 9, 2018TAIYO NIPPON SANSO Corporation
11Contents
１. Business Performance for FYE2018
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
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)

FYE2017

FYE2018

Margin581.5

Revenue

FYE2018
ForecastMargin646.2

YoY Change(Announced Jan.30)

Margin+64.7

635.0+11.1%

Core operating income

54.7

60.0

Non-recurring profit and loss

-1.0

Operating income

53.6

Finance costs

-3.4

-3.9

-0.5

-4.0

Income before income taxes

50.1

55.8

+5.7

56.0

Income tax expenses

13.9

5.1

-8.8

6.0

Net income

36.2

50.7

+14.5

50.0

Net income attributable to owners of theparent

34.7

48.9

+14.2

48.0

Net income attributable to non-controlling interests

1.4

9.4%

+5.3
9.3%

-0.1

+9.7%

+0.9

59.8
9.2%

60.0
0.0+6.2
9.3%

9.4%

60.0

+11.5%

9.4%(Attribution of net income)

6.0%

7.6%

1.8

+40.8%

+0.4

7.6%

2.0

Impact of foreign currency translations (US$→¥): FYE2017 rate: $1=¥108.72 FYE2018 rate: $1=¥110.70→Impact of currency gains led to increases of ¥6.8 billion in revenue and ¥0.6 billion in core operating income
The reversal of deferred tax liabilities at a subsidiary based in the U.S., accompanying a reduction of the federal corporate income
tax rate in U.S. tax reform legislation, resulted in a significant decrease in income taxes shown in the consolidated statements ofprofit or loss. (Income taxes decreased ¥12.2 billion in FYE2018)3

1-1. Overview of business performance【Revenue】
FYE2018
Forecast

FYE2017
Results

FYE2018
Results% Change

Gas Business in Japan

321.4

342.4

+6.5%

341.0

Gas Business in the U.S.

147.2

172.6

+17.2%

169.0

Gas Business in Asia and Oceania

85.8

103.1

+20.1%

98.0

Thermos and Other businesses

27.0

27.9

+3.5%

27.0

Revenue Total

581.5

646.2

+11.1%

635.0

FYE2017
Results

FYE2018
Results% ChangeFYE2018
Forecast(Billions of yen)

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

(Announced Feb.5)

4

Gas Business in Japan

29.4

30.7

+4.4%

30.0

Gas Business in the U.S.

12.0

13.5

+12.3%

13.5

Gas Business in Asia and Oceania

5.1

9.2

+78.8%

9.5

Thermos and Other businesses

10.0

8.3

-16.5%

9.0

Eliminations or Corporate-1.9-1.8－-2.0

Core operating income Total

54.7

60.0

+9.7%

60.0

Non-recurring profit and loss

-1.0-0.1－0.0

Operating income Total

53.6

59.8

+11.5%

60.0

1-2. Business Performance by Segment: Gas Business in JapanFYE2017(Billions of yen)

Industrial Gas

RevenueElectronics

Energy% Change

Bulk gases

76.3

80.2+5.0%

On-site gases

46.4

56.7

+22.3%

Packaged gases

11.7

11.4

-2.1%

Hard goods

23.2

23.6

+1.5%

Plants and Equipments

41.7

40.7

-2.4%

Medical

23.4

23.5

+0.5%

Total

223.0

236.4

+6.0%

Gases

46.5

48.2

+3.5%

Equipment and Installation

24.6

26.0

+6.1%

Total

71.1

74.3

+4.4%

LP gas24.2

28.8+18.7%

Related Equipment

2.9

2.9+0.0%

Total

27.2

31.7

+16.6%

Revenue Total

321.4

342.4

+6.5%

29.4

30.7

+4.4%

Segment income

Reasons for changes in revenue
・JFE SANSO CENTER Kurashiki Factory started
operation・Revisions to carbon dioxide gas prices(recognized mainly in bulk gases)
・Electronics-related: Electronic materials gases
trended favorably
・LP gas: Higher sales price following an
increase in the import price5FYE2018

Reason for change in segment income
・Higher costs in line with rising crude oil prices
・Electronics-related: Electronic materials gases
trended favorably1-2. Business Performance by Segment: Gas Business in the U.S.
(Billions of yen)

FYE2017

Industrial Gas
RevenueElectronics

FYE2018% Change

Bulk gases

54.9

68.9

+25.5%

On-site gases

6.1

8.8+43.5%

Packaged gases

47.2

50.8

+7.7%

Hard goods

28.4

32.9

+16.0%

Total

136.6

161.5

+18.2%

Gases

8.4

7.2

-14.1%

Equipment and Installation

2.1

3.8

+79.0%

Total

10.5

11.0+4.7%

Revenue Total

147.2

172.6

+17.2%

12.0

13.5+12.3%

Segment income※Impact of yen appreciation on currency translations
Revenue increased by ¥2.7 billion and segment income by ¥0.2 billion

Reasons for changes in revenue
・Recognition of business acquired from Air
Liquide contributed ¥13.8 billion
・Higher revenue mainly from bulk gases(primarily increased shipments of carbon
dioxide gas), packaged gases, and hard goods

6

Reason for change in segment income
・Business acquired from Air Liquide contributed
to increased segment income
・Increased segment income mainly due to higher
revenue from bulk gases (primarily increased
shipments of carbon dioxide gas), packaged
gases and hard goods

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

FYE2017

Industrial Gas
RevenueElectronics

FYE2018% Change

Bulk gases

27.0

38.1+40.9%

On-site gases

2.6

2.9+11.0%

Packaged gases

4.7

5.5

+16.0%

Hard goods

5.8

5.5

-4.5%

Plants and Equipment

11.5

13.6

+18.1%

Total

51.9

65.8

+26.9%

Gases

26.7

31.0

+22.1%

Equipment and Installation

7.2

6.2

-13.4%

Total

33.9

37.2

+14.0%

Revenue Total

85.8

103.1

+20.1%

5.1

9.2+78.8%

Segment income※Impact of yen appreciation on currency translations
Revenue increased by ¥3.8 billion and segment income by ¥0.3 billion

Reasons for changes in revenue◆Industrial gas-related business・Contribution from the acquisition ofSupagas Holdings Pty Ltd (Australia):¥9.1 billion
・China and Thailand: Favorable performanceby industrial gases◆Electronics-related business・China, Taiwan, South Korea : Favorable
sales of electronic materials gases
7

Reason for change in segment income◆Industrial gas-related business・Contribution from the acquisition ofSupagas Holdings Pty Ltd (Australia):¥1.6 billion
・Segment income increased in line withhigher revenue from industrial gases inChina and Thailand◆Electronics-related business・China, Taiwan, South Korea: Favorable salesof electronic materials gases

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

FYE2017

ThermosRevenue

FYE2018% ChangeJapan

20.7

21.3

+3.0%

Asia

3.9

4.0+1.2%

Total

24.6

25.3+2.7%

Other

2.3

2.5+11.5%

Revenue Total

27.0

27.9+3.5%

10.0

8.3

-16.5%

Segment income※Impact of yen appreciation on currency translations
Revenue increased by ¥0.3 billion and segment income by ¥0.1 billion

Reasons for changes in revenue◆Thermos Business・Japan: Solid sales centered on vacuum
insulated portable mugs and tumblers
・Overseas: Increased revenue from expanded
sales channels in South Korea

8

Reason for change in segment income◆Thermos Business・Japan: Segment income decreased due toincreased expenses (primarily advertisingexpenses)
・Overseas: Sluggish business performance byGroup companies accounted for by theequity method

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

FYE2018
Results
MarginRevenue

646.2

FYE2019
Forecast

YoY Change

Margin670.0% Change

+23.8
+3.7%

Core operating income

60

64.0
9.3%

+4.0
9.6%

+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%

2.0Assumed 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

646.2670.0+3.7%

FYE2018
ResultsFYE2019
Forecast% Change

Gas Business in Japan*

31.8

31.8+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

-0.10.5－

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. Data in the “FYE2018 Results” column of the above table have beenadjusted to reflect the transfer, in order to use the same basis of comparison. (Amount transferred: Revenue of ¥2.6 billion, core operating
income of ¥0.6 billion)

10

(Reference Materials)

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

Non-recurring profit and loss
Operating income

FYE2017
resultsFYE2018
results

YoY change

54.7

60.0

+5.3

-1.0-0.1+0.9

53.659.8+6.2【Non-recurring Income and Expense Items】
FYE2017 results
Item
Gain on sales of domestic land

AmountItem(Billions of yen)
0.8 Gain on sales of domestic land

Amount(Billions of yen)
1.2

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

Restructuring-related expenses forthe alfi business (Thermos)
Expenses for the consolidation of-1.9
affiliates’ sites
Expenses for the integration of-0.1
Australian subsidiaries

Other-0.0 Other-0.0

Total-1.0 Total-0.1

Gain on sales of Asian land

12FYE2018 Results

0.2-1.0-0.2-0.1

Key Performance Indicators (Consolidated)
FYE2017
Results

FYE2018
Results

FYE2019
Forecast

Basic earnings per share (Yen)

80.28

111.13

92.43

ROE

10.3%

13.3%

9.6%

ROCE

8.4%

8.4%

8.5%

Annual dividends per share (Yen)

2023

24

Dividend payout ratio

24.9%

20.3%

26.0%

Capital expenditures

43,79662,56979,000102,034

4,556－40,048

43,26647,000359,528

326,959

339,000

304,308

274,968

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)

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

62%

OxygenNitrogen39%

Argon

42%
0%

10%

20%

17%

23%

3%
30%

40%

21%

17%
50%

3%

5%

21%
60%

70%

17%

ChemicalsElectronic equipment &semiconductors
Shipbuilding, machinery,transportation equipment
Others

13%

17%
80%

90%

100%

【Net Sales Mix by Industry】
Steel and other metals

SeparateGases(O2, N2, Ar)

27%

14%

Total Sales

0%

14

10%

23%

10%
20%

23%
30%

18%

11%

10%
40%

50%

22%

ChemicalsElectronic equipment &semiconductors
Shipbuilding, machinery,transportation equipment
Others

44%
60%

70%

80%

90%

100%

TNSC’s Gas Supply StructureSeparate 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

Specialtygases

Acetylene

15

Packaged gases
Dewarvessel(liquid)

Customers

Carbondioxide gasHydrogenHelium

LPG

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.

16