October 31, 2019
Taiyo Nippon Sanso Corporation

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

1. Financial results for the first half of FYE2020 (April 1, 2019 to September 30, 2019)(1) Operating results(Percentages indicate year-on-year change)

Core operating
incomeRevenue

Operatingincome

Net income

Net income
attributable toowners of theparent

Total
comprehensive
income(¥ million)%(¥ million)%(¥ million)%(¥ million)%(¥ million)%(¥ million)%First halfofFYE2020

422,88128.4

45,47961.6

46,74961.4

28,72453.4

27,74056.9(8,922)―First halfofFYE2019

329,426

7.8

28,145(4.0)

28,967(2.2)

18,7222.0

17,6770.0

36,14742.0(Reference) Income before income taxes
First half of FYE2020: ¥40,831 million [50.8% ]First half of FYE2019: ¥27,073 million [(2.2)% ]Core operating income is calculated as operating income excluding certain gains and expenses
attributable to non-recurring factors (non-recurring items.)
Basic earnings
per share (yen)First half ofFYE2020
First half ofFYE2019

Diluted net income
per share (yen)

64.10

―

40.85

―

(2) Financial position
Total assets(¥ million)

Total equity(¥ million)

Equity attributableto owners of theparent (¥ million)

Equity attributableto owners of theparent ratio (%)

First half of FYE2020(September 30, 2019)

1,732,168

425,947

395,847

22.9

FYE2019 (March 31, 2019)

1,771,015

435,854406,602

23.0

1

2.

Dividends
Annual Dividend
End of 1stquarterEnd of 2ndquarterEnd of 3rdquarter

(Yen)

(Yen)

(Yen)

(Yen)

(Yen)

―

12.00

―

13.00

25.00

―

14.00
―

14.00

28.00

FYE2019
FYE2020
FYE2020 (est.)

Term
endTotal

Note: Revisions of the latest forecasts of dividends: Yes
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(¥ million)

Net income
attributable to ownersof the parent%

Full term
890,000
20.2
95,00044.3
102,000
52.659,500
36.1
Note: No revisions have been made to recently announced forecasts for business operations.
(Reference) Income before income taxes
FYE2020 full term: ¥86,500 million [39.3%]
4.

Basicearnings
per share(¥ million)

%

(Yen)

57,00038.0

131.71

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.”(How to obtain details of quarterly business performance briefings)
TNSC plans to hold the following briefing for investors.
Friday, November 15, 2019: Business performance briefing for institutional investors and analysts

5.

General information relating to the first half results
The business environment surrounding the Taiyo Nippon Sanso Group (TNSC Group) in the first half of the fiscal
year under review (from April 1, 2019 to September 30, 2019) saw slightly soft production activities in key
industries in Japan and Europe, while production activities in manufacturing industries in the U.S. were solid, andshipments of air separation gases (oxygen, nitrogen, and argon) were generally firm. In the electronics-related field,deliveries of electronic materials gases were mostly 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 half of the fiscal year underreview. Revenue on a consolidated basis increased 28.4% year on year to ¥422,881 million, core operating income
rose 61.6% to ¥45,479 million, operating income increased 61.4% to ¥46,749 million, and net income attributableto owners of the parent rose 56.9% to ¥27,740 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.

2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, and metal processing. In the electronics-related
field, revenue from electronic materials gases were mostly on par with the previous fiscal year. In equipment andinstallation, 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 increased 1.2% year on year to ¥174,015 million, while
segment income decreased 3.0% to ¥12,319 million.
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 electronics-related
field decreased substantially.
As a result, in the Gas Business in the United States, revenue increased 8.2% year on year to ¥98,953 million,and segment income rose 70.3% to ¥11,744 million.
Gas Business in Europe
Revenue from the European business amounted to ¥85,283 million and segment income from this business was¥13,218 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 decreased slightly. Liquid petroleum gas (LPG) saw
firm shipments in Australia. In the electronics-related 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 decreased 1.5% year on year to¥51,582 million, while segment income decreased 15.4% to ¥5,376 million.
Thermos BusinessIn the Thermos Business, sales of vacuum insulated portable mugs in Japan were solid, while sales of sports-use
vacuum bottles declined year on year. Also, the shipment volume of overseas distributors decreased.
As a result, in the Thermos Business, revenue decreased 3.8% year on year to ¥13,046 million and segment
income declined 8.1% to ¥4,137 million.
6.

*

Explanation concerning predictive information such as forecasts for business operations
The Company has not revised its previous forecasts for business operations for the full term of the fiscal year ending
March 31, 2020, which were announced on May 13, 2019.
The Company has revised its previous forecasts for the interim dividend and year-end dividend. For details,
please see the press release titled “Notice Regarding Revisions to Dividends of Surplus (Interim Dividend) andDividend Forecasts” issued today (October 31, 2019).

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 apipeline.

3

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. There
was no cumulative effect at the date of initial application of this standard.
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.

4

(1) Figures of revenue and income (loss) by reportable segment
First half of FYE2019 (April 1, 2018 to September 30, 2018)(¥ million)
Reportable segment
GasBusinessin Japan

Gas Business
Gas
Gas Businessin the United Business in in Asia &States
EuropeOceania

Thermos
Business

Total

Amounts on theAdjustments Consolidated(Note 1)
Statements ofIncome

Revenue
Revenue to externalcustomers

171,989

91,488―52,383

13,564329,426―

329,426

Revenue from intersegment transactions
and transfers

3,494

6,506

―

2,094

11

12,107(12,107)―

Total

175,484

97,995―54,478

13,576

341,534

329,426

Segment income(Note 2)

12,700

6,897

―

6,358

4,503

30,460(12,107)(2,314)28,145

Notes:
1. The ¥2,314 million negative adjustment for segment income is comprised of intersegment eliminations of ¥98
million, companywide expenses of ¥884 million that were not allocated to any particular reportable segment,
as well as the expenses of ¥1,331 million to acquire the European business. These companywide expenses
related principally to basic research expenses that were not allocated to 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).
First half of FYE2020 (April 1, 2019 to September 30, 2019)(¥ million)
Reportable segment
Gas
Gas Business
Gas Business
Gas BusinessBusiness in the Unitedin Asia &in Europe
in JapanStates
Oceania

Thermos
Business

Total

Adjustments(Note 1)

Amounts on theConsolidated
Statements ofIncome

Revenue
Revenue to externalcustomers

174,015

98,95385,28351,582

13,046422,881―422,881

Revenue from intersegment transactions
and transfers

4,984

8,021

―

1,362

11

14,379(14,379)―

178,999

106,975

85,283

52,944

13,057437,261(14,379)

422,881

12,31911,744

13,218

5,376

4,137

46,796(1,316)45,479Total
Segment income(Note 2)

Notes:
1. The ¥1,316 million negative adjustment for segment income is comprised of ¥336 million of intersegment
eliminations and companywide expenses of ¥980 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).

5(2) Reconciliation of segment income with income before income taxes(¥ million)
First half of FYE2019(April 1, 2018 toSeptember 30, 2018)
Segment income

First half of FYE2020(April 1, 2019 toSeptember 30, 2019)28,14545,479Gain on sales of noncurrent assets

948

2,059

Impairment loss－(311)

(125)

(479)

28,967

46,749

890

1,268

Other
Operating income
Financial revenue
Financial expenses
Income before income taxes(2,784)(7,185)27,07340,8316