FY2021 Business Results and
New Medium-Term Management Plan
(April 1, 2021 – March 31, 2022)

Toyo Gosei Co., Ltd.
May 25, 2022

１．Business Results for the FY 2021
２．Projection for the FY2022
３．Summary of the Medium-Term Management
Plan “TGC300” and New Medium-Term
Management Plan
2

Financial Results for the FY2021• Semiconductor materials continue to be at a high level in all areas, such as demand for 5G-compatible smartphones and PCs, andincreased investment in DX, communications, and data centers. In particular, demand for advanced materials increased rapidly.
• Disruptions in global logistics, soaring prices of raw materials and fuels, and tight supply and demand for chemical products havemade supply chain risks more prominent.
• By securing raw materials to meet strong demand for electronic materials, responding to soaring prices, and increasing production,
we achieved significant increases in sales and profits, with net sales of +22% and ordinary income of +60% compared to theprevious fiscal year.
• As a result, the medium-term management plan "TGC300 (sales of 30 billion yen, ordinary income of 3 billion yen or more, ordinary
income margin of 10% or more)" was exceeded one year ahead of schedule.

(Million yen)

Net sales

FY2020Results

FY2020
Projections

FY2021Results

YOY
Change%Comparison withprojections
Change%※27,164

32,00033,144※+5,980※+22.0%+1,144103.6%

Operating profit

2,939

4,000

4,624

+1,684+57.3%+624

115.6%

Ordinary profit

2,982

4,000

4,794

+1,811+60.7%+794

119.9%

Profit

2,345

2,800

3,457

+1,111+47.4%+657

123.5%

EPS¥295.57¥352.78¥435.61

Dividends per Share¥20.00¥30.00¥30.00FX Rate (USD)¥105.8/$¥114/$ ¥112.06/$※"Accounting Standard for Revenue Recognition" (ASBJ
Statement No.29, March 31, 2020) has been applied from the
beginning of ended term of March, 2022 period. As a result,accounting is different from a total period in the previous fiscal
year. The comparison for YOY is reference figure as new standard
vs old standard.

3

The Summary of FY2021 Financial Results■Net sales
33,144 million yen (YOY※+5,980 million yen, ※+22%)✓ Photosensitive materials Segment: 20,574 million yen (YOY※+4,597 million yen, ※+28％)
Both semiconductor and display application continue keep good sales.
In particular, demand for advanced materials increased rapidly.
✓ Chemical Segment: 12,569 million yen (YOY※+1,382 million yen, ※+12%)
Sales of high-purity solvents for electronic materials increased, and aroma products also performed steadily.
Reflected in the selling price due to soaring prices of chemicals.
In the Logistics business, the need to secure inventories increased against the backdrop of a recovery in demand for chemical
products and tightening, resulting in an increase in cargo movements.

■Operating profit
4,624 million yen (YOY +1,684 million yen, +57%)✓ Photosensitive materials: 3,297 million yen (YOY +1,473 million yen, +80％),
Chemical: 1,326 million yen (YOY +210 million yen, +18%)✓ By absorbing the increase in raw materials, fuel, logistics costs, and cost increase in production capacity by reflecting the priceand increasing the production and sales of high value-added products, then it resulted in increased profits.

■Operating profit
4,794 million yen (YOY +1,811 million yen, +60%)✓ Foreign exchange gains due to yen depreciation (YOY +¥166 million).

■Profit
3,457 million yen (YOY +1,111 million yen, +47%)※The comparison for YOY is reference figure as new standard vs old standard.

4

Quarterly Sales & Operating profit Trend• Sales continue to exceed the previous year's level throughout the year. In particular, electronic materials are driving,
and advanced materials are increasing rapidly.
• Sales in the fourth quarter (January-March) remained at a high level of ¥9,271 million(YOY +¥1,930 million, +26.3%) due to increased sales and price reflections associated with soaring prices of raw
materials.
• Operating profit was ¥1,300 million (YOY +¥501 million, +62.7%).

※"Accounting Standard for
Revenue Recognition" (ASBJ
Statement No.29, March 31,2020) has been applied fromthe beginning of ended term ofMarch, 2022 period. As aresult, accounting is different
from a total period in theprevious fiscal year. The
comparison for YOY isreference figure as new
standard vs old standard.

5

Change analysis: Operating profit• By absorbing the increase in raw materials, fuel, logistics costs, and cost increase in production
capacity by reflecting the price and increasing the production and sales of high value-added products,
then it resulted in increased profits.
Increase in unit
price of stock(Million yen)
Increase in sales
volume, Selling
price is underincreasing due tohigh rawmaterial prices.

+4,867+203+30

Operation
Inventory
improvement
revaluation+282△2,410FX△1,287
Impact from raw
materials, fuel,consumables andtransportation
cost increasing

2,939
Sales growth

FY2020Operating profit

Advanced expenditure increased
for production capacity up(Labor cost, Depreciation)

4,624
Expenses
increase+1,684FY2021
Operating profit

6

Photosensitive Materials Segment
Net sales: 20,574 million yen+28%(YOY※ +4,597 million yen, ※+28％)• Logic semiconductor applications keep strong
demand.
• In particular, demand for advanced materials
increased rapidly.
• Memory semiconductor remains decent demand.
• Legacy generation semiconductor and display
applications keep strong demand.

Operating profit: 3,297 million yen(YOY +1,473 million yen , +80％)• Increased production in all areas absorbed theincrease in costs、then increased profits.
※New accounting standards about the profit recognition has been applied,sales figure decreased by 458 million yen from calculation in old accounting
standard. The comparison for YOY is reference figure as new standard vs oldstandard.

7

Chemicals Segment
Net sales: 12,569 million yen+12%(YOY※+1,382 million yen, ※+12%)• Electronic materials business continued to keep
good sales.
• Aroma chemicals business kept steady growth.
• In the logistic business, load movement volume
increased due to strong demand for chemicals andneeds for securing inventories.
• Selling price is under increasing due to high raw
material prices.

Operating profit: 1,326 million yen(YOY +210 million yen, +18%)• Overcoming the disruption of logistics andincreasing profits thanks to expanding demand.
※New accounting standards about the profit recognition has been applied,sales figure decreased by 658 million yen from calculation in old accounting
standard. The comparison for YOY is reference figure as new standard vs oldstandard.

8

FY2021 Income Statement• Net sales were 33,144 million yen (YOY※+5,980百万円, ※+22.0%).
• Gross profit margin improved by 2.5pt (22.9% → 25.3%) thanks to increased factory operation and sales in advanced products.
• Selling, general and administrative expenses increased by only +15%, then operating profit was 4,624 million yen (YOY+1,684
million yen, + 57.3%).

(Million yen)

FY2020

FY2021

Change%※27,164

33,144※+5,980※+22.0%20,95424,754+3,799+18.1%

6,209

8,390

+2,180+35.1%

3,270

3,766

+495

+15.2%

2,939

4,624

+1,684+57.3%

Non-operating income

188

323

+135

+71.5%

Non-operating expenses

145

153

+8

+5.6%

Ordinary profit

2,982

4,794

+1,811+60.7%

Extraordinary income & losses

△36

△57

ー

ー

Profit before income taxes

2,945

4,736

+1,791+60.8%

599

1,279

+679

+113.4%

2,345

3,457

+1,111+47.4%Net sales
Cost of sales
Gross profit
SG&A expenses
Operating profit

Income taxes
ProfitGross profit: +2,180 million yen
Gross profit margin improved
by 2.5pt.
Non-oerating income:+135 million yen
Foreign exchange gain of +215
million yen※"Accounting Standard for Revenue
Recognition" (ASBJ Statement No.29, March 31,2020) has been applied from the beginning ofended term of March, 2022 period. As a result,accounting is different from a total period in theprevious fiscal year. The comparison for YOY isreference figure as new standard vs oldstandard.

9

FY2021 Statement of Cash flows• Operating CF: 5,808 million yen Operating CF increased thanks to increased profit. Working capital also increased temporarily due to asurge in sales and a rise in inventory unit prices.
• Investment CF: △3,415 million yen Continued investment to increase production. This fiscal year decreased due to the completion ofa new photosensitive materials plant in the previous fiscal year.
• Financial CF: △ 2,563 million yen Borrowing was reduced by improving FCF.

(Million yen)

FY2020

FY2021

ChangeCash flows from operating activities

4,419

5,808

+1,389Profit before income taxes

2,945

4,736

+1,791

Depreciation

2,311

2,579

+268

Decrease (increase) in trade receivables（+: decrease）
Decrease (increase) in inventories（+: decrease）△732△2,015△1,28336△1,096△1,132470

1,526+1,056

△611

77

+689

△5,688△3,415+2,272△1,2682,392+3,661

1,472△2,563△4,036

7

56

+49

211

△113

△325

3,382

3,269

△113

Increase (decrease) in trade payables（+: increase）
Other
Cash flows from investing activities
FCF
Cash flows from financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents

Rapid increase in sales
and impact of higher
raw material prices

10

FY2021 Balance sheet• Sales receivables and trade payables increased due to increased sales.
• Inventories increased by 1,096 million yen due to strategic securing stable raw materials.
• Interest-bearing debt decreased by ¥2,168 million due to increased profits.
• Shareholders' equity increased by ¥3,256 million thanks to an increase in net income.
• The equity ratio was 34.3% (YOY +4.9pt).
Mar. 2021
ended

Mar. 2022
ended

Change16,99819,766+2,768Cash and deposits

3,794

3,681

△113

Notes and accounts
receivable – trade

5,386

7,402

+2,015Interest-bearing debt

Inventories

6,983

8,080

+1,096

833

602

△230

26,52027,119+599

24,90825,376+468

Shareholders’ equity

523

511

△11

1,088

1,231

+143

43,51846,886+3,367(Million yen)

Current assets

Other
Fixed assets
Property, plant andequipment
Intangible assets

Investments and otherassetsTotal assets

Mar. 2021
ended

Mar. 2022
ended

Change30,72730,824

+96

3,470

5,010

+1,54019,987

17,819△2,168

Other

7,269

7,993

+724

Net assets

12,79016,061+3,27012,75016,007+3,256

Valuation and translation
adjustments

40

54

+14

Liabilities and net assets

43,51846,886+3,367(Million yen)

Liabilities
Notes and accounts payable– trade11

１．Business Results for the FY 2021
２．Projection for the FY2022
３．Summary of the Medium-Term Management
Plan “TGC300” and New Medium-Term
Management Plan
12

FY 2022 Ending Projection• While soaring raw materials and fuels, rising prices, interest rate hikes, and depreciation of the yen are accelerating,demand for electronic materials is expected to continue to be strong.
• Both sales and profits are expected to increase in the fiscal year ending March 2023.
• However, it is expected that raw materials and fuels and freight charges will increase by 1,500 million yen, fixed
costs for production capacity enhancement will increase by 950 million yen, and R & D as well as engineering
process development costs will increase by 600 million yen.

(Million yen)

FY2021Results

FY2022
Projection

Change%33,14440,000+6,855+20.7%

Operating profit

4,624

5,150

+525

+11.4%

Ordinary profit

4,794

5,000

+205

+4.3%

Profit

3,457

3,500

+42

+1.2%

EPS

¥435.61¥440.98

FX Rate¥112.06/$¥125/$Net sales※Foreign Exchange Sensitivity
FY2022 Operating profit: 42 million yen depreciation
advantage.

13

Change analysis: Operating profit• It is expected that raw materials and fuels and freight charges will increase by 1,500 million yen, fixed costs for
production capacity enhancement will increase by 950 million yen, and R & D as well as engineering processdevelopment costs will increase by 600 million yen.

△1,500(Million yen)△950
+4,624
Sales growth

FY2021

Impact fromraw materials,
fuel, andtransportation
cost increasing△600
Increase in
expenses for
production
capacity up+5,150R&D andequipment
development

FY202214

Capital Investment, Depreciation & R&D Plan
• Capital investment in FY2022 is about 5.7 billion yen as plan.
• In order to respond to the growing demand for electronic materials, the company plans to strengthen its infrastructure.
• R&D continues to strengthen process technology enhancement (Analytical capabilities, Productivity improvement, pilot production
capability) to improve productivity and quality.

CAPEX

R&D

Average investment amount

Depreciation(Fiscal year)

Beyond 500 Period

15Capacity Up Investment• In the photosensitive material segment, the facilities for advanced materials have been expanded.
• In the chemical products segment, a new distillation tower was constructed.
• Continue to enhance our facilities and strengthen our stable supply system.
Current
Photosensitive
Materials
Segment
Advanced
Materials
New Plant(New Productionbuilding)

FY2019Operation
Start

FY2020Qualification
Construction

FY2021

FY2022

Capacity expansion foradvanced materials

Operation
Start

Infrastructureenhancements

Capacity up at
existing facilities
Chemicals
Segment

Capacity expansion foradvanced materials

Ichikawa Plant
Production Capacity Expansion

Awaji Plant

Expansion of
distillation column

Infrastructureenhancements

16

shareholder returns• In FY2022, we plan to increase the annual dividend to 40 yen in line with the plan to increase profits.
• Although it is based on stable dividends, it decides on a shareholder return policy by comprehensively considering
growth potential, financial balance, etc.

17

１．Business Results for the FY 2021
２．Projection for the FY2022
３．Summary of the Medium-Term Management
Plan “TGC300” and New Medium-Term
Management Plan
18

Management Policy
Management philosophy

Toyo Gosei Co., Ltd. will conduct business with human resources, creativity and scienceand technologies at the core to support the growth of human civilization, and grow toincrease its contribution.

Guiding principles

1. Make what is needed in the times
2. Making something that other companies cannot make (Global niche top)
3. Research & Development and technology at the core in the business4. Don't give up, do it simply honestly and sincerely

Management Policy

1. Priority is given to safe operation 2. compliance with laws and regulations, honest and fair 3.
Provide the world's best materials to the international community 4. Always develop new products,
new processes and new services 5. Promote sophistication of production technologies, develop newprocesses, and win market competition with stable quality 6. Become a leading global company inJapan 7. We will constantly work to develop our abilities throughout the company and demonstratecreativity through personal improvement to contribute to society.

Business definition
・Develop and provide chemicals / services in the fields of IT,
medical care, and daily necessities.
・Development of advanced and creative services.
・Strengthen the competitiveness of customers final products

Key to success・Management for growing people talent・Business development, customer problem-solving ability
・Proposals centered on research and development
Improve R & D efficiency with marketing and new technologies
・Differentiate with patents, supply chain and production
technology
・Fiscal soundness achievement for securing investment capacity
for production capacity increase and R & D enhancement

19

Business Domains & Core Technologies
New
Business
Seeds

Electronics

Chemicals
The Challenge ofValue Creation

Functional Chemicals

Photosensitive Materials
Segment

Chemicals Segment

chemical tank terminals

Creating customer
excitement

Photosensitive
Materials

Acid generator

Solvents

Aroma chemicals

functional polymer

Lithography
related materials

Pharmaceuticalraw materials

food additives

Crystallization

Quality
ControlDiazotization
Washing

catalytic reaction
metallic reaction

Esterification

Oxidation
Polymerization

High valueadded
equipment

Salt exchange
Separation
Purification

Location
Impurities
Control

Metal
ControlDistillation

20

Summary of the Medium-Term Management Plan “TGC300”
FY2018 - FY2022 Medium-Term Management Plan “TGC300”
VisionNumerical Target

As resolving customer's issues and techincal challeges one by one, TGC become
the absoluted world No. 1 company with both ultra-high quality and productivity
Net sales: ¥30 billion or more, Ordinary profit: ¥3 billion or more,
Ordinary profit ratio: 10% or more
Progress of measures

TGC300

Photosensitive
Materials Expansion of
production capacity

Increased its capacity for advanced photosensitive
materials and built a fourth photosensitive
materials plant to expand its production capacity.

ChemicalsStrengthening
Business・Strengthen the quality and safety supply systemof ultra-high purity solvent by adding a new
distillation tower.
・Further high added value has been achieved byintroducing automation of tank terminals
specializing in chemicals.

corporate strategy

・The strengthening of human resource
development and technology strategies is only
halfway through due to the impact of the
COVID-19.
・Strengthen the governance system in line withthe reorganization of the Tokyo Stock Exchange.

➡ Exceeded TGC 300 one year ahead of schedule. The D/E ratio also improved to 1.1.

21

Market Environment from 2020 to 2030
• Semiconductors support the evolution of social infrastructure, and the market is expected to double from 2020 to 2030. Continued
growth thereafter.
• With the progress of miniaturization and the spread of new technologies such as next-generation EUV / 3D / metal resist, we willfurther evolve the solvent / photosensitive material manufacturing technology that we have cultivated for 70 years and support the
future evolution of the industry.
Global Semiconductor Market

現在Technology Roadmap
7nm
5nm

Shipment amount(trillion yen)

EUV

3nm
2nm
1.5nm

EUV DP

3D-Packaging
High-NA
Metal resists

Beyond500

Source: The Ministry of Economy, Trade and Industry (METI)"Strategy for Semiconductors and the Digital Industry"

1nm
0.7
nm

Beyond500
2018

2020

2022

2024

Source: IRDS2020 and Toyo Gosei

2026 2028

2030

2032

2034
22

Photoresist market forecast for semiconductors (Krf, ArF & EUV)
• Growth continues in all areas.
• In particular, demand for advanced photoresists (ArF and EUV) is expected to increase 1.9 times from 2021 to 2026.

CAGR
EUV Resists 57.4%
ArF Resists 8.5%

KrF Resists 4.0%

Source : Fuji Keizai Co., Ltd. and Toyo Gosei

23

FPD Market Trend• High resolution display share expansion by large display TV, smart phone with OLED type, 4K&8K TV and etc.
contribute demand increase for ultra high purity solvent and photosensitive materials.

Demand outlook for FPDs
CAGRAMOLED 18.5%

LCD (High Resolution)
4.8%

LCD 1.7%

Source : Fuji Chimera Research Institute, Inc. and Toyo Gosei

24

New Medium-Term Management Plan Beyond500◼ Concept
In the field of electronic materials, where demand is expected to grow further in the future, we will further refine
the high-purity synthesis that we have cultivated over many years and our refining technology as well as
strengthen a stable supply system that meets customer quality, then achieve growth in people, organizations, andbusinesses. As the result we contribute to the realization of a sustainable decarbonized society as the world's No.
1 DANTOTSU (outstanding) company.
In the future, optimal operation of all devices will be essential for the realization of a sustainable decarbonized society, and it is expected that electronic
devices and semiconductors will play a role in future social infrastructure with plans to increase the capacity of real-time networks and utilize AI.
Especially in the semiconductor field, market growth is expected to more than double in the next 10 years, strategic investment competition is alreadyaccelerating in countries around the world, and supply of many functional materials is expected to expand toward the realization of higher performanceelectronic devices.
To achieve this, we will further refine the high-purity synthesis and refining technologies that we have cultivated over many years, strengthen the stablesupply system that meets the rapidly increasing demand and customer quality, then aim for the three pillars of growth for people, organizations, andbusinesses.

◼ Vision
We will create the future by taking each customer issue and technical issue seriously, solving them from an
original perspective, then achieving both ultra-high quality as the world's No. 1 DANTOTSU (outstanding)and
productivity improvement.
25

Numerical Plan

Net sales

売上高

Operating profit¥50
billion

営業利益

FY2021 Results• Net sales: ¥30 billion• Operating profit: ¥4.6 billion (14%)¥33.1
billion¥20.5
billion¥1.3
billionOperatingprofit margin

4.6
billion¥8
billion

FY20172018年3月期

FY20212022年3月期

FY20262027年3月期

6.3%

14.0%

16％以上

FY2026 Projection• Net sales: Over ¥50 billion• Operating profit: Over ¥8 billion (Over 16%)
• CAPEX: ¥30 billion (Cumulative)※FX Rate: ¥115/$

26

Segment Strategy• Strategic business expansion of the photosensitive materials segment✓ Sufficient investment to increase production capacity to meet growing demand.
✓ Achieving both ultra-high purity synthesis and productivity improvement that support advanced semiconductors.
✓ Strengthen our R & D capabilities to achieve customer quality and contribute to technological innovation inelectronic materials.

• Strengthening the business of the chemical products segment✓ Strengthening the quality, development and stable supply system of ultra-high purity solvents for advanced
semiconductors.
✓ Promote automation at chemical tank terminals and further improve customer satisfaction.

• Strengthening business collaboration✓ In response to the destabilizing supply chain, we strengthen the linkage
among the tank terminal business, ultra-high-purity refining capacity andhigh-purity synthetic capacity to realize a stable supply of functional
chemicals and high added value in the supply chain.

photosensitive
materials

chemicalproducts

chemicaltankterminals

27

Capital Investment, Depreciation & R&D Plan
• During the medium-term management plan period, the cumulative amount of capital investment is planned to be 30 billion yen.
• Increased production and capital investment to meet growing demand for semiconductors and electronic materials.
• R&D continues to strengthen process technology enhancement (Analytical capabilities, Productivity improvement, pilot production
capability) to improve productivity and quality.

CAPEX

R&D

Average investment amount

Depreciation(Fiscal year)

Beyond 500 Period

28

Capacity Up Investment• In order to meet the growing demand, we will continue to make capital investment and secure a stable supply
system.

Photosensitive
Materials
Segment

New Plant(New Productionbuilding)

FY2022

Infrastructureenhancements

Continue capacity expansion
Chiba Plant
Expand production capacity forphotosensitive materials and polymers

automation

Capacity expansion
for advanced materials

Ichikawa Plant
Awaji Plant

R&D

DX

Capacity expansion
for advanced materials

Capacity up at
existing facilities
Chemicals
Segment

New Medium-Term Plan Period(planning)

Infrastructureenhancements

Continue capacity expansion
Ichikawa & Awaji Plant: Strengthening ofproduction increase response and stablesupply system

Takahama Tank Terminal
automation29

corporate strategy• Human Resource Development✓ Investment and realization in a fulfilling work environment and human resources development environment for
long-term continuous business expansion.
✓ Development of organizational functions that enable timely and autonomous decision-making.
✓ Fostering next-generation leaders who will lead the business globally.

• Strengthening technology strategy✓ Strengthening and collaborating with R & D and manufacturing technology with the aim of achieving bothcustomer quality and productivity.
✓ Real-time visualization of the world's highest-purity manufacturing technology and process control by DX, andimprovement of productivity by utilizing it.
✓ Exploration of next-generation technologies / development of elemental technologies / enhancement of new
business promotion system.

• Strengthening the management base
✓ Improvement of safety technology in the supply chain of high-performance materials.
✓ Strengthening the financial structure to realize agile capital investment.
✓ Realization of environment-friendly energy management and reduction of CO2 intensity.
✓ Realization of management that respects regional contribution and diversity.
30

Individual Development, to the global Chemical(NB)
The forecasts made in this document contain a variety of uncertain factors since it has been
prepared based on judgments from information that is currently available.
Therefore actual business results may differ from those projected, depending on factors andrisk such as the economic status of the market surrounding the company, and do not perform
any strict promise and guarantee.

31