TOKYO OHKA KOGYO CO., LTD.
Business Results― The 1st Half of Fiscal Year ending Dec. 2017―Nov. 8, 2017TOKYO OHKA KOGYO CO., LTD.

© 2017 TOKYO OHKA KOGYO CO., LTD.

Contents

1. Consolidated Business Results forthe 1st Half of FY2017 (2017.4-2017.9)

p.2

2. Consolidated Performance Forecasts for
FY2017 (2017.4-2017.12)

p.13

3. Topics
p.22- Initiatives under TOK Medium-Term Plan 2018 -© 2017 TOKYO OHKA KOGYO CO., LTD.

Consolidated Business Results
for the 1st Half of FY2017© 2017 TOKYO OHKA KOGYO CO., LTD.

Summary03(Millions of yen ）FY2017/31HFY2017/121H

Change%Net sales

42,89749,051+6,154+14.3

Operating income

5,383

5,603+219+4.1

Ordinary income

4,803

5,910+1,106+23.0

Profit attributable toowners of parent

3,301

3,921+618+18.7■Average exchange rate (US$)： ¥103.8／$（FY2017/3 1H）⇒¥110.1／$（FY2017/12 1H)■Net sales：Increased 14.3% due to a bigger-than-expected increase in high-purity
chemicals, semiconductor photoresists, and high-density integration materials in responseto active demands in Asia.
■Operating income：Increased as sales increase exceeded the increase in R&D costs.
■Profit attributable to owners of parent：Substantially increased with an increase inoperating income in addition to improvement in foreign exchange gain or loss.
© 2017 TOKYO OHKA KOGYO CO., LTD.

Non-operating Expenses or Income/Extraordinary Losses or Income

04（Millions of yen）

Non-operating Expenses or income
Interest and dividend income(Foreign exchange related losses/gains)
Foreign exchange (loss) gain
Loss(gain) on valuation of derivatives

Operating preparation expenses

FY2017/3
1H

FY2017/12
1H(579)307+886+130+172+41(891)(1,427)
+535

(44)
+142
(186)

+847+1,569(722)

(63)

(63)

(162)

(324)

－

Extraordinary losses or Income

162

YoY

Gain on sale of investment securities+265－(265)

Impairment loss－(149)(149)

Losses due to disasters

(91)

－+91

© 2017 TOKYO OHKA KOGYO CO., LTD.

05

Results by Business Segment（Millions of yen）

FY2017/3
1HNet sales

FY2017/12

1H

Change%42,89749,051+6,154+14.3

41,57647,825+6,248+15.0

Electronic
functional materials

25,822

28,039+2,216+8.6

High purity
chemicals

15,667

19,716+4,049+25.88669(16)(19.4)

1,321

1,226(94)

(7.2)

5,383

5,603+219+4.1

Material business

7,356

7,866+509+6.9

Equipment business

(178)

(379)

(201)

－

(1,795)(1,883)(88)－

Material business

Other
Equipment business
Operating income

Eliminations andcorporate© 2017 TOKYO OHKA KOGYO CO., LTD.

Breakdown of the Charge in Operating Income(Material Business)06

1st Half of FY2017/3 result v.s. 1st Half of FY2017/12 result
Impact of exchange rate changes
andDiscounted selling prices+¥0.2billions¥7.4

Improvement inproduct mix＋¥1.6billions

Expenses increase(¥1.3billions)billions

billions

1st Half ofFY2017/3
Result¥7.9+¥0.5billions

1st Half ofFY2017/12
Result© 2017 TOKYO OHKA KOGYO CO., LTD.

Sales Breakdown of Material Business
Net Sales（Millions of yen）

25,00020,00015,00019,65460

21,92125

22,019(16)

22,963(60)

07

23,93623,888

59

10

9,711

10,005

13,872

8,300

8,590

9,216

12,227

13,595

13,44513,806

14,1662017/32017/32017/32017/32017/12 2017/12

Q1

Q2

Q3

Q4

7,367

10,0005,000
0Electronic functional materials

Q1High purity chemicals

Q2Other© 2017 TOKYO OHKA KOGYO CO., LTD.

08

Electronic Functional Materials Division
Sales Composition of Electric
Function Materials by Type
Other
High-density 10%
integration*16%

LCD

11%

Semiconductor
Photoresist

g+i16%FY2017/3
1st Half
resultJapan
23%

Asia FY2017/3

KrF

55%

23%

ArF
Semiconductor
Photoresist

24%
Other
High-density
integration*

Sales Composition of Semiconductor
Photoresist by Region9%

1st Half
resultNorth America
16%

6%EuropeJapan23%

g+i16%16%

KrF
FY2017/12
1st Half 24%
LCD
result
11%
ArF

24%

* High-density integration：
Resist for Packaging, MEMS MaterialsAsia FY2017/1258%

1st Half
resultNorthAmerica
14%5%Europe© 2017 TOKYO OHKA KOGYO CO., LTD.

Equipment Business09

Net sales/Order backlog（millions of yen）

Net sales

2,000
1,500
1,000

Order backlog

1,321998

1,226884

1,090

529

5000

2017/3 1H(Millions of yen）
Year-end order backlog

2017/3 2H

2017/12 1H

2017/3 1H

2017/3 2H

2017/12 1H

1,016

966

1,003

© 2017 TOKYO OHKA KOGYO CO., LTD.

Capital Investments/Depreciation/R&D
CapitalInbestments

Depreciation( Millions of yen )( Millions of yen )10,000

2nd Half
1st Half

2nd Half

10,0008,000

1st Half

10R&D( Millions of yen )10,000

8,000

8,000

6,000

6,000

2nd Half
1st Half

4,508
6,000

4,386
3,611

4,000

4,000

3,776
4,870

2,000

3,038

2,143
0

2,946

2,000
2,685

3,276

2,842

4,000

3,360

17/3

17/12

3,403

3,821

4,256

0

0

16/3

2,000

16/3

17/3

17/12

16/3

17/3

17/12

© 2017 TOKYO OHKA KOGYO CO., LTD.

Balance Sheets

11
As ofSeptember
30, 2017

Current Assets（Million of yen）

vs March 31,
201791,716+3,068Cash and deposits

51,342+1,679Notes and accountsreceivable

21,015+1,121

Inventories

14,607+994

49,507(158)

564(76)

Investments and other assets

36,922+1,385

Current Liabilities

18,680(856)10,097+490

2,721+696

Total net asset

157,308+4,377

Total asset

178,710+4,218Property, plant and equipment
Intangible assets

Notes and accounts payable
Long-Term Liabilities

Buildings and structures
Machinery
Furniture and fixtures
Land
Construction in progress+2,139(866)+161+6(1,658)

Retained earnings+2,518Treasury stock+117
Unrealized gain on available-for-sale securities+1,332
Foreign currencytranslation adjustments(67)© 2017 TOKYO OHKA KOGYO CO., LTD.

Cash Flows

12（Millions of yen）
FY2017/3
1HFY2017/12
1H

Cash flows from operating activities+5,494+6,240

Income before income taxes andminority interests+4,966+5,748Depreciation+2,841+3,360

Decrease (increase) in trade notes
and accounts receivable(1,499)(1,046)

Decrease (increase) in inventories

(740)

(992)

Decrease (increase) in trade notes
and accounts payable+457+448+5(289)(1,219)(1,193)

Cash flows from investing activities(5,180)(3,057)

Cash flows from financing activities(1,261)(1,388)Translation adjustments(1,907)(21)

Net increase (decrease) in cash andcash equivalents(2,855)+1,733

Increase (decrease) in advances
received
Income taxes paid

Major breakdown
Purchases of property,plant and equipment(3,616)

Major breakdown
Purchases of treasury stock +146
Dividends paid
(1,396)(incl. minority shareholders)© 2017 TOKYO OHKA KOGYO CO., LTD.

Consolidated Performance
Forecasts for FY2017(2017.4-2017.12)© 2017 TOKYO OHKA KOGYO CO., LTD.

Change in Fiscal Year-End

14

 Detail of change in fiscal year-end

Current：end of march ⇒ after：End of December

 Explanation about earnings of 1st half
2017/33Q
10-12
Fiscal year ended in March（TOK and domestic subsidiaries）
Fiscal year ended in December（Overseas subsidiaries）

4Q
1-3

1Q

2017/122018/12

1Q
4-6

2Q
7-9

3Q
10-12

4Q
1-3

1Q
4-6

2Q
7-9

3Q
10-12

1Q
1-3

2Q
4-6

3Q
7-9

4Q
10-12

1Q

2Q

3Q

4Q

1Q

2Q

3Q

1Q

2Q

3Q

4Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

 Explanation about earnings forecastszz

Discussion centers on forecasts for the fiscal year ending December 2017 (announced on May 9,2017 ).
Results for the fiscal year ended March 2017 are adjusted to show April-December for domestic
business and January-December for overseas business, and presented for comparison as “Adjustedresults for the fiscal year ended December 2016”.
2016/12 Simulation
3Q
10-12

4Q
1-3

Domestics
Overseas

1Q

2017/12 Forecast

2018/12

1Q
4-6

2Q
7-9

3Q
10-12

4Q
1-3

1Q
4-6

2Q
7-9

3Q
10-12

1Q1-32Q
4-6

3Q
7-9

4Q
10-12

1Q

2Q

3Q

4Q

1Q

2Q

3Q

1Q

2Q

3Q

4Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

© 2017 TOKYO OHKA KOGYO CO., LTD.

Earnings Forecasts (Full-year)

15（Millions of yen）

FY2016(2016.4-2016.12)
Simulation result

FY2017(2017.42017.12)
The initial
forecast

80,76188,80091,900+13.8

Operating income

9,310

8,400

8,700(6.6)

Ordinary income

9,119

8,600

9,200+0.9

Profit attributable toowners of parent

5,485

4,900

5,800+5.7

Net sales

FY2017/12 (2017.4-2017.12)
Forecast%Attention: These are comparisons with the adjusted results for the fiscal year ended December, 2016 due to a change in fiscal yearend. Please refer to slide 14 for details.

■Exchange rate assumptions（US$）： ¥105.4／$（2016/12）⇒¥110.0／$（2017/12）■Net sales : Growth rate will increase to 13.8% due to the stronger-than-expected performance of the 1st
half and Material Business.
■Operating in come : Expect profits to decline, despite higher sales, owing to increased depreciation andcosts associated with change in fiscal year-end.
■Profit attributable to owners of parent : Forecasted to decrease at the beginning of the year but revised toan increase based on the 1st half results.

© 2017 TOKYO OHKA KOGYO CO., LTD.

16

Performance Forecasts by Business Segment①
Full‐year forecasts were revised upward with Material Businesscovering stagnant Equipment Business（Millions of yen)
FY2016(2016.4-12)
Simulation
resultNet sales

FY2017 (2017.4-12)
Forecast *2%

80,76188,80091,900+13.8

78,842

86,10089,900+14.0

Electronic functional
materials

47,31849,60050,900+7.6

High purity chemicals

31,02635,90038,400

+23.8

1,918

2,7002,000

+4.2

9,310

8,400

8,700

(6.6)

12,44812,00012,400

(0.4)

(333)

(333)

(700)

－

(2,804)(3,000)(3,000)－Material business

Equipment business *1
Operating income
Material business
Equipment businessEliminations and corporate*1:*2:

FY2017(2017.4-12)*3

Net sales of the Equipment Business are the figures after elimination of inter-segment sales.
These are comparisons with the adjusted results for the fiscal year ended December, 2016 due to a change in fiscal yearend. Please refer to slide 14 for details.
The initial forecast refers to the forecast for the fiscal year ending December, 2017 announced on May 9, 2017.

Capital Investments/Depreciation/R&D

17(Millions of yen)
FY2016/12(2016.4-12)
Simulation result

FY2017/12
The initial
forecast

FY2017/12 (2017.4-12)
Forecast
ChangeCapital Investments

8,469

7,800

7,700(769)

Depreciation

5,236

6,100

6,100+863

R&D

6,240

6,900

7,100+859

Attention : These are comparisons with the adjusted results for the fiscal year ended December, 2016 due toa change in fiscal year-end. Please refer to slide 14 for details.
The initial forecast refers to the forecast for the fiscal year ending December, 2017 announced onMay 9, 2017.

© 2017 TOKYO OHKA KOGYO CO., LTD.

Breakdown of the Charge in Operating Income(Material Business)

18

FY2016/12(2016.4-12) Simulation Result v.s.
FY2017/12 (2017.4-12) Forecast
Expenses increase(¥2.7)billions

Costs associated withchange in fiscal year-end(¥0.8)billions

Impact ofsales increases, etc＋¥3.6billions

Impact of Exchange
rate changes anddiscounted selling prices(¥0.1billions)¥12.4¥12.4billions

FY2016/12 (2016.4-12)
Simulation resultbillions±¥0billions

FY2017/12(2017.4-12)
Forecast

Attention : These are comparisons with the adjusted results for the fiscal year ended December, 2016 due to a change in fiscal yearend. Please refer to slide 14 for details.
© 2017 TOKYO OHKA KOGYO CO., LTD.

Electronic Functional Materials Division
Sales Composition of Semiconductor
Photoresist by Region

Sales Composition of Electric
Function Materials by Type
Other
High-density
integration*

8%

g+i

Semiconductor
Photoresist
Asia

57%
Semiconductor
Photoresist

FY2016(2016.4 12)(2016.4-12)

NorthAmerica

Simulation
result18%
6%

EuropeOther

High-density
integration** High-density integration：
Resist for Packaging,MEMS Materials

Japan

19%

16%
FY201618%(2016.4 12) KrF(2016.4-12)
Simulation 22%
LCD
11% result
ArF
25%

18%
LCD
10%

198%

g+i15%

Japan

19%

FY2017(2017.4-12) KrF

Asia

24%

59%

Forecast
ArF
26%

FY2017(2017.4-12)
Forecast

North
America

16%
6%EuropeAttention : These are comparisons with the adjusted results for the fiscal year ended December, 2016 due to a change in fiscal yearend. Please refer to slide 14 for details.
© 2017 TOKYO OHKA KOGYO CO., LTD.

Performance Forecasts by Business Segment ②（Our estimates assuming no change in the fiscal year-end）20（Millions of yen）
FY2017(2016.4-2017.3)
ResultFY2018(2017.4-2018.3)

88,764

98,500100,800+13.6

86,55894,70097,900+13.1

Electronic functional
materials

53,074

56,10056,900+7.2

High purity chemicals

33,47538,50040,900

+22.2

2,205

3,800

2,900

+31.5

9,954

11,10010,900+9.5

14,47015,30015,400

+6.4

(750)

(500)

(700)

－

(3,764)(3,700)(3,800)－Net sales*1
Material business

Equipment business*1
Operating income
Material business
Equipment businessEliminations and corporate

FY2018 (2017.4-2018.3)
Forecast*2%＊1: Net sales of the Equipment Business are the figures after elimination of inter-segment sales.
＊2: Forecasts for the fiscal year ending March 2018 (previous basis) are our estimates if the change infiscal year-end does not occur, using a full 12 months for both domestic companies (April-March) andoverseas companies (January-December). One-time costs associated with the change in fiscal yearend
are not included in these forecasts.
© 2017 TOKYO OHKA KOGYO CO., LTD.

Sales Breakdown of Material Business（Forecast） 21Net sales（Millions of yen）

50,00040,00043,835105

43,444108

41,57686

18,30917,621

15,66725,42025,71425,822

2016/1H

2016/2H

2017/1H（2016.4-9）

30,00044,98247,82550,074

Influence offiscal year changed↓

30530

21,183(76)

69

17,807

19,71642,074
18,68320,00010,0000

2016/1H

2016/2H

2017/1H(2016.4-9)

Electronic Functional materials

27,251

28,0392017/2H

2017/1H

22,8602017/2H）

2017/2H（2016.10-2017.3） 2017/1H（2017.4-9 Forecast） 2017/2H（2017.10-12 Forecast(2016.10-2017.3)(2017.4-9)(2017.10-12)

High purity chemicals

28,8602018/2HForecast)

2018/2H (2017.10-2018.3(2017.10-2018.3)

OtherAttention:• The second half forecast is obtained by subtracting first-half results from the full-year forecast.
• The 2nd half forecast is obtained by subtracting the1st half results (6 months each for domestic and overseas companies) from the fullyear forecast (9 months for domestic companies, 12 months for overseas companies).
• The 2nd half forecast for the year ending March 2018 is obtained by subtracting the 1st half forecast (the same for the 1st half forecast
for the fiscal year ending December 2017) from the full year forecast for the year ending March 2018 (12 months each for domestic andoverseas companies).
© 2017 TOKYO OHKA KOGYO CO., LTD.

Initiatives inTOK Medium-Term Plan 2018

© 2017 TOKYO OHKA KOGYO CO., LTD.

Products trend①

23ArF Photoresist
Will turn to a growth trend after prolonged stagnation.
 Demand increase in manufacturers newly adopting ArF
resists/Implementation of the strategy of building close
relationships with customers.
 Switch to new processes in major manufacturers' logic
semiconductors/Accompanying demand increase.

KrF Photoresist
Asian markets as well as Japanese market contribute to sales growth.
 An expansion of mass production of 3D-NAND (64-layerlevel)/Response to accompanying demand increase.
 Acquisition of POR of thick-film photoresists for 96-layer.

© 2017 TOKYO OHKA KOGYO CO., LTD.

Products trend②

24

High-density integration materials
Maintains potential for business growth despite a decline in sales
growth rate.
¾ Resist for Packaging
 Response to demand for FOWLP of major manufacturers.
 Increase in new adoption in OSAT manufacturers.
¾ MEMS Materials
 Address new needs of electronic components manufactures, etc.

High purity chemicals
New products under the strategy of building close relationships withcustomers contribute to sales growth.
 Adoption of new products for new processes.

© 2017 TOKYO OHKA KOGYO CO., LTD.

Returns to Share-holder

25

Implementation of flexible capital policies and further enhancement ofshareholder returns
Effictively means a dividend
increase due to the 9 monthaccounting period.
64
64 （Forecast）
64

Cash dividends
applicable to the year（yen）
60
52
Dividend payout ratio
44(Consolidated)

2013/3

30.9% 30.5%
2014/3<November 7, 2017>

Number of stocks to be purchased:
2.5 million shares(maximum limit)

57.0%
43.8%

36.2%

Purchase of treasury stock

36.1%

Total purchase cost：
10 billion yen(maximum limit)
Equivalent to 5.73% of the total shares issued(exscluding treasury stock as of Oct. 31, 2017)2015/3 2016/3＊ 2017/3 2017/12＊:Including 4 yen of commemorative
dividend for 75th anniversary in FY2016

Purchase period:From Nov. 8, 2017
Though Apr. 27, 2018

Policy of returns to shareholders (points)(1)Considering the current level of dividends, continuously distributing dividends with a consolidated dividend payout ratio of above 40%(2) With a long-term perspective, comprehensively take into account financial position and business performance(3) From a long-term viewpoint, flexibly purchase treasury stock as return to shareholders

TOK will continue to pursue an optimal balance between
investment, cash reserves, and shareholder returns.
© 2017 TOKYO OHKA KOGYO CO., LTD.

http://www.tok.co.jp/（Note）
This presentation material contains forward-looking statementsthat describe future prospects of TOKYO OHKA KOGYO CO., LTD.
(the Company) in terms of business planning, earnings andmanagement strategies. Such statements are based onmanagementʼs judgement, derived from information available to it
at the time such information was prepared. Readers are cautioned
not to rely solely on these forward-looking statements, as actual
results and strategies may differ substantially according tochanges in the Companyʼs business environment.