Report on Business Performance for theFirst Two Quarters of the
Fiscal Year Ending March 2012
(FY2012)2011/11/14

Results Meeting
1. Performance for the First Two Quarters of FY2012
2. Impact of the Great East Japan Earthquake
3. Overview of the New Medium-term Business Plan
(FY2012 to FY2014)
4. Topics
5. Consolidated Full-Term Forecasts for FY2012

2011/11/14

1

Performance for theFirst Two Quarters of FY2012

2011/11/14

Performance for the First Two Quarters of FY2012(Billions of yen)

Reporting 1st
two quarters

Reporting 1st

Ratio to sales(Targets)(Results)

237.3

239.0

234.7

-2.5
-1.1%

-4.2
-1.8%

Operating
Income

18.0

15.0

15.7

-2.2
-12.5%

0.7

Ordinary
Income17.8-1.8-10.3%

2.0
14.3%

-1.8
-17.7%

1.0

Previous 1st

two quarters

Sales

Net Income

7.6%

7.5%

10.2
4.3%

6.3%

14.0
5. 9%

7.4
3. 1%

two quarters

6.7%

16.0
6.8%

8.4
3.6%

YoY change% change

Changefrom targets% change

5.2%

13.7%

2011/11/14

2

Performance by Segment

2011/11/14

Performance by Segment for the First Two Quarters of FY2012(Billions of yen)First two quarters of
FY2011(Apr-Sept)
Sales

Operating
IncomeIndustrial gases

142.9

11.0

Electronics

61.7

EnergyOther

MarginSales

Operating
Income

7.7%

144.6

11.1

7.7%

5.2

8.4%

56.1

3.1

5.6%

16.6

0.4

2.8%

17.7

0.6

3.7%

15.8

2.0

13.1%

16.2

1.5

9.3%

(0.7)

Adjustments

Total

MarginFirst two quarters of
FY2012(Apr-Sept)

237.3

18.0

(0.6)
7.6%

234.7

15.7

6.7%
2011/11/14

3

Industrial Gases Businesses(Billions of yen)

Sales

Operating Income
144.6

200

142.9

＋1.6 (+1.1%)

11.0

46.5

45.7

＋0.7 (＋1.7 %)

100

10

＋0.8 (+0.9 %)0FY2011 Apr-SeptJapan

11.1 ＋0.1 (＋0.9%)

98.0

97.2

0

20

FY2011 Apr-Sept

FY2012 Apr-Sept

FY2012 Apr-Sept

Overseas* The graph contains figures for both Japan and overseas sales.

2011/11/14

Major Industrial Gases Businesses (Sales)
Separated Gases
57.6
60

13.7
30

0

43.9

56.5

－1.1 (－2.0%)－0.4 (－3.2%)

30－0.7 (－1.7%)

FY2011 Apr-Sept FY2012 Apr-Sept
Japan

60

13.2

43.2

Overseas(Billions of yen)

Other Gases

042.1＋3.1 (+8.0%)

38.9
12.5

14.9

26.4

27.1

＋2.4 (+19.2%)＋0.7 (+2.7%)

FY2011 Apr-Sept FY2012 Apr-Sept
Japan

Overseas≪Overseas≫≪Overseas≫◆Volumes were up year-on-year, but sales◆Acetylene sales benefited from consolidation offell back slightly due to the strong yen

North American units≪Japan≫≪Japan≫◆Sales volumes and values were down early in the◆Carbon dioxide sales had a good half

first half due mainly to the earthquake disaster◆Recovery set in towards the end of the first half

2011/11/14

4

Major Industrial Gases Businesses (Sales)(Billions of yen)Gas-related Equipment, etc.

Cutting and Welding Equipment and Materials

2030

11.3 +1.3 (+13.8%)

9.9
10

0

1.8

2.5

8.1

8.7

Japan

20

11.1

10.9

+0.7 (+39.3%)+0.2 (+1.8%)

10

11.4

9.2

+0.6 (+8.0%)

FY2011 Apr-Sept22.5 +2.3 (+11.9%)

20.1

0

FY2012 Apr-Sept

Overseas+2.1 (+23.8%)

FY2011 Apr-Sept
Japan

FY2012 Apr-Sept

Overseas≪Overseas, Japan≫≪Overseas≫◆Gas supply equipment sales were strong◆Non-gas products did well in North America≪Japan≫◆Laser cutting machinery held up well

2011/11/14

Major Industrial Gases Business (Sales)(Billions of yen)

Plants and Machinery
10

7.4
4.2 －3.2 (－43.3%)

1.7
5

0.5－1.1 (－67.5%)
3.6

5.7
0

－2.0 (－36.0%)

FY2011 Apr-Sept FY2012 Apr-Sept
Japan

Overseas≪Overseas≫◆Installation project sales were down
≪Japan≫◆Installation project sales were down steeply◆Major installation projects completed without hitches●Received orders for air separation plant from chemical majors

2011/11/14

5

Electronics Business
Sales

Operating Income(Billions of yen)

10

100

61.7

56.1

5.2

－5.5 (－9.0%)

15.4

50

5

15.5

3.1 －2.0 (－39.7%)＋0.0 (+0.4%)

40.6

46.2
0

－5.6 (－12.2%)

0FY2011 Apr-Sept FY2012 Apr-Sept
Japan

FY2011 Apr-Sept

FY2012 Apr-Sept

Overseas

2011/11/14

Major Electronics Busines (Sales)
Separated Gases
20

12.1－0.7 (－6.1%)

12.9
0.6

10

0.6
＋0.0 (+3.7%)

12.3
0Electronic Material Gases (Billions of yen)

20

11.4

－0.8 (－6.6%)

FY2011 Apr-Sept FY2012 Apr-Sept
Japan

40

Overseas

0

27.5

26.9

＋0.6 (+2.3%)

11.7

13.3

15.2

14.2

＋1.6 (+14.0%)－1.0 (－6.6%)

FY2011 Apr-Sept FY2012 Apr-Sept
Japan

Overseas≪Overseas≫≪Overseas≫◆Nitrogen sales were strong in Asia and North◆Strong sales in Korea, Taiwan and China

America≪Japan≫≪Japan≫◆Earthquake impact largely confined to early◆Sales volumes and values down on production

part of first half

cutbacks for semiconductors and LCD panels◆Launch of new hydrogen selenide supplies

2011/11/14

6

Major Electronic Business (Sales)
Electronics Related Equipment and Installation

5.0

20

10.6
10

2.3

7.5

FY2011 Apr-Sept FY2012 Apr-Sept
Japan

3.5

2.5

3.4

－1.0 (－42.3%)－0.7 (－9.0%)(Billions of yen)

0.1

8.9－1.7 (－16.4%)
1.3

8.3
0

MOCVD Equipment

0.0

Overseas0.6－2.8 (－82.1%)
0.1 ＋0.1 (+1.7%)
0.5 －2.8 (－85.0%)

FY2011 Apr-Sept
FY2012 Apr-Sept
Japan Overseas≪Overseas≫≪Overseas≫◆Fewer equipment orders in North America●Orders held up well in Taiwan and Korea●Promising manufacturing and sales outlook at≪Japan≫South Korean joint venture≪Japan≫◆Decline in large-scale equipment andinstallation orders◆Steep fall in completed installation projects●Trial production starts with new large-◆Some project launches delayed byearthquake disaster

diameter mass production unit

2011/11/14

Energy Business
Sales
20

Operating Income

16.6

17.7＋1.0 (+6.3%)

2

1

10

(Billions of yen)

0.6
＋0.1 (+40.2%)

0.4

0FY2011 Apr-Sept

FY2012 Apr-Sept0

FY2011 Apr-Sept

FY2012 Apr-Sept

2011/11/14

7

Major Energy Business (Sales)
Equipment and Installation, etc.

LP Gas(Billions of yen)

30

5.0

20

14.9

15.8

＋0.8 (+5.9%)

2.5

10
0

FY2011 Apr-Sept

0.0

FY2012 Apr-Sept

1.2

FY2011 Apr-Sept

1.2 －0.0 (－1.7%)
FY2012 Apr-Sept≪Japan≫≪Japan≫◆Industrial equipment holds up year-on-year◆Inquiries increase for LP gas-powered small◆Volumes down marginally due to impact ofearthquake disastergenerators and gas heat pumps due to fears ofelectricity shortages◆Higher selling prices as import prices rise

2011/11/14

Other Businesses
Sales

Operating Income

20

15.8
0.9
10

14.9

0

16.2

10

＋0.3 (+2.3%)

0.8－0.0 (－8.3%)

15.3

5

2.0

＋0.4 (+3.0%)0FY2011 Apr-Sept FY2012 Apr-Sept

Japan(Billions of yen)

FY2011 Apr-Sept

1.5 －0.5 (－27.9%)
FY2012 Apr-Sept

Overseas

2011/11/14

8Major Other Businesses (Sales)
Thermos Business

Medical Business
10

3.4

5

3.9
0

8.2＋0.9 (+12.2%)

7.3

FY2011 Apr-Sept

Medical-use gases

7.3

6.7－0.6 (－8.6%)

0.5

4.3
＋0.9(+28.6%)

5

0.6＋0.0 (+11.3%)

6.7

6.0

3.8

－0.0(－1.9%)

FY2012 Apr-Sept－0.6 (－10.3%)

0FY2011 Apr-Sept FY2012 Apr-Sept
Japan

Equipment, services, etc.

≪Japan≫◆Medical-use oxygen down slightly due partly toearthquake disaster◆Equipment sales benefit from consolidation of
one unit◆Leased equipment for Home Oxygen Therapy
use performed well

◆Established a special office to handle hospital
equipment

10(Billions of yen)Overseas≪Overseas≫◆Strong sales in Asia
≪Japan≫◆Demand flat for mainstay sports-use
stainless steel vacuum insulated bottles●New portable mugs launches planned forsecond half

2011/11/14

Impact of the Great East Japan Earthquake

2011/11/14

9

Progress in Restoration of Production Facilities❑Resumption of shipments from liquefied gas production bases:◆Pacific Gas Center: early-July (gas piping: June)◆Sendai Sanso Center: early-September (gas piping: August)❑Cylinder-filling facilities◆Sendai Nissan (Tagajo premises)
・Portable liquid gas cylinder-filling resumed in late August・Cylinder pressure inspections resumed in early October・Restoration of general-use high-pressure gas filling under review※Back-up possible at other filling plants

2011/11/14

The Costs of the Earthquake(Billions of yen)

15

10
Sales
Operating Income

12.0
5

0

3.0
Full-year forecasts(beginning of year)

4.1 1.6
Likely full-year results* Account is taken only of direct impact

2011/11/14

10

Overview of New Medium-term Business Plan
(FY2012 to FY2014)2011/11/14

New Medium-term Business Plan (FY2012 to FY2014)“Gear Up 10”~Challenges in Becoming a
Global Company III~

2011/11/14

11

Longer-term Benchmarks【Triple 10】
FY2011 Results

1. 10％ share of the world market⇒ 7.6％ (*1)

2. Operating margin of 10％ or higher ⇒ 7.3％
3. ROCE(*2) of 10% or higher⇒ 7.8％*1 Calculations by Corporate Planning Dept. are based on figures from CryoGas International magazine (2010) and investor relations
materials from various gas companies*2 ROCE (return on capital employed) = [operating income ÷ beginning and end of term average figure for (interest-bearing debt +shareholders’ equity)] × 100 (%)

2011/11/14

Key Strategies and Policies in the Medium-Term Business Plan

Policies

1. Strengthen compliance and ensure safety andquality control
2. Efficient management rigorously pursuing cost andlabor benefits
3. Strengthen regional sales base
4. Focus on cylinder business
5. Strengthen R&D
6. Continue proactive investment

Carried over fromthe previous plan

Key Strategies

1. Concentrate management resources in growthmarkets and regions
2. Strengthen upstream strategies
3. Promote M&A strategy
4. Implement cost reductions
5. Strengthen Group management

2011/11/14

12

Sales Targets －¥650 billion－(Billions of yen)700
7,0 0 0600
6,0 0 0500
5,0 0 04,0 0 0400

650.0
CAGR 10.4%/year

Strategic Ｍ&A
180.0

483.6

¥100 billion in investments

Sales ＋¥50 billion

Overseas

124.6

3
300
,0 0 0200
2,0 0 0

420.0

358.9
1
,0 0 0
100

Japan

0

FY2011FY2014

2011/11/14

Operating Income Targets －¥60 billion－(Billions of yen)

Strategic M&A

70

60.0
60

¥100 billion in investments

Operating Income ＋¥4 billion

CAGR 19.2%/year
50

184
18.4

35.4

40

Overseasand cost reductions

70
7.0

30

Operating Income ＋¥2 billion

20

367
36.7

295
29.5

10

Efficiency measures

Japan
0

(1.2)

FY2011

Inter-company
Elimination(1.1)

FY2014

2011/11/14

13

Capital investment and Investment and Loans, by Region (FY2012-FY2014)(Billions of yen)

Total
¥270 billion

4.5

0.5

14.5

5.0
6.0

7.0
2.5

26.0

21.0

Strategic
M&A¥100 billion

Conventional
investments¥170 billion
35.5

26.5

21.0

(55.0)(58.0)(57.0)
2011/11/14“Gear Up 10” Numerical Targets and Benchmarks(Billions of yen)

FY2011Results

FY2014
Plan (*1)

Sales

483.6

650.0

Operating Income

35.4

60.0

7.3%

9.2%

Ordinary Income

34.1

53.0

Net income

12.7

30.0

Depreciation

32.1

37.6

ROCE

7.8%

10.8%

Capital expenditure*2 andinvestment and loans

54.2

157.0

211.8

340.0

1.10 times

1.42 times

MarginNet interest-bearing debt

Net D/E ratio*1 Includes ¥50 billion in revenue gains and ¥4 billion in increased earnings from ¥100 billion in strategic M&A*2 Based on completed capital expenditure projects

2011/11/14

14

Sales Performance(Billions of yen)

≪ Full-year basis ≫Stage 10

700

650.0

Global 5000
600

507.7

500

495.7

458.5

400

357.7

364.9

483.6

493.0

FY2011FY2012

433.3

397.3

300
200
100
0
Before merger FY2005(FY2004)

Japan

North America

FY2006Asia

FY2007

FY2008FY2009FY2010FY2014*The figure for FY2004 is a simple sum of performance figures before
merger: The figure for FY2005 = Taiyo Nippon Sanso (year ended
March 2005) + Taiyo Toyo Sanso (year ended September 2004) ―internal transactions between the two companies

M&A

2011/11/14

Operating Income Performance
60.0≪Full-year basis≫(Billions of yen)Stage 1055

Global 5000
45

36.4

38.7
35.4

29.1

35

23.7

26.7

35.0

27.5

25

18.7
15

5

-5

Before merger(FY2004)

Japan
Asia

FY2005

North America
Eliminations

FY2006

FY2007

M&A, etc

FY2008FY2009FY2010FY2011FY2012FY2014*The figure for FY2004 is a simple sum of performance figures before
merger: The figure for FY2005 = Taiyo Nippon Sanso (year ended
March 2005) + Taiyo Toyo Sanso (year ended September 2004) ―internal transactions between the two companies

2011/11/14

15

Overseas Sales Performance(Billions of yen)Japan

Overseas

Total

Overseas (%)

Before merger

305.3

52.4

357.7

14.7%

FY2005

303.0

61.9

364.9

17.0%

FY2006

318.3

78.9

397.3

19.8%

FY2007

362.4

96.1

458.5

21.0%

FY2008

381.1

126.5

507.7

24.9%

FY2009

378.2

117.5

495.7

23.7%

FY2010

328.3

105.0

433.3

24.2%

FY2011

358.9

124.6

483.6

25.8%

FY2014 Plan

420.0

180.0

600.0

30.0%

*Excludes impact of strategic M&A

2011/11/14

Our 10-year Vision for the Period up to FY 2021

Strengthen operations in Japan

Accelerate global expansion

Sales of ¥1 trillion
Raise international profile as major industrial gas supplier from Asia
2011/11/14

16

Topics

2011/11/14

Tender Offer for Leeden Limited<Leeden at a glance>❑Consolidated results (year ended December 31, 2010) Sales: ¥12,446 million
Operating income: ¥1,093 million Net income: ¥495 million❑Sales by region: Singapore 45%; Malaysia 31%, Indonesia 12%, others 12%❑Links with TNSC: We own 9,055,000 shares in Leeden (5.0% of issued stock) through subsidiary
National Oxygen Pte Ltd.
❑Capital: ¥3,547 million❑Employees: 1,131❑Products handled:◇Cutting and welding equipment division (45%)
Welding, gas-cutting, laser-cutting and other equipment◇Gas division (30%)
Industrial, medical, specialty and other gases◇Safety division (20%)
Protective, rescue, water treatment and other equipment
Leeden brand products

2011/11/14

17

Tender Offer for Leeden Limited<Outline of tender offer>❑Purposes
・Will enable sharing of marketing networks and corporate resources onGroup basis
・Will enable expansion of operations in Southeast Asia, a growth market❑Shares subject to Tender Offer： Some 170,510,000 common shares (of a totalof 179,565,000 issued shares)❑Funding required (provisional figure): up to 85.3 million Singapore dollars(approximately ¥5.55 billion)(Millions of yen)

Leeden's recent business performance(Millions of yen)

14,0001,400

12,000

1,200

10,000

1,000

8,000

800

6,000

600

4,000

400

2,000

200

0

Gas-filling plant of Leeden’s gas division

0
2006

2007

2008

Sales
売上高

2009
OP
営業利益

2010

2011/11/14

Initiatives in Growth Markets (MOCVD)
Trials begin for new large-diameter MOCVD mass-production equipment

UR26K[Processing capacity]
6 inch×10 wafersor
8 inch× 6 wafers*Largest treatable wafer surface in theworld[Comparison with predecessor, UR25K]
Installation footprint: Same
Production efficiency: 50% increase

2011/11/14

18

Initiatives in Growth Markets (Stable Isotopes of Oxygen)<Summary>
Build more isotope manufacturing plants for “Water-18O,” a stable isotope ofoxygen used as raw material in PET diagnostic drugs
Location: Sodegaura plant, Chiba Sanso Center
Production capacity: a further 200kg a year
If combined with existing plant (Goi plant, Chiba Sanso Center):a further 300kg a year
Completion: Early 2013
<Demand trends>[Current applications]Tumor diagnostic agents for PET imaging
Raw material for F-18 fluorodeoxyglucose (FDG)
Global market in 2010: 500kg/year, with annual growth of 5-10%

Goi plant

2011/11/14

Initiatives in Growth Markets (Stable Isotopes of Oxygen)[New applications]
For

Manufacturer

Diagnostic agent

Marketing schedule(clinical trials)

Potential
demand (tests)

Brain disease(Alzheimer’s)

Eli Lilly, GE, Bayer

AV-45-18F2013 (P-III)

5 million/year

Heart disease(myocardial infarction)

Lantheus

Flurpiridaz-18F

2014 (P-III)

5 million/year

Cancers(therapeutic effect)

Roche

ML-10-18F2014 (P-II)

2 million/year*Currently, about 4 million cancer diagnosis tests are carried out each year using FDG[Market outlook]
Including new applications (brain and heart diseases),
global demand will (by our estimate)

Double in 5-10 years
Example of FDG-PET image

2011/11/14

19

Initiatives in Growth Regions (U.S.A)
Major Investment Projects
in North America

New
ASU’s

2004 * Acquired six air separation units (ASUs) offormer Messer from Air Liquide
2006 * Acquired renowned Midwest-based industrial
gas producer Linweld* Acquired helium business from the BOC Group
2007 * Began operation of new large-scale ASU in
Southern California* Established helium production company with Air
Products & Chemicals, Inc. (APCI)2008 * Acquired Southern California-based Five Star
Gas & Gear, Inc.
* Acquired Northern California-based Aeris, Inc.
2009 * Acquired Valley National Gases, LLC* Constructed new ASUs in Iowa and Texas
2010 * Acquired acetylene manufacturer andwholesaler Western International Gas &Cylinders, Inc.

2011/11/14

Initiatives in Growth Regions (U.S.A)[General Overview of New Air
Separation Plant]
・Location: Lakeland, in central
western area of Florida, United States
・Liquid production capacity:
340 tons/day
・Share of production capacity in
Florida 38% (No.1)※Fourth-best market in U.S. by Gross
State Product (GSP)
・Launch of operations: November 20122011/11/14

20

Initiatives in Growth Regions (U.S.A)[Energy Sector]
・Hydrogen gas for biomass plant,
Win on-site business・Hydrogen production capacity:
4,400Nm3/h・Location of facility: Pasadena, Texas
・Launch of operations: End of 2011

Expand on-site business in bio-fueland other energy domains

Seize opportunities of on-site supplies of oxygen, nitrogen andhydrogen at bio-fuel plants, etc

2011/11/14

Consolidated Full-Term Forecasts for
FY2012

2011/11/14

21

Consolidated Full-Term Forecasts for FY2012(Billions of yen)

FY2011(Results)

FY2012(Forecast)

Change

483.6

493.0

9.3

Operating
Income

35.4

35.0

-0.4

Ordinary
Income

34.1

Sales

7.3%

7.1%

12.7

Net Income

2.6%% change

1.9%

-1.3%

7.1%

32.0

-2.1

-6.3%

6.5%

17.7

4.9

39.0%

3.6%

2011/11/14

Industrial Gases Business Segment Forecasts for FY2012(Billions of yen)

300

Sales 288.6

50

91.9

97.3

40

＋5.3 (+5.8%)

200

100

296.9
Operating Income＋8.2 (+2.9%)

30

196.7

199.6

24.1

23.0

－1.1 (－4.7%)

20＋2.8 (+1.5%)

100FY2011Japan

FY2012 (forecast)
Overseas0

FY2011FY2012 (forecast)* The graph contains figures for both Japan and overseas sales.

2011/11/14

22

Electronics Business Segment Forecasts for FY2012
Sales
150

Operating Income

126.4
30.9

100

20

125.7 －0.7 (－0.6%)
32.0

15

＋1.0 (+3.5%)

10

95.5

50

0

FY2011
Japan(Billions of yen)

93.7

8.4

8.3 －0.1 (－1.8%)－1.8 (－2.0%)

50

FY2012(forecast)
Overseas

FY2011FY2012 (forecast)

2011/11/14

Energy Business Segment Forecasts for FY2012
Sales
40

Operating Income

37.6

36.6 －1.0 (－2.8%)

4

30

3

20

2

10

1

0

FY2011FY2012 (forecast)(Billions of yen)

0

1.7
1.4

FY2011＋0.3 (＋21.4%)

FY2012 (forecast)

2011/11/14

23

Other Businesses Segment Forecasts for FY2012
Sales

Operating Income

40

30.8
30

1.8

20

29.0

33.8＋2.9 (+9.6%)(Billions of yen)10

1.9
＋0.1 (+5.0%)

531.9＋2.8 (+9.9%)

3.0

3.5 ＋0.4 (+15.1%)

100

FY2011Japan

FY2012 (forecast)

0

FY2011FY2012 (forecast)

Overseas

2011/11/14

Disclaimer● This material is not intended for purposes of disclosure forsecurities transactions, and it is impossible to guarantee thatthe information contained in this presentation is accurate andcomplete.
● This presentation and report contain forward-looking
statements (estimates and forecasts) regarding the future plans,
strategies, activities and performance of Taiyo Nippon Sanso
Corporation. Forward-looking statements reflect management’s
assumptions and beliefs based on information available as of
the time of writing. Risks and uncertainties include, but are notlimited to, changes in general economic and specific market
conditions, currency exchange rate fluctuations, tax systems,
and regulations.
● Actual results may thus differ substantially from the said
forward-looking statements, and investment decisions should
not be made solely on the basis of the information provided
herein.
2011/11/14

24