Report on Business Performance for
the First Two Quarters of
the Fiscal Year Ended March 2010
(Fiscal 2010)

November 18, 2009

Taiyo Nippon Sanso Corporation

18,November,2009

Performance for the first two quarters of fiscal 2010
Billions of yen
Previous 1st
two quarters
Ratio to sales

Sales

255.9

(forecast)

Ratio to sales

205.0

Reporting 1st
two quarters
Ratio to sales

204.1

YoY change% change(51.8)(20.2%)

Operatingincome18.1

Recurringincome18.3

Net income

Reporting 1st
two quarters

7.1%

7.2%

9.9
3.9%

11.0
5.4%

10.3
5.0%

5.5
2.7%

12.7
6.3%

12.36.1%

6.8
3.3%

Change fromforecast% change(0.9)(0.4%)(5.3)

1.7(29.7%)+15.5%(5.9)

2.0(32.5%)+19.4%(3.1)

1.3(31.3%)+23.6%

18,November,20091

Quarter-by-quarter breakdown of sales and operating income
140
1,400

8.0%

bp
00
2+120
1,200
100
1,000

7.0%
6.0%
5.0%

80
800

1.3
+1600
60%

4.0%
3.0%

400
40

2.0%

200
20

Billionsof yen
単位：億円

+ 53

. 1%

1.0%

0Sales
売上高
Operatingincome
営業利益
Operating income
営業利益率
margin0.0%

FY09 1Q
09/3期-1Q

FY09 2Q
09/3期-2Q

FY09 3Q
09/3期-3Q

09/3期-4Q
FY09
4Q

10/3期-1Q
FY10 1Q

FY10
10/3期-2Q
2Q

124.8
1,248
9.2
92

131.1
1,311
9.0
90

120.7
1,207
7.3
73

119.0
1,190
3.7
37

96.6
966
5.0
50

107.5
1,075
7.7
77

7.3%

6.9%

6.1%

3.1%

5.2%

7.2%

18,November,2009

Quarter-by-quarter breakdown of sales and operating income(by geographical segment): Japan
1,200
120

9.0%
8.0%

1,000
100
7.0%
800
80

6.0%
5.0%

600
60
4.0%
400
40

3.0%
2.0%

200
20
1.0%
Billionsof yen
単位：億円

009/3期-1Q
FY09 1Q

09/3期-2Q
FY09 2Q

09/3期-3Q
FY09 3Q

09/3期-4Q
FY09 4Q

10/3期-1Q
FY10 1Q

10/3期-2Q
FY10 2Q

売上高
Sales

97.3
973

104.6
1,046

90.7
907

92.7
927

76.9
769

81.4
814

Operatingincome
営業利益

7.4
74

6.5
65

5.1
51

2.7
27

3.8
38

Operating income
営業利益率
margin

7.6%

6.2%

5.6%

2.9%

4.9%

7.0
70
8.6%

0.0%

18,November,20092

Quarter-by-quarter breakdown of sales and operating income(by geographical segment): North America
25250

14.0%
12.0%

200
2010.0%150
158.0%
6.0%

100
104.0%
50
52.0%
Billionsof yen
単位：億円

009/3期-1Q
FY09 1Q

09/3期-2Q
FY09 2Q

09/3期-3Q
FY09 3Q

09/3期-4Q
FY09 4Q

10/3期-1Q
FY10 1Q

10/3期-2Q
FY10 2Q
20.3
203

売上高
Sales

20.8
208

20.9
209

22.3
223

2.0
20

2.8
28

2.1
21

18.0
180
1.7
1715.6
156

Operatingincome
営業利益

111.1

0.77

Operating income
営業利益率
margin

9.6%

13.2%

9.4%

9.4%

7.1%

3.5%

0.0%

18,November,2009

Quarter-by-quarter breakdown of sales and operating income(by geographical segment): Other region
120
100
1012.0%
10.0%

10080
88.0%
80
60
66.0%
4.0%

60
40
42.0%
40
20
20.0%
(2.0％)-2.0%00(4.0％)-4.0%
Billionsof yen
単位：億円

(2)
-20

09/3期-1Q
FY09 1Q

09/3期-2Q
FY09 2Q

09/3期-3Q
FY09 3Q

09/3期-4Q
FY09 4Q

10/3期-1Q
FY10 1Q

10/3期-2Q
FY10 2Q

Sales
売上高

6.767

7.3
73

9.4
94

6.4
64

4.1
415.757

Operatingincome
営業利益0.550.7
70.88(0.3)-30.3
3Operating income営業利益率
margin

6.9%

9.5%

8.2%

(5.2%)
-5.2%

7.9%

0.6
69.7%

(6.0％)-6.0%

18,November,20093

Segment information

18,November,2009

First two quarters of fiscal 2010: Breakdown by segment (consolidated)

Gas businessBillions of yen
Overseas Overseas

Sales

200

Japan

Japan

175.0

Operating income

142.6
150

15

41.7

14.0

9.6

36.4
10100
133.3
106.2

50

500

期 quarters
First前twoFiscal 2009期 quarters
First当twoFiscal 2010前期
当期
First twoquarters First
two quarters
Fiscal 2009
Fiscal 2010

18,November,20094

First two quarters of fiscal 2010
Gas business overview (sales)
Billions of yen
Oxygen, nitrogen, argon

80.4

90

67.3

15.8

12.7

60

¥67.3 billion (YoY(YoY (16.3%))
Overseas
海外

Steep falloff in demand seen in the 1Q, withmajor decline in shipment volume, particularly in
the North American market. Demand followed arecovery path from the 2Q.

Japan
国内

Despite the overall significant drop in demand,
demand from the steel and electronics industries
started to recover from midway in the 1Q.

54.6

64.6
30

0'08/4-9
Japan'09/4-9Overseas

Gases for electronic device production
40

35.8

¥24.7 billion (YoY(YoY (30.9%))
24.7

30

海外
Overseas

19.5
20

11.0

Demand for specialty gases for the electronics
industry fell below the previous term’s level, but
demand from users in the U.S., Taiwan, andSingapore, among other markets, rose in the 2Q.

100

16.2

13.7

'08/4-9'09/4-9

Japan

国内
Japan

Overseas

Demand for gases for the semiconductor andLCD production bottomed out in the 1Q andrecovered steadily during the 2Q.

18,November,2009

First two quarters of fiscal 2010: Breakdown by segment (consolidated)

Machinery and equipment business
Sales

80

70.5Billions of yen

Overseas Overseas
JapanJapan

Operating income

60

16.9

51.3

6

5.0

11.4
4

40

2.9

53.5
200

39.9

First
two quarters
前期
Fiscal 2009Firsttwo quarters
当期
Fiscal 201020

前期
当期two quarters
First twoquarters First
Fiscal 2009
Fiscal 2010

18,November,20095

First two quarters of fiscal 2010
Machinery and equipment business overview (sales)

Billions of yen

Electronics-related equipment and installation20¥11.1 billion (YoY(YoY (21.4%))

14.2
11.1

1.3
12.9

10

9.5

0Overseas
海外

Sales revenues rose slightly in the U.S. andAsian markets.

国内
Japan

Demand dropped sharply due to thepostponement and/or downsizing of capital
investment.

1.6'08/4-9Japan'09/4-9Overseas

MOCVD equipment

0.8

1.00.8¥0.8 billion (YoY(YoY (4.8%))
Japan
国内

0.5

0.0

'08/4-9

Sales of MOCVD equipment for use in themanufacture of LEDs increased gradually, andinquiries became brisk. Overall sales for the firsthalf stayed roughly flat from the same period of
the previous term.

'09/4-918,November,2009

First two quarters of fiscal 2010
Machinery and equipment business overview (sales) Billions of yen
Cutting and welding-related equipment
302025.6¥16.8 billion (YoY(YoY (34.2%))
16.8

11.3

Overseas
海外

Demand fell sharply, particularly in the U.S. andChinese markets.

国内
Japan

Sales revenues posted a major decrease, due
mainly to a decline in the volume of capital
investment and construction work amid theeconomic downturn.

8.2
10

14.3
8.6

0

'08/4-9Japan'09/4-9Overseas

Air separation plants

9.7
100.7

¥6.5 billion (YoY(YoY (32.6%))
6.5

Overseas
海外

Inquiries from new customers in the steel andchemical industries have been growing, and thebusiness as a whole is holding firm.

Japan
国内

Capital investment levels in TNSC’s principal
customer industries were down sharply from thesame period of the previous term.

1.0
5

9.0
5.5

0

'08/4-9Japan'09/4-9Overseas

18,November,20096

First two quarters of fiscal 2010: Breakdown by segment (consolidated)

Housewares business
Sales

1210

10.4
0.3

Billions of yen

Overseas Overseas
JapanJapan

10.1

Operating income

0.2
382.1
2

6
10.0

1.6

9.8

4120First
two quarters
前期Fiscal 2009Firsttwo quarters
当期
Fiscal 20100

前期quarters 当期
First twoFirst two quarters
Fiscal 2009
Fiscal 2010

18,November,2009

Topics (April – September 2009)

18,November,2009

7

Main topics in the first two quarters of fiscal 2010
September2009

April 2009
● April Launch on market of MO Sun-Arc C● July Joined the Research Consortium

Series shielding gas for arc brazing withthe cold metal transfer (CMT) process

for Hydrogen Supply andUtilization

Japan

● May

Contract signed with Evonik Degussa Japan Co., Ltd.
for joint production of monosilane gas● MayCompletion of construction of filling plant atSaikai Sogo Gas Center● MayStart of sale of new high-performance nitrogen gas generator

Overseas● April Acquisition of Valley National Gases LLC● JulyEstablishment of Taiyo Nippon Sanso Shenwei (Shanghai)
Medical Gas Co., Ltd. (start of operations from October)● JulyLiquefied carbon dioxide plant starts operations inMalaysia● September New plant constructed forLinweld, Inc. in Iowa

18,November,2009

Growth Markets – Recent measuresin Asia

18,November,2009

8TNSC’s Global Business Network
Serving Five Continents from Nineteen Countries

Taiyo Nippon Sanso Group
Matheson Tri-Gas GroupMatheson Tri-Gas Sales Agents
18,November,2009

Recent measures in Asia

• China
Establishment of Taiyo Nippon Sanso Shenwei(Shanghai) Medical Gas Co., Ltd.

• Singapore / Malaysia
Further steps taken under plan to expand operations
into Malaysia• Philippines
Progress made in implementing the plan to expand
the Group’s production facilities to other parts of thePhilippines outside the island of Luzon• Vietnam
Strategic investments made, in line with plan toexpand operations to the whole of Vietnam
18,November,20099

Increases in gas liquefaction capacity in Asia
*Percentage breakdown is as ofthe 4th quarter of Fiscal 2009.

Other

6.0%
35,00030,00025,00020,00015,00010,0005,0000NorthAmerica

Japan

16.5%

77.4%

33600

Gas liquefaction capacity in Asia

16500

17100

19300

China

Singapore

Philippinesup to 2006

2007

2008

12300

VietnamThailand

2009

2010

18,November,2009

Business Focus (1) – Reinforcement of Vietnamese operations
Lao CaiLang Son
Ha NoiNinh Binh

Hai PhongThanh Hoa

1996 Vietnam Japan Gas (VJG) established (head office in Bien
Hoa)
2007 VJG opens office in Hanoi
2009 Joint venture formed with Than Gas, the No. 2 gas companyin the north of Vietnam, under the name of Northern Vietnam
Japan Gas (VJG’s equity stake is over 80%)

HueDa Nang

Quy NhonNorthern Vietnam Japan Gas concludes agreement withthe Thang Long II industrial park, under which a plant isbeing constructed in northern Vietnam with an annualliquefaction capacity of 3,500m3/h.
VJG has received an order for the on-site supply to oneof Vietnam’s leading steelmakers (in the suburbs of Ho
Chi Minh City) at 18,000 m3/h of gas and 5,300 m3/h ofliquefied gas.

Da LatBien Hoa
Long XuyenHo Chi Mihn City(Sai Gon)

Ca MauThe TNSC Group is also taking steps to bolster its
business base in southern Vietnam with the aim ofacquiring the largest share of the nationwide market.

18,November,200910Business Focus (2) – Medical gas home supply businessstarted up in China

Signing of joint-venture agreement (May 28, 2009)

Opening ceremony at FRP gas cylinder filling station (Nov. 5, 2009)

Taiyo Nippon Sanso Shenwei (Shanghai)
Medical Gas Co., Ltd.
Established: July 2009
Start of operations: October 2009
PaidPaid-in capital: US$2 millionPortable FRP gas
cylinder for outdoor use

Equity stakes: TNSC 65%; Shanghai Shenwei
Medical Gas Co.,
Co., Ltd. 35%

FRP gas cylinder filling line

18,November,2009

Business Focus (2) – Medical gas home supply businessstarted up in China

TTN
NSSCC

25% stake

Shanghai Shenwei
Gas Filling

Shanghai
ShanghaiTNSC
TNSCFilling station for
10L FRP gas cylinders

Production of liquefied
oxygen for medical use

Liquefiedoxygen for
medical use

Filling on
consignment

65% stake

Established a comprehensive
oxygen supply system fromliquefaction through filling to sales

Taiyo
TaiyoNippon
NipponSanso
SansoShenwei
Shenwei(Shanghai)(Shanghai)Medical
MedicalGas
Gas
Joint-venture sales company (newly established)
Medical-use
liquefied oxygen

Medical-use
oxygen (gas)Hai
Hai Jiawei
Jiawei Medical
Medical Gas
Gas
End Users

We aim to provide China’s
highest quality medical gas
supply service

At-home medical use

Medical facilities(hospitals, etc)

18,November,200911

Helping to realize a low-carbon society

18,November,2009

Hydrogen supply technology

Scenario for spread of hydrogen
supply stations

Fuel-cell-related market (fuel cell systems, hydrogenstations, hydrogen fuel)Fiscal 2009¥9.7 bn(Source: Report by Council on Competitiveness-Nippon)(source: Fuji Keizai Report)
Shimokawa

Fiscal 2021

¥1,500 bn (of which demand for hydrogen

40 stations
Obihirostations is estimated at ¥25 bn)

1,000stations

Technological issues surrounding hydrogen stations include
measures to cope with high-pressure hydrogen, need formore compact in-vehicle equipment, and cost reductions.

5,000 stations

Toyama70 MPa hydrogen supply
stations
Completed orders receivedfor three out of four stations

Fukuoka Hydrogen
Energy Strategy“Hy-Life Project”

KyotoKitakyushu

IidaToyota
Sakai

Yusuhara
Minamata(Senju, Asahi in Yokohama,Funabashi)

Osaka FCV
Promotion Council

Tokyo Metropolis Renewable
Energy Strategy
ChiyodaWard “Energy Front-Runner Chiba”
Yokohama
Aichi Prefecture Hydrogen Energy
Industry Council
Aichi Council for Promoting theSpread of FCVs
Model City Concept for Automotive
Fuel Cells (Toyota City)

Miyakojima“Hydrogen Highways”:
Installing hydrogen supply stations
in service areas on expressways

Demand for new stations
In 2010 and after: around 10
per annum
In 2015 and after: 60 or more
per annum“Hydrogen Towns”:
Concentrated construction ofhydrogen supply stations

Examples of measures taken
so far by local governments

Environmental “model cities”

Concentration of hydrogen stations

Sparse ← → Dense

Dia. 4.9-1 Diagram contrasting spread of “Hydrogen Towns”
and “Hydrogen※産業競争力懇談会（ＣＯＣＮ）報告書よりHighways” with measurescurrently taken by local governments

18,November,200912

Measures taken toward establishing a superconductivityrelated business
Wind-power
generation
Superconducting
generators

Smart GridElectronics

Photovoltaic
power generation

Electricpower

SMES* systems enable long-distancetransmission of electric power withoutcompromising the stability of thesupply system

Medical care

Superconductivity
marketUndergroundtransformer stations
Superconducting
transformer stations

Use of existing conduits
Superconducting cableResearchOthers

Reliable supply of electric power to urban areas via superconducting cableand superconducting transformer stations

Source: NEDO website

Transport* SMES systems: Superconducting Magnetic Energy Storage systems

Superconducting electric motor formarine and rail use
The market for “smart gridrelated equipment” is estimatedat a combined ¥12.5 trillion overthe 20 years from 2010 to 2030 in
the U.S., the EU and Japan.
(Estimates by the Nomura Securities Financialand Economic Research Center)

Inflow (outflow) points
for liquid nitrogen
Motor frame

Rotor
PM (permanent magnet)
Back-yoke

Motor shaft

Armature cryostat
Built-i n s uperc onducti ng c oil /FLC (fl ux coll ector)

Attachment point for
power cable* Marine-use superconducting electric motor(Source: IHI)

* Vessel powered by superconducting electricmotor (Source: Nakayama Shipbuilding website)

18,November,2009

Refrigeration system for superconducting equipment
Cold neon gas

Compact neon
refrigerating unitCooler■ The world’s first refrigeration

2,000 mmsystem that operates according tothe Brayton Cycle, made possible
through the use of neon gas■ Compact expansion turbine using
magnetic bearing (withoutrotational noise)■ Compact turbo compressor using
magnetic bearing (withoutrotational noise)
1,400 mmHeat Exchanger

Specifications
Refrigeration efficiency: 0.06 at 80K
Refrigeration capacity: 2kW at 65 K

◆ Practical realization of world’s firstrefrigerating system using neon
◆ Realizes advances in technologies
for the production and handling of
sub-cool liquid nitrogen

Main markets involved● Superconducting magnetic

energy storage (SMES)● Superconducting powertransformer equipment(transmission)● Superconducting power cable(transmission)● Superconducting power
generation equipment● Superconducting electricmotors (transportation field)

Refrigeration system forsuperconducting equipment★ Supplying and managing refrigeration

systems for the extensive use of superconducting systems throughout society
18,November,200913

Fiscal 2010 consolidated full-term
forecasts

18,November,2009

Fiscal 2010 consolidated full-term forecasts
Billions of yen

Fiscal 2009

Fiscal 2010
(forecasts)

YoYchange% change

495.7

450.0

(45.7)(9.2%)

Operatingincome

29.1

27.4(1.7)(6.0%)

Recurringincome27.9(3.3)(12.0%)(3.2)(19.6%)Sales

Net income

5.9%

6.1%

24.6

5.6%

5.5%

16.5
3.3%

13.3
3.0%

18,November,2009

14Fiscal 2010 consolidated full-term forecasts by segment
Gas businessBillions of yen
Overseas Overseas

SalesJapanJapan

400

Operating income

329.8

303.4

300.4
300

30

22.4

78.1
70.4

78.3

20.2 20.3

20200
251.6

100010233.0222.10前期
当初2010今回
Fiscal2009 Fiscal
forecasts
results
initialrevised

Fiscal前期2009 当初予想
当期
Fiscal 2010 forecasts
results
initialrevised

18,November,2009

Fiscal 2010 consolidated full-term forecasts by segment
Machinery and equipment businessBillions of yen
Sales

150

Overseas Overseas

147.4

Japan

131.5

Japan

128.5

38.6
41.1

Operating income
15

11.5

37.1

100

9.0
1050

0

108.7
90.4

91.4

8.5

50
Fiscal前期2009results

Fiscal 2010 forecasts
当期
今回
initialrevised

前期
当初 2010今回
forecasts
Fiscal2009 Fiscal
initialrevisedresults

18,November,200915

Fiscal 2010 consolidated full-term forecasts by segment
Housewares business
Sales

20

Billions of yen

Overseas Overseas
Japan

18.4

18.10.70.7Japan

18.1
0.7

Operating income
415

2.6

32.2
10
17.7

2

17.4

17.4
1

50

2.20
Fiscal 2009前期

Fiscal 2010 forecasts
当期
今回

results

initialrevised

前期
当初 2010今回
Fiscal2009 Fiscal
forecasts
results
initialrevised

18,November,2009

Disclaimer● This material is not intended for purposes of disclosure for securities

transactions, and it is impossible to guarantee that the information contained inthis presentation is accurate and complete.
● This presentation and report contain forward-looking statements (estimates andforecasts) 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 not limited 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.

18,November,200916