Consolidated Business Performancefor the First Half of the Fiscal YearEnding March 2015 (Fiscal 2015)

November 5, 2014TAIYO NIPPON SANSO Corporation0Contents

1. Consolidated Business Performance for
the First Half of FY2015
2. Segment Report
3. Topics
4. Consolidated Full-Year Forecasts for FY2015

1

Contents

1. Consolidated Business Performance for
the First Half of FY2015
2. Segment Report
3. Topics
4. Consolidated Full-Year Forecasts for FY2015

2

Consolidated Business Performance for the First Half of FY2015(Billions of yen)First halfFY2014
MarginFirst half ofFY2015(Announced targets)
MarginFirst half ofFY2015(Results)
MarginYoY
Change% change

249.6

271.0

268.9

+19.2

Operating
Income

14.3

16.8

16.4

+2.0

Ordinary
Income14.1

Net Income

12.2

Sales

5.8%

5.7%

4.9%

15.8
9.8

6.2%

5.8%

3.6%

16.5
9.9

+7.7%

6.1%

6.2%

3.7%

+14.2%+2.3+16.7%-2.3-19.0%

3

Other Financial Results for the First Half of FY2015(Billions of yen)Mar.2014

Sept.2014

ChangeTotal assets

731.6

702.1

-29.5

Shareholders’ equity

274.3

278.1

3.8

Net interest-bearing debt

219.7

213.1

-6.6

0.800.77-0.03

Sept.2013

Sept.2014

ChangeCapital expenditure

13.6

14.8

1.2

Investment and loan

0.7

1.8

1.1

Depreciation and amortization

18.3

20.2

1.9

(Amortization of goodwill)

1.6

2.4

0.7

R&D expenses

1.2

1.4

0.1

FCF (investing activities)

14.9

10.6

-4.2

Net D/E ratio

・Total assets decreased
mainly due to a large
reduction in cash anddeposits
・Amortization of goodwill
increased due to theacquisition of Pacific
Medico Co., Ltd. andContinental Carbonic
Products, Inc.
・FCF declined mainly due
the absence of the gainon sales of noncurrent
assets recorded in thesame period last year
4Analysis of Year-on-Year Change (1)【Sales】

First Halfof FY2014(Billions of yen)First Halfof FY2015

Higher sales +19.2 billion yen
Gas Business in Japan +4.7 billion yen,
Gas Business in the US +9.3 billion yen,
Gas Business in Asia +4.4 billion yen,
Other Businesses +0.8 billion yen* Including foreign exchange impact of +5.7 billion yen(U.S. 4.1 billion yen, Asia 1.6 billion yen)

【Operating Income】

First Halfof FY2014(Billions of yen)First Halfof FY2015

Higher operating income +2.0 billion yen
Gas Business in Japan +0.9 billion yen,
Gas Business in the US +0.5 billion yen,
Gas Business in Asia +0.4 billion yen,
Other Businesses +0.3 billion yen
Elimination of intra-company transactions-0.2 billion yen* Including foreign exchange impact of +0.3 billion yen(U.S. 0.1 billion yen, Asia 0.1 billion yen)5

Analysis of Year-on-Year Change (2)【Ordinary Income】(Billions of yen)+0.2 +0.1【Net Income】(Billions of yen)

+2.3
-5.8+2.0

First Half Operating Equity in Other First Halfof FY2014 Income earnings ofof FY2015
affiliates•Increase in equity in earnings ofaffiliates from THERMOS K.K.

First Half Ordinary
Incomeof FY2014

Income First HalfExtraordinary
Gain and Loss taxes, etc.

of FY2015

・Extraordinary gains on sale of fixed
assets, etc., recorded in the same period
last year・Lower income taxes

6

Contents

1. Consolidated Business Performance for
the First Half of FY2015
2. Segment Report
3. Topics
4. Consolidated Full-Year Forecasts for FY2015

7

Segment Information: Breakdown of Sales and Operating IncomeSales(Billions of yen)First HalfFirst Halfof FY2014of FY2015

Gas Business in Japan

160.8

165.5

Gas Business in the US

53.2

62.6 +17.6%

Gas Business in Asia

25.9

30.3 +17.0%

Other

9.5

10.3+8.5%

249.6

268.9+7.7%

Segment Total

Operating Income% change+2.9%(Billions of yen)First
Half ofFY2015+2.9%+17.0%+17.6%+8.5%
Gas Business in Japan
Gas Business in the US
Gas Business in Asia

First
Half ofFY2014

Other(Billions of yen)First HalfFirst Halfof FY2014

of FY2015

Gas Business in Japan

10.2

11.2+9.1%

Gas Business in the US

2.12.7+27.0%

Gas Business in Asia1.1

1.5+35.9%

Other

1.4

1.7+25.0%

Adjustments-0.6-0.8-41.2%

Segment Total

14.3

16.4+14.2%% change(Billions of yen)

+35.9%First
Half ofFY2015
FirstHalf ofFY2014+9.1%+27.0%+25.0%
Gas Business in Japan
Gas Business in the US
Gas Business in Asia
OtherGas Business in Japan
Sales(Billions of yen)First Half First Halfof FY2014 of FY2015% change

Bulk/On-site

65.2

67.6

+3.7%

Package/Hard goods

14.7

15.9+8.1%

Plants and Equipment

16.5

16.7+0.8%

Medical

8.9

10.8+22.2%

Total105.4

111.1+5.4%

Gases

25.4

25.7+1.4%

Equipment and11.4

9.2-18.6%

Total

36.8

35.0-4.8%

Gases

16.9

17.8+5.5%

Equipment

1.6

1.4-8.6%

Total

18.5

19.3+4.3%

Segment Total

160.8

165.5

+2.9%

IndustrialGas

Electronics

EnergyInstallation

Operating Income(Billions of yen)First Half First Halfof FY2014 of FY2015

Segment Total

10.2

11.2% change+9.1%≪Sales≫◆Industrial Gas

・On-site demand from steel industry was strong
・Solid sales of welding-related equipment
・Sluggish demand for plants
・Medical benefited from the positive impact of
new consolidations and solid sales in thestable isotope business◆Electronics

・Solid sales of electronic materials gases
・Large orders were recorded in the same period lastyear for equipment installation and MOCVD
equipment◆Energy・Transferred increased import prices to selling prices≪Operating Income≫Higher earnings on the back of the positive
impact of rationalization and higher sales ofelectronic materials gases and other products,
despite higher-than-anticipated power costs

9Gas Business in the USSales(Billions of yen)First Half First Halfof FY2014 of FY2015

IndustrialGas

Electronics% change

Bulk/On-site

12.8

19.7+54.2%

Package/Hard goods

37.7

40.2+6.5%

Total

50.6

60.0+18.6%

Gases

2.0

1.9-3.1%

Equipment andInstallation

0.6

0.6+0.8%

Total

2.6

2.6-2.1%

Plants and Equipment

MedicalGases

Energy

Total

53.2

62.6

Operating Incomeof FY2014 of FY2015
2.1+17.6%(Billions of yen)First Half First Half

Segment Total

Positive impact from foreign exchange
effects(FY2014 First Half: 95.73 yen / dollar→ FY2015 First Half: 102.46 yen / dollar)
Continental Carbonic Products, Inc.,a newly consolidated carbon dioxide gas
manufacturing company, contributed tosales≪Operating Income≫Equipment

Segment Total≪Sales≫2.7% change

Continental Carbonic Products, Inc.
recorded operating income greater than
the amount of amortization of goodwill,in addition to foreign exchange effects
Gas prices, including helium prices, wereraised+27.0%

10Gas Business in Asia
Sales

(Billions of yen)First Half First Halfof FY2014 of FY2015

Industrial
Gas

Electronics% change

Bulk/On-site

7.1

7.8+9.4%

Package/Hard goods

5.5

6.2+13.9%

Plants and Equipment

4.2

4.1-1.9%

Total

16.9

18.2+8.0%

Gases

8.5

11.2+32.6%

Equipment andInstallation

0.4

0.7+54.5%

Total

9.0

12.0+33.8%

25.9

30.3

+17.0%

MedicalGases

EnergyEquipment

Total

Segment Total

Operating Income(Billions of yen)First Half First Halfof FY2014 of FY2015

Segment Total

1.1

1.5% change≪Sales≫Positive impact from foreign currency
effects
Solid sales were recorded in theelectronics business, primarily in Taiwan,
China, and South Korea
Singapore-based Leeden Limited saw
strong sales in existing businesses, inaddition to the positive impact of anacquisition≪Operating Income≫Among the foregoing factors, strong
sales in the electronics business had aparticularly large positive impact onearnings+35.9%

11Other Businesses
Sales(Billions of yen)First Half First Halfof FY2014 of FY2015

JapanTHERMO S
Asia
Total
Japan
OtherTotal
Segment Total

7.4
0.8
8.2
1.2
1.2

7.7
1.3
9.0
1.2
1.2

+3.7%
+58.2%
+9.3%
+3.1%
+3.1%

9.5

10.3

+8.5%

Operating Income(Billions of yen)First Half First Halfof FY2014 of FY2015Segment Total% change

1.4

1.7% change+25.0%≪Sales≫◆Thermos・Solid sales centered on new products,
with no impact from the consumption tax
rate increase in Japan・Brisk sales overseas, primarily in SouthKorea≪Operating Income≫◆Thermos・Transferred the amount of the higher
costs caused by a weaker yen, to selling
prices by raising prices in August 201312

Overseas Sales Ratio(Billions of yen)≪Overseas Expansion Measures ≫February 2014 U.S.

AsiaU.S.
Overseas sales ratio

Acquired Continental Carbonic Products,
Inc., the second largest U.S. manufacturerin the dry ice industry

February 2014 Indonesia

Established PT. Samator Taiyo Nippon
Sanso Indonesia, an industrial gas joint
venture, in Java, Indonesia

March 2012 Singapore

Acquired Leeden Limited, a manufacturer
and distributor of welding-related
equipment, safety goods, and industrialgas

May 2010 U.S.

Acquired Western International Gas &Cylinders Inc., the largest U.S.
manufacturer and wholesale supplier ofacetylene

March 2010 India
FY2010(Result)

FY2011(Result)

FY2012(Result)

FY2013(Result)

FY2014(Result)

First Halfof FY2015(Results)

Acquired K-Air India Gases PrivateLimited, a manufacturer and distributor ofindustrial gas

13Breakdown of Segment Sales and Operating Income
Sales
Industrial Gas(Billions of yen)First HalfFirst Halfof FY2014

of FY2015

172.9

189.4% change

48.5

49.7

Energy

18.5

19.3

+4.3%

Other

9.5

10.3+8.5%

249.6

268.9+7.7%

Operating Income+4.3%+9.5% FirstElectronics

Segment Total(Billions of yen)

+2.5%

Half ofFY2015+9.5%+2.5%+8.5%
Industrial Gas
Electronics

First
Half ofFY2014

EnergyOther(Billions of yen)First HalfFirst Halfof FY2014

of FY2015

Industrial Gas

10.711.9+11.3%

Electronics

2.2

2.7

Energy0.6

0.5+23.0% First
Half ofOther

1.4

1.7+25.0%

Adjustments-0.5-0.5+0.4%

Segment Total

14.3

16.4+14.2%% change-5.3%(Billions of yen)

-5.3%

FY2015First
Half ofFY2014+11.3%+23.0%+25.0%
Industrial Gas
Electronics
EnergyOther

Contents

1. Consolidated Business Performance for
the First Half of FY2015
2. Segment Report
3. Topics
4. Consolidated Full-Year Forecasts for FY2015

15

Topics
Japan◆Hydrogen Station Business◆Reorganization of LP Gas Business in Japan

Overseas◆Expand MOCVD Equipment Sales◆Expand Asian Business◆Expand the Thermos Business16

Hydrogen Station Business
Aiming to expand hydrogen station sales®

Developed the Hydro Shuttle, a compact, low-cost package-type hydrogen station, inAugust 2013 to supply hydrogen gas for fuel cell vehicles (FCVs)®

Advantages of Hydro Shuttle

・Only half the cost of conventional hydrogen stations
・Package-type station reduces on-site installation costs
・Reduces required installation area

Strengthened sales by targeting both packagetype and mobile stations
Planned installation ofcommercial stations
Off-siteOn-siteFY2013

171FY2014

22PackageMobileOtherTotal

18712124FY2015

Plans call for installation
at 100 sites by 2015

Reorganization of LP Gas Business in Japan
Merger of five LP Gas business subsidiaries
Company Name: TAIYO NIPPON SANSO ENERGYCORPORATION
Merger date: April 1, 2015
Shareholder: TAIYO NIPPON SANSO CORPORATION 100%
Head office: Kanie Town, Ama District, Aichi Prefecture
Chubu Region：1 Head Office, 1 regional office, 5 branches and sales offices

Taiyo Nippon Sanso Energy Kanto Corporation

Tohoku Region：1 regional office

Taiyo Nippon Sanso Energy Chubu Corporation
Taiyo Nippon Sanso Energy Chugoku
Corporation
Taiyo Nippon Sanso Energy Kyushu Corporation

New company:
TAIYO NIPPON SANSOENERGYCORPORATION

Saan Gas Shikoku K.K.

中部地区 1本社 1支社 5支店・営業所
東北地区
1支社
KantoRegion：1 regional
office, 10 branches and sales offices
関東地区
1支社 10支店・営業所
Chushikoku Region：1 regional office, 7 branches and sales offices
中四国地区
1支社 7支店・営業所
Kyushu Region：1 regional office, 10 branches and sales offices
九州地区
1支社 10支店・営業所
Total：1
Office, 5支社
5 regional
offices, 32 branches and sales offices
合計 Head1本社
32支店・営業所

Tohoku東北地区
RegionMerger puropose:・Strengthen management platform
・Expand business scale・Streamline administrative divisions

Chushikoku
RegionChubu
中部地区
RegionKanto Region
関東地区

・・・本社、支社、支店併設…Head Office, regional office, branch co-located
・・・支社、支店併設…Regional office and branch co-located…Regional office
・・・支社

九州地区
KyushuRegion…Branch and sales office

・・・支店・営業所

18

Expand MOCVD Equipment Sales
The Company’s MOCVD equipment business strategy

Accelerate global business expansion by capturing demand for cutting-edge equipment primarily
from the U.S. and Taiwan, while maintaining a high share of equipment for the Japanese market
Equipment delivery approved to Sandia National Laboratories, a U.S. government research institution【Sandia National Laboratories】

Outline: A national science and engineering laboratory for the U.S. Department of Energy’s National Nuclear
Security Administration (NNSA)
Research : Research and development in national security, energy, environmental technologies and economic
competitiveness
Uses of equipment delivered by the Company: Research and development in compound semiconductors suchas aluminum gallium nitride (AlGaN) and Aluminum nitride (AlN), etc.

Equipment delivered to Taiwanese LED manufacturer Epistar Corporation【Epistar Corporation】
Outline of company: World’s largest LED manufacturer
Manufacturing of high brightness LED products for traffic lights, cellphones, laptops, etc.
Equipment delivered by the Company: UR25K system, capable of growing
on 7 6-inch sapphire substrates in the same growth run.
19

Expand Asian Business
1. Holding Company Established in Singapore
Company name: Taiyo Nippon Sanso Holdings Singapore Pte. Ltd.
Established: July 30, 2014
Shareholder: TAIYO NIPPON SANSO CORPORATION 100%
Purpose: Accelerate business growth by expanding functions as a regional headquarters inSoutheast Asia into the future

Current structure

Post reorganization

TAIYO NIPPON SANSOCORPORATIONTAIYO NIPPON SANSOCORPORATION
Holding company

Holding company

LNOX

Operationalsupport, etc.

Southeast Asiansubsidiaries

Steadily
expandholdingcompany
functions

LNOXSoutheast Asiansubsidiaries※ LNOX＝Leeden National Oxygen Ltd.
20

Expand Asian Business
2. Merger of Singapore subsidiaries

Established Leeden National Oxygen Ltd. by merging three consolidated subsidiaries
in Singapore in October 2014

Outline of company

Business plan

Company name: Leeden National Oxygen Ltd.
Sales composition: gas business 42%, weldingrelated business 36%, safety goods 22%

Leeden Limited

National Oxygen
Pte. Ltd.

Taiyo Nippon
Sanso Singapore
Pte. Ltd.

Leeden National
Oxygen Ltd.

Gas business:・Strengthen activities in promising fields such aslife sciences and energy
・Expand business in the Malaysian market
・Expand sales of high-value-added products
Welding-related business:・Develop markets further through M&As, joint
ventures and opening new sites
・Upgrade and expand in-house brand products
Other:
・Raise earnings by cutting costs

Integrate the Singapore
and Malaysian business21Expand Asian Business3. Install a new liquefied carbon dioxide manufacturing facility in Singapore

LNOX conducts a carbon dioxide gas manufacturing business in Malaysia. It plans to install a carbon dioxide (CO2)
recovery and liquefaction plant at Neste Oil Singapore's renewable diesel refinery located in western Singapore.
LNOX will commence a liquefied carbon dioxide manufacturing business in Singapore by procuring feedstock gas
from Neste Oil Singapore.
Purpose: To secure the company’s own, stable source of carbon dioxide gas by building a new plant, with theview to capturing solid demand for carbon dioxide gas for welding applications in automobile manufacturing,shipbuilding, and other sectors.

Installationlocation

Start of operation

Tuas, Singapore

September 2015

Productioncapacity
Existing capacity

45 tons/day

New capacity

72 tons/day

Total

117 tons/day

Supply carbon dioxide gas from the new plant toSingapore and Malaysia’s Batam Island and Bintan Island

New plant

22

Expand Asian Business4. Install a new air separation unit in Malaysia
Project outline:
Business plan:

Sabah Oxygen, a subsidiary of LNOX, is installing a new Taiyo Nippon Sanso air
separation unit in Kota Kinabalu, Sabah
Scheduled to start operations in June 2015
Strengthen supply of industrial gases to shipyards and hospitals in existing areas
Capture demand for industrial gases for growing petroleum and gas development andchemical plants in East Malaysia

5. Expand business areas in Malaysia
Project outline:

Scheduled to obtain a site in Sarawak within the year through an M&A, following on
from Sabah
Strive to expand the gas business throughout all of the East Malaysia region
Malaysia

6. First on-site project in Indonesia

Kuala Lumpur

Singapore

Project outline： PT. Samator Taiyo Nippon Sanso Indonesia will build theCompany’s first air separation unit in Indonesia in orderto supply nitrogen gas on-site to a Japanese steelmakerin Java, Indonesia.
Installation location
Bekasi, Java

Start of operationJanuary 2017

Borneo Island

JakartaIndonesia
Surabaya

Java

Tangerang

JakartaBekasiIndustrial Park MM2100, Bekasi

23

Expand the Thermos Business
Establish a subsidiary to produce stainless steel vacuum
insulated bottles in the Philippines
Company name: Vacuumtech Philippines Inc.
Established: July 2014
Planned start of production: December 2015
Production capacity: 10 million bottles/year
Investment amount: Approx. 3.9 billion yenPlant nameLocation

Production items

Thermos (China)
Housewares

Kunshan, Jiangsu,
China

A wide range ofproducts

Thermos (Jiangsu)
Housewares

Huai’an, Jiangsu,
China

Products for China,
Europe and North
America

Top Thermo
Mfg.(Malaysia)

Selangor,
Malaysia

Ultralight, compact
products

New company in
the Philippines

Batangas,
Philippines

Ultralight, compact
products【Artist’s rendering of new plant】

24

Contents

1. Consolidated Business Performance for
the First Half of FY2015
2. Segment Report
3. Topics
4. Consolidated Full-Year Forecasts for FY2015

25

Consolidated Full-Year Forecasts for FY2015(Billions of yen)

FY2014(Results)
MarginSales

FY2015
forecast

FY2015
forecast(Previous forecast) (Revised forecast)MarginMarginYoY
Change% change

522.7

550.0

550.0+27.2+5.2％

Operating
Income31.4

35.0

35.0+3.5

Ordinary
Income

30.5

33.2

33.2

Net Income

20.1

20.0

20.0

6.0%

5.8%

3.9%

6.4%

6.0%

3.6%

6.4%

6.0%

3.6%

+11.1%

+2.6

+8.7%

-0.1-1.0%

26

Full-Year Forecasts for FY2015 by Business Segment
Sales(Billions of yen)

FY2014FY2015Full-Year

Full-Year

341.8

343.1+0.4%

Gas Business in the US107.5126.4+17.6%

Gas Business in Asia

54.3

60.5+11.3%

Other

19.0

20.0+5.2%

Segment total

522.7

550.0+5.2%

Gas Business in Japan

Operating Income% change（単位：億円）(Billions of yen)

FY2015
Full＋0.4%+11.3%+17.6%+5.2%
Gas Business in Japan
Gas Business in the US

FY2014Full

Gas Business in Asia
Other(Billions of yen)

FY2014FY2015Full-Year

Full-Year

Gas Business in Japan

22.4

24.4+8.5%

Gas Business in the US

4.8

5.5+13.6%

Gas Business in Asia

2.6

3.3+23.6%

Other

3.0

3.2+4.4%

Adjustments-1.5-1.4+10.8%

Segment total

31.4

35.0+11.1%% change(Billions of yen)
（単位：億円）FY
2015
FullFY2014
Full+23.6%+8.5%+13.6%＋4.4%
Gas Business in Japan
Gas Business in the US
Gas Business in Asia
Other27

Disclaimer●

This material is not intended for purposes of disclosure for securities
transactions, and it is impossible to guarantee that the information
contained in this presentation is accurate and complete.

●This presentation and report contain forward-looking
statements (estimates and forecasts) regarding the futureplans, 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. Actualresults reflect a variety of risk and uncertainties. These risks
and uncertainties include, but are not limited to, changes ingeneral economic and specific market conditions, currency
exchange rate fluctuations, tax systems, and regulations.

● Accordingly, actual results may differ from forecasts issued at
this time. With this in mind, please refrain from relying solely
on these materials when making investment decisions.
28