Report on Business Performance for
the Fiscal Year Ended March 2009

May 19, 2009

Taiyo Nippon Sanso Corporation
19, Maｙ , 2009

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 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 specificmarket conditions, currency exchange rate fluctuations, tax systems, andregulations. Actual results may thus differ substantially from the said
forward-looking statements, and investment decisions should not bemade solely on the basis of the information provided herein.

19, Maｙ , 20091

Fiscal 2009 consolidated results

19, Maｙ , 2009

Fiscal 2009 consolidated full-term results(Billions of yen)

Sales

FY2007

FY2008(latestestimate)

FY2008(actual)YoY change

Change fromestimate

507.7495.0

495.7

-11.9

+0.7

-2.4%

Operatingincome38.7

Recurringincome38.5

Net income
19, Maｙ , 2009

7.6%

7.6%

21.9
4.3%

29.0
5.9%

27.4
5.3%

15.0
3.0%

29.1
*5.9%

27.9
5.6%

16.5
3.3%

-9.6
-24.8%-10.5-27.4%-5.3-24.6%

+0.2%

+0.1
+0.6%

+0.5
+2.0%

+1.5
+10.2%*Note: For the reporting period, the following negative factors impacted earnings.
a) ¥1.90 billion increase in depreciation expenses due to changes in the useful lives of longlived assets as a result of an amendment to the taxation system, and b) the posting of ¥1.42
billion in expenses for the amortization of goodwill recognized by an overseas subsidiary as aresult of the mandatory application of new accounting standards

2

Breakdown by segment(consolidated)

19, Maｙ , 2009

Gas business
Sales

338.3

329.8 (-2.5%)(Billions of yen)

350
300

Overseas

87.7

Overseas78.2(-10.9%)

250

35200
150

Operating income

30Japan

Japan

250.6

251.6

100(+0.4%)2520
1530.91050
022.4(-27.5%)

50FY2007

FY2008FY2007

FY200819, Maｙ , 20093Oxygen, nitrogen, argon
Sales: Billions of yen

150100

155.5

152.4

29.930.7(+2.5%)

125.6

121.7

¥152.4 billion (minus 2.0% YoY)
Overseas

Sales volume in North America down slightly.
Demand favorable in Southeast Asia,
particularly Singapore and the Philippines.

JapanSharp fall in demand for oxygen andargon in the second half led to major fallin sales. Demand for nitrogen roughly
unchanged.

(-3.1%)

500FY2007

JapanFY2008

Overseas

Gases for electronic device production
Sales: Billions of yen

68.6

80

62.5

60

39.6

¥62.5 billion (minus 9.0% YoY)Overseas

Sales fell sharply due to production
cutbacks by users in North America,Taiwan, and other East/Southeast
Asian economies.

Japan

Steep decline in demand in thesecond half, owing to production
cutbacks by makers of semiconductor
devices and LCDs.

34.2

40(-13.5%)

20

29.0

28.3
(-2.8%)

0FY200719, Maｙ , 2009

Japan

FY2008Overseas

Machinery & equipment business(Billions of yen)

Sales

200

150

151.7 147.4(-2.8%)
Overseas38.0

Overseas

38.6

Operating income
15(+1.7%)100

50010Japan

Japan

113.6

108.8(-4.3%)

11.5
50FY2007

FY200810.4(+11.4%)

FY2007

FY200819, Maｙ , 20094

Electronics-related equipment and installation
Sales: Billions of yen

37.2

36.0

406.3(-15.1%)

7.4

30

29.8

20

29.7

10

¥36.0 billion (minus 3.3% YoY)
Overseas
Japan(-0.3%)

0FY2007

Demand declined in North
American market.
Revenues at previous year’slevel thanks to smooth progressin large-scale projects.

FY2008JapanOverseas

MOCVD equipment
Sales: Billions of yen

2.5

2.4

32

0.3

0.0
(-89.6%)

2.1

2.51

¥2.5 billion (plus 5.5% YoY)
Demand growth slowed down
temporarily due to the sudden
business downturn, but inquiries forlarge-size models have once again
become brisk.

(+21.3%)

0FY2007

FY2008Japan19, Maｙ , 2009

Overseas

Cutting and welding-related equipment
Sales: Billions of yen

60

51.9

40

24.9

21.8
(-12.6%)

27.0

28.3
(+4.8%)

20

0

50.1

FY2007

Japan¥50.1 billion (minus 3.6% YoY)
OverseasJapan

FY2008Overseas

Demand declined in North
American and Asian markets.
Sales fell sharply in second
half, but full-term sales
revenues were up, thanks tofirm sales to shipbuilders.

Air separation plants
Sales: Billions of yen

30

18.6

18.8

3.2

2.5

20

16.3

(+5.6%)
0FY200719, Maｙ , 2009

Overseas

Orders received for air separation
units from Korea and Vietnam.

Japan

Capital investment plans expected tobe slashed as economic downturn
becomes more severe, but overallsales holding steady thanks tocontribution of large-scale orders.

(-20.4%)15.4

10¥18.8 billion (plus 1.1% YoY)Japan

FY2008Overseas5

Major topics

19, Maｙ , 2009

Topics - Overseas

TNSC acquires largest independent
industrial gas distributor in United States- Purchase of Valley National Gases via
Matheson Tri-Gas –19, Maｙ , 20096

Outline of Valley National Gases LLC
Established 1958
Listed on NASDAQ in 1997
Largest independent distributor of industrial
gases in the U.S.
Headquartered in Cleveland, Ohio
Operates 95 business facilities in 18 U.S. states
941 employees

19, Maｙ , 2009

Through this acquisition, TNSC has acquired acomprehensive (production-through-delivery)
network covering the northeast United States.
Combined with our existing network in Florida,
this gives us a base from which to expand
operations over the whole East Coast.

Planned expansion across U.S. East Coast, made possibleby acquisition of Valley National Gases (VNG)

19, Maｙ , 2009

ASUs built up to 2008

MTG’s marketing area up to 2008

ASUs built/planned in 2009

New marketing areas thanks toacquisition of VNG

7

History of TNSC’s business development in the United States
1983: TNSC acquires 50% equity in Matheson Gas Products,Inc. (MGP),
with Amerigas acquiring remaining 50%
1989: MGP becomes wholly-owned subsidiary
1991: Acquired Semi-Gas Systems ,Inc.
1992: Acquired Tri-Gas, Inc.
1999: Matheson Gas Products, Inc. merged with Tri-Gas, Inc. to create
Matheson Tri-Gas, Inc.
2004: Six ASUs (formerly of Messer) purchased from Air Liquide
2006: Acquired major Midwest industrial gas producer Linweld in Aug.
2006: Purchased helium business from BOC in Sept.
2007: New large-scale ASUs go into operation in Southern California
2008: Acquired Five Star Gas & Gear of Southern California, and Aeris ofNorthern California
2009: Acquired Valley National Gases
Further scheduled developments in 2009
Two large-scale ASUs to be constructed in Iowa and Texas
19, Maｙ , 2009

Business developments in North America(Billions of yen)100

12.7%80
9.9%

60

14.0%
11.8%
10.4%

10.8%

10.4%

12.0%
10.0%
8.0%

7.2%

6.0%

40

4.0%
20

2.0%

00.0%
2003

2004
Sales

2005

2006

Operating income

2007
Operatingmargin2008

2009(Forecast)(Fiscal year)

19, Maｙ , 2009
Note: Compiled from figures for geographical segmentation in the Company’s
annual reports.

8Liquefied gas production capacity (oxygen, nitrogen, and argon)
China16,500㎥/h
Vietnam
3,500㎥/h

Japan
168,500㎥/h

Thailand
33,600㎥/h
Singapore
17,100㎥/h

19, Maｙ , 2009

Philippines
19,300㎥/h

U.S.A
157,000㎥/h

Japan
North America
Other Asia

FY2009168,500㎥/h
157,000㎥/h
90,000㎥/h

Ratio
40.5%
37.8%
21.7%

Total

415,500㎥/h

100%

Topics - Japan

Joint monosilane gas production
project launched with Evonik
Degussa Japan Co.,Ltd.

19, Maｙ , 20099Forecasts of world demand for monosilane
Sales volume for semiconductor applications

Sales volume for LCD applications

Sales volume for photovoltaic cell applications

Sales volume for photoreceptor DRAM applications

Sales value for semiconductor applications

Sales value for LCD applications

Sales value for photovoltaic cell applications

Sales value for photoreceptor DRAM applications

Total global sales value(Millions of yen)

Source: Outlook for Electronics Process Materials and Products Markets in 2008 (Fuji Keizai)

19, Maｙ , 2009

Outline of Evonik Industries

Evonik Degussa/Chemicals Division
No. 3 chemicals maker in Germany
Sales of ¥11,512 million euros per annum
31,728 employees

Evonik Steag/Energy Division
Evonik Immobilien/Real Estate Division

Evonik Degussa Japan, Co., Ltd.
Establishment: November 1969
Ownership:
Wholly owned by
Evonik Degussa
GmbHPaid-in capital: ¥498 millionSales:¥27,700 million for2008 (term to Dec.)
Employees:
120

Evonik Services/Other Businesses
Total sales for FY2008 amounted to ¥15,873 million euros
Number of employees = 40,767

19, Maｙ , 200910

Joint monosilane gas production project
LoansProduction

Equity stake: 100%

(Evonik MonosilaneJapan)

Purification, filling,and quality
management
Equity stake: 75%

19, Maｙ , 2009

(new joint venture)

Evonik Degussa Japan

Equity stake: 25%

Output to be marketed exclusively
by Taiyo Nippon Sanso Corporation

Topics - Japan

Reinforcement of MOCVD
equipment business

19, Maｙ , 200911

The expanding LED market(Billions of yen)
2,000
1,800
1,600
1,400
1,200
1,000800

Increase in LED
demandGeneral lighting

Growth in demand for MOCVD
equipment expected
Further market growth

Indoors: offices, homes, factories
Outdoors: lighting on streets andtunnels, and at sports grounds
Indoors: commercial premises(general illumination)
Outdoors: walkways, parks,
squares
Indoors: shops(spotlighting)Outdoors: architecturallighting, signs

Unique lighting
applications for LEDs

Backlights for large LCDs

Special-purpose
lighting

600
Street lamps
400
Backlights for small/mediumsized LCDs, car interior lighting

19, Maｙ , 2009

20072010

2015

2020

Source: Overview of LED Market Scale (total lighting market)/Roadmap for Development of White-Light LED Technology(Revised edition, April 2008; Association for Promotion of LED Lighting)Reinforcement of TNSC’s MOCVD equipment business

Acquired MOCVD operations ofNippon EMC (now under nameof Taiyo Nissan EMC) in 2007

World Market scale = approx.
¥25 billion in 2006
Others7%

AIXTRON

59%

TNSC

15%
Veeco 19%

Source: VLSI (2006)

Expanding product lineup
TNSC has 80-90% share ofJapanese market
19, Maｙ , 200912Lineup of MOCVD equipment models (GaN devices)
SR6000SR2000 SR4000
Substrate size: 2”×12”×3
Model:For R&D/production of
optical devices such aslaser devices, ultraviolet
devices, and high-outputdevices

Applications:

R&D

SR2000SR40002”

19, Maｙ , 2009

2”

2”

2”

6”×1
2”×6

2”×10
3”×8

For production of
For production ofelectronic/optical devices
optical devices such
such as LEDs, FETs andas LDs and LEDs
on-silicon devices

SR6000

6”

SR23K

SR23K
3”
3”
3”

3”

3”

3”
3”
3”

SR24K
6”×5
3”×12

For production ofelectronic devices
such as FETs andon-silicon devices

SR24K
6”
6”
6”

6”
6”

We plan to launch a new large-scale model (the UR25K)
with 4” x 11 and 3” x 15 wafer production capacity

The UR25K – state-of-the-art large-scale MOCVD equipment

19, Maｙ , 200913Topics - JapanTNSC starts talks with Koike Sanso
Kogyo on establishment of joint
development and production company

19, Maｙ , 2009

New company to be jointly set up in field of welding and cutting equipment

Nissan Tanaka

Koike Sanso Kogyo

Establishment of joint venture for the development
and production of welding/cutting equipment(scheduled for Oct. 1, 2009)
New company to leverage proprietarytechnology of both parent companies
19, Maｙ , 2009

Pursuit of further improvements indevelopment capability and competitiveness

14Fiscal 2009 consolidated
full-term forecasts

19, Maｙ , 2009

Fiscal 2009 consolidated full-term forecasts(Billions of yen)

FY2008FY2009(forecast)

ChangePercentagechange

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%

5.6%

16.5
3.3%

6.1%

24.6
5.5%

13.3
3.0%

19, Maｙ , 200915

Fiscal 2009 consolidated full-term forecasts
Gas business
Sales

350
300

(Billions of yen)

329.8
300.4(-8.9%)

Overseas

78.2

Overseas

78.3

250(+0.2%)

200
150

2520Japan

251.6

100Japan

15222.1

1020.222.4(-10.0%)(-11.7%)500

Operating income

50

FY2008FY2009 (forecast)

FY2008FY2009 (forecast)

19, Maｙ , 2009

Fiscal 2009 consolidated full-term forecasts
Machinery & equipment business
Sales

147.4

150

(Billions of yen)131.5(-10.8%)

Overseas

Operating income

38.6
Overseas

41.1

100

15(+6.3%)

10Japan

50108.8

Japan

90.4

511.5(-16.9%)00

FY2008FY2009 (forecast)

9.0(-22.3%)

FY2008FY2009(forecast)

19, Maｙ , 200916