Emerging ontoa Still Wider Stage
Consolidated Business Performancefor the First Half of the FYE2018
November 6, 2017

Contents
Business Performance for the First Half of the FYE2018
Overview of business performance for the first halfBusiness performance by segment

Full-Year Forecasts for FYE2018
Overview of forecasts for the full-year
Forecasts by segment

Initiatives to Achieve the Medium-term Management Plan
Total Electronics

Business Overview
Global expansion of the Thermos businessBusiness Performancefor the First Half of the FYE2018

Ortus Stage 23

Overview of business performance(Billions of yen)
FYE2017 Q2

FYE2018 Q2Results (IFRS)Results (IFRS)

MarginRevenue
Core operating
income268.7

Margin305.7

YoY

FYE2018 Q2
Announced% changetargets (IFRS)

+37.0

300.0

Margin+13.7%

25.7

29.3

9.6%

9.6%

+3.6

26.8

+13.8%

8.9%

Non-recurring profit and loss

0.1

0.2

+0.1

0.5

Operating income

25.9

29.6

+3.7

27.3

Net income attributable to16.4

owners of the parent

9.7%

6.1%

9.7%

17.6
5.7%

+14.1%+1.2

9.1%

15.9+7.3%

Impact of foreign currency translations (US$→¥): FYE2017 Q2 rate: $1=¥105.39 FYE2018 Q2 rate: $1=¥111.29→ Currency translations had a positive impact of ¥5.7 billion on revenue and ¥0.4 billion on core operating income
45.3%

4

Business performance by segment(Billions of yen)

Gas

Revenue

FYE2017 Q2

FYE2018 Q2Results (IFRS)Results (IFRS)

152.4

157.4

14.1

14.3

Business inJapan

Segment
incomeRevenueGas
Business inthe U.S.

Segment
income

65.1
4.7

84.3
6.4

YoY

Factor% change+5.0➢Electronics-related: Electronic materials gases trended favorably+0.2➢Higher costs in line with rising crude oil prices➢Revisions to carbon dioxide gas prices+3.3% ➢Higher LPG sales price following an increase in the import price

+1.0%

+19.2

➢Electronics-related: Electronic materials gases trended favorably➢Recognition of business acquired from Air Liquide contributed \13.2 bn➢Carbon dioxide gas and dry ice performed strongly+29.5% ➢Impact of foreign currency translation: +\3.7 bn+1.7+35.4%➢Recognition of business acquired from Air Liquide contributed \1.6 bn➢Higher revenue from carbon dioxide gas and dry ice contributed to increased
segment income➢Impact of foreign currency translation: +\0.3 bn➢Contribution from the acquisition of Supagas Holdings Pty Ltd (Australia): \5.4 bn

Revenue

Gas

37.7

49.5

Asia &Segment
incomeThermosRevenue

2.5

4.8

➢Taiwan: Solid sales of gas and from equipment and installation

Segment
income+2.3➢Contribution from the acquisition of Supagas Holdings Pty Ltd (Australia): \1.0 bn➢Singapore and Malaysia: Segment income decreased in line with lower revenue➢Taiwan: Solid sales of gas and from equipment and installation+87.8% ➢Impact of foreign currency translation: +\0.2 bn

13.414.3

5.04.6and Otherbusinesses➢Singapore and Malaysia: Soft sales of hard goods to the oil & gas sector+31.2% ➢Impact of foreign currency translation: +\2.0 bnBusiness inOceania+11.8+0.9➢Japan: Sales increased, centered on Vacuum Insulated Mobile Mugs

+6.4%

-0.4-8.1%➢Japan: Firm segment income in line with higher sales➢Overseas: Soft business performance by Group companies accounted for by theequity method* Segment income: Numerical value calculated by excluding profits and losses (nonrecurring items) produced
by nonrecurring factors from operating income.
55

Full-Year Forecasts for FYE2018

Ortus Stage 26

Full-Year Forecasts for FYE2018(Billions of yen)
FYE2017

FYE2018

Results (IFRS)Forecasts (IFRS)

MarginMargin% change

Revenue

581.5

Core operating income

54.7

Non-recurring profit and loss

-1.0

0.5

1.5

Operating income

53.6

57.0

+3.4

Net income attributable toowners of the parent

620.0

YoY

+38.5
+6.6%

56.5

9.4%

9.2%

34.7
6.0%

9.1%

9.2%

34.5
5.6%

+1.8
+3.2%

+6.2%

-0.2
-0.7%

77

Forecasts by segment(Billions of yen)
FYE2017 Results

FYE2018 Forecast(IFRS)(IFRS)
Announced Nov. 1

Gas Businessin Japan

Revenue
Segment
incomeGas Businessin the U.S.

Revenue
Segment
incomeGas Businessin Asia &Oceania
Thermos andOtherbusinesses

Revenue
Segment
incomeRevenue
Segment
income

321.4

338.0

29.4

28.7

147.2

164.0

12.0

13.5

85.8

91.0

5.1

7.8

27.0

27.0

10.0

9.0

YoY

FYE2018 Forecast(IFRS)% change

+16.6
+5.2%

-0.7
-2.5%

+16.8
+11.4%+1.5+11.8%

+5.2
+6.0%

+2.7
+51.0%

0.0-0.1%-1.0-10.2%* Segment income: Numerical value calculated by excluding profits and losses (nonrecurring items)
producedby nonrecurring factors from operating income.
8Announced May 10

338.0
28.5
166.0
13.8
89.0
7.2
27.0
9.0
8

Initiatives to Achieve the Medium-termManagement Plan
Total Electronics

Ortus Stage 2

9Medium-term Management Plan Ortus Stage 2
Strategic Policy
Basic policies
Strengthening
foundations

Key重点戦略
strategies
1. Structural reform

2. Innovation

Safety, Quality andCompliance

Maximizing group
power by augmenting
collaboration

Driving innovation by harnessing
external resources and IoT

Accelerating R&D

Strengthen collaboration in the sales
and marketing functions

R&D innovation

Integration of engineering functions

Sales approaches innovation

Strategy

Integration of production & logistics

Strengthening

Promotion of shared services

Engineering innovation
Production & logistics innovation

Corporate Functions

Growthstrategies

Domestic Gas
Business Expansion

Globalization

3. Globalization

4. M&A

Enhancing governance

Striving for the sustained growthof the Company and accelerating
growth through M&As

Strengthen the function of the GlobalOperations
Strengthen the function of regional
holding companiesGrowth strategy

Expand business areas
Total Electronics

10

Expand business territory and reinforce
operational density
Acquire new products, technologies
and supply chains
Expand medical business1010

Total Electronics
・Established the “Total Electronics” function with the aim of more flexibly addressing theglobalization of overseas semiconductor manufacturers and technology and market trends
Trends in strategic accounts

Geographic location of the Company’s strategic
accounts in East Asia

The market has been growing at an extremely rapid
pace owing to the globalization of the production
configurations of semiconductor manufacturers.

Current status of the Company
In the Company’s electronics business, businesses andresources are spread out across various regions, andare managed by each Group company.
Electronic materials gases are a global product and offer
prospects for growth through the network built up in
the course of globalizing the industrial gas business.

Established “Total Electronics” function
Supply higher value-added products and services by
establishing the “Total Electronics” function

11

The Company conducts cross-border business
transactions with global semiconductor
manufacturers.

11

Total Electronics
・Established the “Total Electronics” function at the Shanghai base of Taiyo Nippon Sanso (China)
Investment Co., Ltd., a regional holding company in China, one of the world’s largest markets interms of semiconductor demand. The “Total Electronics” function will address increasing demand forelectronic materials gas in the Asian region by upgrading and expanding the following five functions.
1. Strategic Account Management (SAM)
Strengthen the Group’s internal collaboration targetingstrategic accounts
Promote a unified strategy covering procurement, productionand R&D by sharing information about strategic accounts5. Operations

2. Products Management

Strengthen the supply configuration globally (upgrade andPromote a stable supply of products to strategic accounts

expand the production capabilities of existing plants andthrough capital investmentbuild new plants)

Enhance the product lineup (in terms of quality and cost)

4. R&D Management

3. Supply Chain Management

Develop products based on customer needs

Build an efficient supply system

Address customers’ requirements on the process by

Provide a stable supply of a wide range of products byenhancing collaboration at R&D bases

implementing global sourcing (optimize purchasing)1212

Total Electronics
・Strive to enhance customer satisfaction by developing electronic materials gases, ensuring
stable quality and reducing cost, and providing stable supplies, as required by the global
electronics market

Operation

R&D Management
R&D Policy

Expand plants and build new plants

Research

Expand plant at Japan Fine
Products (JFP) in Japan

Enhance the lineup of etching gases (COS, CH3F,Implemented in April 2017etc.), where the Group excels

Investment: ¥0.2 billion

Purification of COS

Conduct research focused precursor (liquidchemical), which offer prospects for growth indemandDevelopment
Ensure stable quality by enhancing cylinder
treatment, purification and analysis technologies
Promote technological development based oncustomer requests obtained by strengthening
network functions

Expand plant at Matheson Gas
Products Korea Co., Ltd.
(MGPK) in South Korea
Scheduled to start commercial
production in January 2018
Synthesis and purification of B2H6
and CH3F
Investment: USD 45 million

Build new plant in China
Scheduled to start commercial
production in January 2019
Synthesis and purification of B2H6,CH3F and mixing of SiH4, Si2H6
Investment: USD 30 million＊Supplemental information on molecular formulas
COS: Carbonyl sulfide; B2H6: Diborane; CH3F: Monofluoromethane; SiH4: Silane; Si2H6: Disilane
1313

Total Electronics
・Expand the electronics business centered on Asia, with the aim of establishing a leading
position in the global electronics market

FY2017

FY2020Electronic materials gas sales

Targeting rapid growth from 2020

¥57.0
¥47.0
billiononward through the effects of capitalbillion16％

17％

investment in China and South Korea
and R&D-driven materials development

Global market share(company projection)

Secure a solid position in the growing market
for electronic materials gases
1414

Business Overview

Global expansion of
the Thermos business
Ortus Stage 215

Global expansion of the Thermos business・Enhance the brand value of Thermos through regional strategies, with the aim ofincreasing market share based on regional sales (sales volume) around the world

East Asia

EuropeNorth America

Expand product categories(cooking equipment and home cooking
appliances other than vacuum bottles)

Build a stronger brand

Proactively develop products

Expand and build deeper saleschannels(together with the alfi brand)(products made of plastic, glass, andother materials)

Expand sales channels

Broaden and enhance product areas

Southeast Asia

Japan

Establish the brand

Build an even stronger brandEstablish sales channels

Expand product categories

Create markets(cooking equipment and baby goods
other than vacuum bottles)

Net Salesby Region(forecast for 2017)
地域別売上高（2017年見込）
200mn

230mn

270mn

30mn

Japan

Asia

Europe andAmericas

OtherUSD

16

USD

USD

USD

16Global expansion of the Thermos business・Acquired Brands Home & Leisure Holdings Ltd. (BHL), a UK retailer, and Lifefactory, Inc., aU.S. manufacturer of glass beverage containers, in order to augment the existing networkwith upgraded and expanded sales channels and product lineups

UK retailer
NameBrands Home ＆ LeisureHoldings Ltd.

Name

Lifefactory, Inc.

Sales

Net sales GBP 16.8
million (2016)

Sales

Net sales USD 16.7
million (2016)

Main
business
17

U.S. manufacturer of glass
beverage containers

Sale of Thermos
products and other items

Main
business

Manufacture and sale ofglass beverage containers

17Thank you for your attention.

Ortus Stage 2Reminders
The information contained here is not disclosure information for securities
trading. The accuracy and completeness of this information are not guaranteed.
The briefing session and this material describe future plans and strategies, aswell as forecasts and outlooks of business performance. These plans andstrategies, as well as forecasts and outlooks, are made by Taiyo Nippon Sanso
based on its judgments and estimations made in accordance with theinformation available at present. Actual performance will be subject to changes
caused by a variety of risks and uncertainties (such as economic trends, market
demand, exchange rates, taxation systems and various other systems andinstitutions, but not limited to them).
We wish to remind you, therefore, that the actual business performance may
differ from the forecasts and outlooks made at this time. Please refrain frommaking investment judgments based solely on this information.