Business Performance for FY2010(Year Ended March 2010)

May 18, 2010

Taiyo Nippon Sanso Corporation

Business Performance for FY2010 (consolidated)(Billions of yen)
Change fromforecast

FY2010(forecast)

FY2010(actual)YoY change

495.7

450.0

433.3

-62.4
-12.6%

-16.7
-3.7%

Operatingincome

29.1

27.4

27.5

-1.6
-5.5%

0.1
+0.6%

Recurringincome

27.9

-0.9
-3.2%

2.4
+10.0%

-0.8
-4.7%

2.4
+18.4%

FY2009Ratio to sales

Sales

Net income

5.9%

6.1%

24.6

5.6%

5.6%

16.5
3.3%

13.3
3.0%

6.4%

27.0
6.2%15.7
3.6%% change% change

1Breakdown by Segment

FY2010: Breakdown by segment (consolidated)
Gas business(Billions of yen)

Sales

400

Operating income

329.8
300

300.4

3022.4

Overseas

87.0

22.4

Overseas

79.8

20200

1000

Japan
242.8

Japan
220.6

FY2009FY2010100

FY2009FY20102

FY2010: Sales in gas business(Billions of yen)

Oxygen, Nitrogen, Argon
152.4
150
100

138.4

¥138.4 billion (down 9.2% YoY)
YoY)

30.7

27.1(-11.8%)

Overseas121.7

111.3(-8.5%)

Despite recovery momentum from in the middle ofthe term, overall demand pickup in North America
was limited.

JapanFY2009

FY2010Demand for on-site supply of gas to the steel,chemical, and electronics sectors rebounded, butbulk gas demand recovered only slightly.

500Japan

Overseas

Electronic Material Gases
80

62.5

53.8

¥53.8 billion (down 13.8% YoY)
YoY)

60
40
20034.3

Overseas

Despite demand recovery momentum led by North
America and Taiwan, sales were severely impacted
by the slump at the beginning of the term.

Japan

Demand from manufacturers of LCD devices andsemiconductors recovered. Supplies launched toplants of a large LCD panel manufacturer.

25.9(-24.6%)

28.2

27.9(-0.7%)

FY2009Japan

FY2010Overseas

FY2010: Breakdown by segment (consolidated)
Machinery & equipment business(Billions of yen)

Sales

147.4

Operating income

150
Overseas

29.7

113.9

15

11.5
Overseas

100

24.5

106.6
50

0

Japan
117.7

Japan
89.4

50

FY2009FY2010FY2009FY20103

FY2010: Sales in machinery & equipment business(Billions of yen)

Electronics-related equipment and installation
4036.0¥25.2 billion (down 30.0% YoY)
YoY)
25.2

4.2
3020

Sales were hit by delays and postponements
in capital investment plans at Taiwan customers.

JapanDespite steady progress in large-scale projects,
there was a fall in new investments.

2.1

31.8(-49.2%)
23.0

100Overseas(-27.4%)
FY2009FY2010Japan

Overseas

MOCVD equipment

3.3

4

2.5

3(+186.0%)

0.0
2¥3.3 billion (up 32.0% YoY)
YoY)

0.1

2.5

Overseas

More inquiries seen from South Korean,
Taiwanese and other customers.

JapanInquiries and robust orders for large massproduction systems for LED manufacturers

3.2(+29.8%)
10FY2009FY2010Japan

Overseas

FY2010: Sales in machinery & equipment business(Billions of yen)

Cutting and welding-related equipment
60

50.1

34.9
4021.8¥34.9 billion (down 30.4% YoY)
YoY)
Overseas

Recovery in North America was only moderate,and competition in China intensified.

17.8
20(-18.4%)

28.3

17.1
0

Japan(-39.6%)
FY2009Japan

Weak demand from public and construction projects,
with steep drop in capital investment at our customers.

FY2010Overseas

Air separation plants
20

18.8

14.3

2.4
15

¥14.3 billion (down 24.1% YoY)
YoY)
Overseas

Steady sales to South Korean customers

JapanSlowdown in new investment projects

2.7
1016.4(+12.6%)
11.6

50(-29.5%)
FY2009JapanFY2010

Overseas4

FY2010: Breakdown by segment (consolidated)
Housewares business and others(Billions of yen)

Sales
20

18.4
Overseas

0.7

18.9

Operating income

Overseas

0.7

4

3.4

153

2.2
10Japan
17.7

Japan
18.2

5021

FY2009FY2010

0FY2009

FY2010Highlights

5FY2010 Highlights (Overseas)
Acquisition of America's largest independent
industrial gas distributor, Valley NationalGases LLC
Launch of the Group's first medical oxygen
business, in Shanghai, China
Acquisition of Indian industrial gas distributor
K-Air Gases India Private Limited
Aggressive investment in the Philippines andVietnam, with plans to significantly increase
production capacity

FY2010 Highlights (Japan)
Launch of gas supplies to “Green Front Sakai” (Osaka)
Start of construction in joint monosilane gas production project withEvonik Degussa Japan
Launch of drive to expand sales of MOCVD equipment
Successful development of separation and transfer membranes forhigh orientation carbon nanotubes (CNTs)
More inquiries regarding Cryolibrary

Joint manufacturing project with Evonik Degussa

Overview of Sharp “Green Front” Sakai Plant

6

In Focus

Business Focus (1)Sales drive for MOCVD equipment
To respond to growing demand-side needs in Japan andoverseas, we have completed construction of further
demonstration models of large-scale UR-25K massproduction systems.

Global market scale for LED chips (including non-blue chips)
Market scale in 2008 stood at ¥560 bn, of which blue chips
accounted for more than ¥340 bn
In 2012, this is set to rise to over ¥800 bn, with blue chips
accounting for more than ¥600 bn(¥ billion)➣ Installation of demonstration models for new
mass-production systems during the year
➣ Expand sales in Japan and overseas markets

900800700600500

Volume increase offset
by lower unit prices

Rapid
growth incell phoneｓ
and digitaｌ
camerasHighervolumes
outpace
priceHigher unit drops
prices inlighting
products

400
2009 results
beat initial
forecasts

300
200
10002009
Forecast

2000

2012
Forecast(The Semiconductor Industry News)

Analysis
Systems

Aim to become global MOCVD equipment
manufacturer by FY2013

Design /Construction
RelatedFacilities(40% of sales overseas, worldwide share of 20%)
SpecialtyGasesMonitoring
Systems
MOCVD
Process
Technology

Gas-Related
Equipment

Taiyo Nippon Sanso proposes total solutions
for compound semiconductors.

7Business Focus (2)Biogas refining unit
We began shipments of a biogas refining unit in preparation for trials
starting in April 2009 to model a new business: supplying purified methanefor household use by combining biogas refining, transportation andstorage technologies.
First confirmed successful trial in Japan for a commercializedbiogas supply system for general household energy use

Biogas refiner for general household

Yamaga City Biomass Center

Biogas: A closed-loop system for the future
Piped supply of natural gas
General homes

Farms

Biogas refiner

Natural gas supplier

Addition of liquid petroleum
gas to 13A natural gas

Restaurants, school-meals suppliers, etc.

Garbage andwastewater

98%+ methane gas,equivalent to 12A

BiogasCarbon gas
Vehicle fuelSewage and waste treatment plant
Vegetable processing plant8

Business Focus (3)Successful development of dispersion agent and transfer membrane
for high orientation carbon nanotubes (CNTs)
High-orientation CNT dispersion agent

High-orientation CNT transfer membrane● Electrode materials for solar cells, fuel cells, and lithium-ion batteries, etc.
● Applications expected in displays (field emission materials, etc.)➣ Aiming for commercialization within three years
Detachment

Thickness:
100 – 150 μm

Formation ofdispersion agent

Solvent (example) only

Water + special
dispersion agent

17

This business is one of the announced successes of the Osaka Prefecture
Regional Cluster Type Collaborative Research Project.

Environment, Resources and Energy-Related Measures
LCD televisions
LED materials
Solar cells

Environment Resources
Hydrogen stations

MG shields
System for recovery/refiningof SF6
Combustion-type
gas scrubber

Carbon Nanotubes(CNTs)

Super-large energy-saving
air separation plant

EnergyBiogas-refining system
Smart grid materials
Power semiconductors

9Topics

TopicsAcquisition of Western International Gas & Cylinders Inc.,
North America's largest independent acetylene manufacturer
and wholesaler
Trade name: Western International Gas &Cylinders Inc.
Representative: Dan Hord III (CEO)
Location: Bellville, Texas
Date of establishment: 1985
Nature of business: Procurement,manufacture andmarketing of acetylene
Fiscal year-end: December
Number of employees: Approx. 290
Number of business locations: 15 in 10 USstates10Western International Gas & Cylinders Inc.:
Manufacturing plants and fill plants
Demand for Acetylene(1,000 tons)

4030
2010090 93 96 99 02 05 08 11 14
DemandininUS
US
DemandRaw materialmaterialfor
for US
USchemicalchemicalindustry
industry
Raw
DemandinJapan
Demand in Japan

Manufacturing plant
Procurement andfill plant* Estimates based on published materials of
various companies

Continued expansion and sales growth at US businesses
Manufacturing and fill plants for acetylene

Manufacturing plantRaw material sourcing
and fill plant

Manufacturing plant for liquified gas

NewsASU
Established air separationunits up to 2008
Newly built air separation
units as of 2009

1. Strengthen costcompetitiveness2. Create new demand

MTG’s marketing area up
to 2008
New marketing areas after
acquisition of VNG

Further raise profile in
US market

11FY2011 Consolidated Full-Term Forecasts

FY2011 consolidated full-term forecasts(Billions of yen)

FY2010(actual)

FY2011(forecast)

YoYchange% change

433.3

480.0

46.6

+10.8％

Operatingincome27.5

32.5

5.0+17.9％

Recurringincome27.0

3.5+12.7％

1.3

+7.9％

Sales

Net income

6.4%

6.2%

15.7
3.6%

6.8%

30.56.4%

17.03.5%

12FY2011 consolidated full-term forecasts
Gas business(Billions of yen)

Sales
400

300.4300
Overseas

Operating income

328.3

26.03022.4

Overseas

95.0

79.8

20200

1000Japan
220.6

Japan
233.3

FY2010FY2011
forecast

100

FY2010FY2011 forecast

FY2011 consolidated full-term forecasts
Machinery & equipment business(Billions of yen)

Sales

132.3

150

113.9
Overseas100500Overseas

Operating income

29.0
6.6

24.5

Japan
89.4

FY20108.610Japan103.35FY2011
forecast

0FY2010FY2011 forecast

13FY2011 consolidated full-term forecasts
Housewares business and others
Sales

20

18.9
Overseas0.7(Billions of yen)

19.4
Operating income

Overseas

0.74

3.4

2.9

15310Japan
18.2

Japan
18.7

5021

FY2010FY2011
forecast

0FY2010FY2011 forecast

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 andbeliefs 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, andinvestment decisions should not be made solely on the basis of theinformation provided herein.

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