Consolidated Business Performancefor the Full-Year of the Fiscal YearEnding March 2015 (Fiscal 2015)
May 12, 2014TAIYO NIPPON SANSO Corporation
1

Contents
1. Consolidated Business Performancefor the Full-Year of FY2015
2. Segment Report
3. Topics
4. Consolidated Full-Year Forecasts for
FY2016
5. Medium-Term Management Plan: State ofProgress
2

Contents
1. Consolidated Business Performancefor the Full-Year of FY2015
2. Segment Report
3. Topics
4. Consolidated Full-Year Forecasts for
FY2016
5. Medium-Term Management Plan: State ofProgress3

Consolidated Business Performance for the Full-Year of FY2015(Billions of yen)

FY2014
Margin(Announced
targets)

FY2015(Results)

YoY
ChangeFY2015
MarginMargin% change

Sales

522.7

550.0

559.3

+36.6

Operating
Income

31.4

35.0

35.2

+3.8

Ordinary
Income

30.5

33.2

34.2

+3.7

Net
Income

20.1

20.0

20.7

+0.5

6.0％

5.8％

3.9％

6.4％

6.0％

3.6％

6.3％

6.1％

3.7％

+7.0％

+12.1％+12.2％+2.8％

Achieved initial forecast, and sales and earnings increased year on year
Non-operating profit and loss was greater than expected and net income
increased4

Analysis of Year-on-Year Change（１）【Sales】(Billions of yen)

550.0
530.0
510.0
490.0

Including foreign exchange impact of
+14.7

522.7

（Gas Business in the US +10.0
Gas Business in Asia +4.5
Other Businesses +0.2 ）

470.0
450.0

FY2014

Gas Business

Gas Business

Gas Businessin Japanin the US

in Asia

Other

Slight increase in Japan due to late demand recovery
Steady growth in USA and Asia
5

559.3

FY2015

Analysis of Year-on-Year Change（２）【Operating Income】(Billions of yen)

35.0
33.0
Including foreign exchange impact of
+0.8

31.0
29.0

（Gas Business in the US +0.5
Gas Business in Asia +0.3
Other Businesses +0.1）

35.2

35.2

Eliminations

FY2015

31.4

27.0
25.0

FY2014

Gas Business

Gas Business

Gas Businessin Japanin the US

in Asia

Other

Domestic business profit increased due to effects of structural reforms
Steady growth in USA, Asia, and other businesses
6Analysis of Year-on-Year Change（３）【Ordinary Income 】【Net Income】

40.0

24.0

35.0

22.0

30.0

20.0

25.0
20.0

34.2

30.5

18.0
16.0
14.0

15.0
10.0

20.7

20.1

12.0
FY2014

Operating
IncomeEquity in
Otherearnings ofaffiliates

FY2015Higher investment return fromequity method of thermos-relatedcompanies

10.0

FY2014

Ordinary
IncomeExtraordinary Income
FY2015Gaintaxes, etc.
and Loss

Extraordinary gain (billions of yen )（FY2014: 7.5 → FY2015: 2.5 ）Extraordinary loss
（FY2014:3.7

7(Billions of yen)(billions of yen )→ FY2015: 2.3 ）Other Financial Results for the Full Year of FY2015(Billions of yen)Mar.2014 Mar.2015

Total assets
Shareholders’ equity
Net interest-bearing debt

Net D/E ratio(Billions of yen)

Capital expenditure
Investment and loan
Depreciation and amortization(Amortization of goodwill)

R&D expenses
FCF (investing activities)

8

731.6
274.3
219.7
0.80

Change

782.3
317.2
212.8
0.67

+50.7
+42.9
(6.9)
(0.13)

Mar.2014 Mar.2015

Change

32.5
35.7
37.1
3.6
3.1
1.4

35.2
5.7
40.5
4.9
3.4
28.0

+2.7
(30.0)
+3.4
+1.3
+0.3
+26.6

Substantial increase
due to foreign currencytranslation effects
Net D/E ratio improved
due to shareholders’equity increase,
reduction of interestbearing debt and otherfactors
Carried out major
mergers andacquisitions (M&As) in
previous fiscal year
including Continental
Carbonic Products, Inc.
FCF increased year on
year due to a decreasein large investments andloans

Contents
1. Consolidated Business Performancefor the Full-Year of FY2015
2. Segment Report
3. Topics
4. Consolidated Full-Year Forecasts for
FY2016
5. Medium-Term Management Plan: State ofProgress
9Segment Information: Breakdown of Sales and Operating Income【Sales】(Billions of yen)

FY2014FY2015％ change

Gas Business in Japan

341.8

344.6

+0.8%

Gas Business in the US

107.5

130.9

+21.8%

Gas Business in Asia

54.3

61.9

+14.1%

Other

19.0

21.7

+14.5%

Sales Total

522.7

559.3

+7.0%

【Operating Income】(Billions of yen)

FY2014FY2015％ change

Gas Business in Japan

23.3

25.0

+7.2%

Gas Business in the US

4.7

5.7

+22.9%

Gas Business in Asia

1.9

2.4

+29.1%

Other

3.0

3.4

+12.2%

Eliminations or corporate

-1.5

-1.4

+7.6%

Operating Incom Tatal

31.4

35.2

+12.1%

10【Sales】

2014 20152014 20152014 20152014 2015

Gas Business

Gas Business

Gas Business

Other

in Japanin the US

in Asia【Operating Income】

2014 20152014 20152014 20152014 2015

Gas Business

Gas Business

Gas Business

Other

in Japanin the US

in Asia

Gas Business in Japan【Sales】(Billions of yen)
FY2014

Industrial
Gas

Factors

Bulk/On-site

131.5

134.0

+2.0% ➢On-site demand from steel industry was strong

Package/Hard goods

32.4

34.0

Plants and Equipment

38.0

39.2

+5.0% ➢Welding-related equipment was brisk

Medical

21.9

24.4

+11.2% ➢New consolidation effects and stable isotope

223.9

231.8

+3.5%

50.5

51.5

+1.8% ➢Electronics materials gases were brisk

22.7

21.9

73.3

73.4

-3.7% ➢Absence of large orders for equipment installation

40.8
3.6

36.0
3.2

and MOCVD systems in the previous fiscal year
-11.8% ➢Linked to oil prices, LPG prices declined
-9.8%

44.5

39.3

-11.6%

341.8

344.6

+0.8%

Total
Gases
Electronics Equipment and Installation
Total
EnergyFY2015 ％ change

Gases
Equipment
Total

Gas business in Japan Total+3.2% ➢Plant sales increased in Q4
business was strong

0.1%【Operating Income】
FY2014
Gas business in Japan Total

11

23.3

(Billions of yen)
FY2015 ％ change
25.0

+7.2%

Factors➢Earnings increased due to rationalization andhigher sales of electronics materials gases

Gas Business in the US【Sales】(Billions of yen)
FY2014

Industrial
Gas

Factors

Bulk/On-site

26.4

41.3

+56.4% ➢Newly consolidated carbon dioxide sales company

Package/Hard goods

74.9

83.8

+11.8%

101.4

125.2

+23.4% ➢General gas, acetylene, and LP gas were brisk

4.4

4.3

-0.9%

1.6

1.4

-14.5%

6.0

5.7

-4.6%

107.5

130.9

+21.8%

Total
Gases
Electronics

FY2015 ％ change

Equipment andInstallation

Total
Gas Business in the US Total

Contribution of Continental Carbonics Products,
Inc.

➢Positive impact of \10.0 billion due to foreign
currency translation【Operating Income】
FY2014(Billions of yen)
FY2015 ％ change

Factors➢In addition to foreign currency translation effects
Gas Business in the US Total

4.7

5.7

+22.9% (+\0.5 billion), new consolidations recorded
operating income exceeding amortization of goodwill

12Gas Business in Asia

【Sales】(Billions of yen)
FY2014FY2015 ％ change

Factors

Bulk/On-site

15.3

15.6

+1.6% ◆In addition to acquisition effects, existing

Industrial Package/Hard goods

11.3

13.4

+18.3%

Plants and Equipment

8.6

8.5

-1.1%

Total

35.3

37.6

+6.3%

17.1

22.3

+30.1%

1.7

2.0+14.6% ◆Strong in Taiwan, China, and South Korea

18.9

24.3

+28.6%

54.3

61.9+14.1%

Gas

Gases
Electronics

Equipment andInstallation

Total
Gas Business in Asia Total

business of Leeden National Oxygen Ltd.
(LeedenNOX) of Singapore was solid➢Positive effects of +\4.5 billion due to foreign
currency translations【Operating Income】
FY2014(Billions of yen)
FY2015 ％ change

Factors➢In addition to foreign currency translation effects
Gas Business in Asia Total

1.9

2.4

+29.1%(+\0.3 billion), large profit effect due to electronics
business13

Other Businesses【Sales】(Billions of yen)
FY2014Japan
Thermos Asia
Total
Other
Other Business Total

FY2015 ％ change

Factors

14.2

16.1

+12.8% ◆Thermos Business

2.2

3.0

+37.3%

16.4

19.1+16.1% ・Overseas, sales were strong, mainly in South Korea

2.5

2.6

+3.7%

19.0

21.7

+14.5%・In Japan, in addition to brisk sales of new
products, there was inbound demand【Operating Income】
FY2014
Other business Total

14

3.0

(Billions of yen)
FY2015 ％ change
3.4+12.2%

Factors◆Thermos Business
Earnings increase resulting from sales increaseBreakdown of Segment Sales and Operating Income【Sales】(Billions of yen)

FY2014FY2015％ change

Industrial Gas

360.8

394.6

+9.4%

Electronics

98.3

103.6

+5.3%

Energy44.5

39.3-11.6%

Other

19.0

21.7

+14.5%

Sales Total

522.7

559.3

+7.0%

【Operating Income】

2014(Billions of yen)

FY2014FY2015％ change

Industrial Gas

22.6

23.9

+5.6%

Electronics

5.2

7.2

+36.6%

Energy

1.6

1.7

+6.1%

Other

3.0

3.4

+12.2%

Eliminations or

-1.1

-1.0

+10.6%

31.4

35.2+12.1%

corporate
Operating Income
Total

15

【Sales】

2015

Industrial

2014

2015

Electronics

2014

2015

Energy

2014

2015

Other

Gas

【Operating Income】

2014

2015

Industrial
Gas

2014

2015

Electronics

2014

2015

Energy

2014

2015

Other

Contents
1. Consolidated Business Performancefor the Full-Year of FY2015
2. Segment Report
3. Topics
4. Consolidated Full-Year Forecasts for
FY2016
5. Medium-Term Management Plan: State ofProgress
16Topics【Japan】◆Strengthen SI commercial product development capabilities◆Commenced sales of Cryo Library Advance【Overseas】◆Expansion of USA Business◆Expansion of Philippines Business17

Strengthen SI commercial product development capabilities
Build new SI Innovation Center and strengthen new product and new
application R&D system for SI (stable isotope) including water -18O
Overview
Name: SI Innovation Center
Location: Tama City, Tokyo
Completion: April 2015
New production and new application development
Function:(application of isotopes, etc.)
Manufacture of developed products (biochemicalcomposition, etc.)
Quality control, refinement and improvement, andtechnical support of developed products

Strengthen position of SI as a major company

SI business sales targets: ¥3.0 billion (FY2017)18

Cryo Library AdvanceCommence sales of Cryo Library Advance, a new cryopreservation
system for cells
Comparison of Cryo Library Advance and Existing Model

External dimensions(mm)Preservation
method/temperature

Developed machines(Advance)

Existing Model(CAPS-3000)

W1200*D1235*H1970

W1150*D1320*H2190-150℃ and less(vapor phase liquid nitrogen storage)

Number of
specimens thatcan be stored

CAPS-A16000X
16,128 vials (1cc vials)
CAPS-A10000X
10,368 vials (2cc vials)

3,128 vials (2cc vials)

Amount of liquid
nitrogen evaporation(vessel unit)

5L/day10L/day

Temperature
maintenance during
power outage

More than 20 days

Approximately 5 days

Cryo Library Advance

Sales target for entire cryopreservation system: ¥1.5 billion (FY2017)19

Expand The US Business１

M&A in California and Hawaii
生産能力 ： 3,600トン/日
Acquired California distributor in growth market
稼働時期
as a part of ：our2018年
supply network expansion
ルイジアナ州レイクチャールズ市
strategy
Acquired 18th ASU in United States andexpanded business bases into 43 states withacquisition of the Hawaii business of Air Liquide２

Large pipeline to Sasol
Supply of piped gas to large-scale ethane
生産能力： 3,600トン/日
cracker project and supply of liquefied gas to
稼働時期
2018年
surrounding：area
Supplystarts: 2018
ルイジアナ州レイクチャールズ市
Production capacity: 3,600 tons/day(approximately 100,000Nm3/h)
Legend：Corporate
headquarters：Existing plant：New plant

California：Filling station/
Distribution facility：City：New facility

Louisiana
Los
Angeles

Hawaii
LakeCharles20

Expansion of Philippines business (1)Completion of new plant that is our 3rd on Luzon Island(and our 4th in the Philippines)【Plant Overview】
Plant location: Clark Special Economic Zone
Production capacity:
Liquefied oxygen 3,000Nm3/h
Liquefied nitrogen 7,000Nm3/h
Liquefied argon
120Nm3/hStartup: April 2015

Luzon

LegendPhilippine
headquartersBAGUIO

Existing plant
Newly operating
plant

Clark

MANILA

New plantscheduled forconstruction

Southern partof Manila

The plant is positioned as a strategic basein the northern part of Luzon Island, amarket of future growth potential
Cagayan De Oro

Mindanao21

Expansion of Philippines business (2)Successive orders for new projects against a backdrop of overwhelming
backup capacity
１

For solar panel manufacturers

Supplied to: Foreign-affiliated solar panel
manufacturers
Supply method: Nitrogen gas piped in fromnew plant
Supply start date: July 2016 (planned)

２ For electronic part manufacturers
Supplied to: Foreign-affiliated electronic partmanufacturers
Supply method: Nitrogen gas supplied bypipeline from new plant
Supply start date: August 2016 (planned)

Southern part of Luzon Island (near Manila)

Clark

LegendPhilippine
headquarters
Existing plant
Newly operating plant

MANILA

New plantscheduled forconstruction

Philippines business sales(Billions of yen)

7.0
6.5
6.0
5.5
5.0
4.5

TanauanSan Jose

4.0
3.5
3.0

22

Expect annual
average growth rateof 10% or more
FY2015FY2016FY2017FY2018

Expansion of Philippines business (3)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 yen

Plant nameLocation

Production items

Thermos (China)
Housewares

Kunshan,Jiangsu,
China

A wide range of
products

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

23【Artist’s rendering of new plant】

Contents
1. Consolidated Business Performancefor the Full-Year of FY2015
2. Segment Report
3. Topics
4. Consolidated Full-Year Forecasts for
FY2016
5. Medium-Term Management Plan: State ofProgress
24

Consolidated Forecasts for FY2016
Gas Business in Japan
Industrial gases market is expected to recover slowly
Aim to expand sales of new commercial products including hydrogen stations
Continuously improve earnings through structural reforms

Gas Business in the US
Study building of new plants in areas where vigorous growth is expected
Expand sales network for carbon dioxide and acetylene business into westernregionGas Business in Asia
Anticipate improved earnings due to emerging benefits of structural reforms
implemented in China and the Philippines
Obtain new demand in growth markets

Other
In thermos business, despite rising unit purchase prices due to weak yen, seek toexpand new product sales

25Consolidated Full-Year Forecasts for FY2016(Billions of yen)

FY2015(Results)
MarginSales

FY2016

forecast
MarginYoY
Change％ change

559.3

650.0

+90.6

Operating
Income

35.2

41.0

+5.7

Ordinary
Income34.2

Net Income

20.7

6.3％

6.1％

3.7％

39.3
24.0

6.3％

6.0％

3.7％

+16.2％+16.2％+5.0+14.6％+3.2+15.6％

Effects of +¥50.0 billion net sales and +¥3.0 billion in operating income
as a result of change in the ends of their fiscal years of Matheson TriGas, Inc. (United States) and Leeden National Oxygen Ltd. (Asia)
26

Full-Year Forecasts for FY2016【Sales】【Sales】(Billions of yen)

FY2015FY2016 ％ change

Gas Business in Japan

344.6

346.0

+0.4%

Gas Business in the US*

130.9

195.0

+48.9%

Gas business in Asia *

61.9

86.0

+38.7%

Other

21.7

23.0

+5.7%

Sales Total

559.3

650.0

+16.2%【Operating Income】
FY2015(Billions of yen)2015 20162015 20162015 2016

Gas Business

Gas Business

Gas Business

Other

in Japanin the US

in Asia2015 20162015 20162015 20162015 2016

Gas Business

Gas Business

Gas Business

Other

in Japanin the US

in Asia

FY2016 ％ change【Operating Income】

Gas Business in Japan

25.0

25.0

+0.0%

Gas Business in the US*

5.7

9.7

+67.4%

Gas business in Asia *

2.4

4.6

+86.3%

Other

3.4

3.1

-9.8%

Eliminations or corporate

-1.4

-1.4

+3.4%

Operaing Income Total

35.2

41.0

+16.2%

27

2015 2016* Matheson Tri-Gas, Inc. (United States) and Leeden
National Oxygen Ltd. (Asia) will be recorded results for a
15-month period due to changes in fiscal-year ends

Contents
1. Consolidated Business Performancefor the Full-Year of FY2015
2. Segment Report
3. Topics
4. Consolidated Full-Year Forecasts for
FY2016
5. Medium-Term Management Plan: State ofProgress
28

Medium-Term Management Plan: State of Progress (1)Initial fiscal year of Medium-Term Management Plan progressing largely
as planned

Ortus Stage 1(Billions of yen)

Sales
(Difference versus

FY2014FY2015FY2016FY2017(Results)(Results)(forecast)(plan)

559.3

650.0

600.0

522.7

initial plan)

Operating Income(Difference versus

31.4

initial plan)（+9.3）（+80.0）

35.2

41.0

（+0.2）（+3.0）

（+0）

45.0
（+0）

Operating Margin

6.0%

6.3%

6.3%

7.5%

Overseas Sales Ratio

31.4%

35.0%

43.8%

40.0%

ROCE

6.2%

6.2%

6.8%

8.0%

Achieved fiscal 2015 net sales and operating income estimate
Excluding the effects (+¥50.0 billion in fiscal 2016 sales and +¥3.0 billion in operating
income) of changes in fiscal-year ends of the two subsidiaries, net sales will exceed initial
target and operating income will achieve initial target.
Anticipate achieving fiscal 2017 targets due to aggressive investment in growth markets
and pursuit of structural reforms
29Medium-Term Management Plan: State of Progress (2)【Breakdown of change in operating income by segment】(Billions of Yen)
25.0
25.0

25.0

0.1
1.6

9.7

Effects of change in

10.0

business-year ends

2.2

Other

23.3

Growth strategy

23.3

4.7
1.9
Gas

Gas

Gas

Business

Business

Business

in Japanin the US

in Asia

4.7

3.0

Other

5.7
1.1

Structural reforms

5.0
0.0
-1.0

1.8

23.3

3.4
2.4 0.4

0.5
0.1
1.9

Gas

Gas

Gas

Business

Business

Business

in Japanin the US

in Asia

4.6

0.8
4.7

3.0
▲ 0.2
Other

2.8

1.7
0.2
1.9

Gas

Gas

Gas

Business

Business

Business

in Japanin the US

in Asia

3.1
0.1
3.0

Other

FY2014(Result)

FY2015(Result)

FY2016(forecast)Eliminations

-1.5

-1.4

-1.4

Total

31.4

35.2

41.0

30

Structural reforms
Implement early retirement at Taiyo Nippon Sanso in FY2015
Continue to reduce personnel expenses and strengthen the supply
chain in FY2016(Billions of yen)

Measures and policies

2015

2016

(Results)(Forecast)

Reduce domestic personnel expenses

1.2

1.3

Strengthen supply chains

0.3

0.4

Rationalize other domestic businesses

0.1

0.1

Rationalize overseas businesses

0.1

0.2

1.7

2.0

Total
* All figures are changes from FY2014

31

Amount of earnings
improvement

Innovation【Promotion of New Business】
Commercial
product

Progress

Hydrogen Station
Business

FY2014: 3 orders; FY2015: 9 orders received⇒Aim for a market share of 30% centered on mobile hydrogen stations

Water-18O

Completed Shunan No. 3 Plant in April 2015; product shipments scheduled foraround autumn (increase annual production from 300kg to 600kg)⇒Expand business through dominant supply system and cost competitiveness

MOCVD Equipment

Deliver to Sandia National Laboratories (USA) and Epistar Corporation (Taiwan)⇒Further reinforce global expansion

Other new commercial
products

Cryo Library Advance, high-purity steamer (RASIRC), etc.

【 Collaboration with Mitsubishi Chemical Holdings 】

32

Theme

Initiatives

Gas solutions business

Collaborate with each business company in electronics, R&D, and gas applications

Health care solution
business

Collaborate in the area of regenerative medicine with Life Science Institute, Inc.,
Mitsubishi Tanabe Pharma Corporation, Mitsubishi Chemical Corporation, and otherorganizations.

Globalization/M&A (１)Search for opportunities for M&A including areas we have not yet
entered, and aggressively invest in ASU

Germany
November 2014

Acquired the Alfi brand oftable-top insulated
containers to develop
business in Europe

United States(California)
February 2015

Acquired Sims Welding
Supply, a company thatsells industrial gases andwelding equipment inSouthern California

United States(Louisiana)

Received a contract order
for a large pipeline for an
ethane cracker project for
Sasol(Supply starts 2018)

Philippines (southernpart of Luzon Island)

Built an insulated container
manufacturing plant toincrease our stainless steel
bottle supply capacity by30(Manufacturing starts
November 2015)

Indonesia (Java)33

Two contracts for pipelines toJapanese-affiliated firms were
unofficially announced(Supply
starts November 2016 andJanuary 2017)

United States (Hawaii)
February 2015

Acquired industrial gas
business in Hawaii

Philippines (southern partof Luzon Island)
Received pipeline contract
orders for two projects(Supply
starts July and August 2016)

Globalization/M&A (2)【Overseas sales】(Billions of yen)

300.0

Asia
250.0

200.0

39.1%

Overseas Sales Ratio
23.6%

40.0%

35.0%

the US

22.8%

45.0%
40.0%
35.0%

31.4%

30.0%

27.6%

24.3%

25.0%

150.0
20.0%
100.0

15.0%
10.0%

50.0
5.0%
0.0

FY2010FY2011FY2012FY2013

FY2014FY2015* Calculated by excluding the effects of changes in fiscal-year end
in FY2016 at U.S. and Asian subsidiaries

34

FY2016FY2017(Forecast) (Forecast)

0.0%

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 (estimatesand forecasts) regarding the future plans, strategies, activities andperformance of Taiyo Nippon Sanso Corporation. Forward-looking
statements reflect management’s assumptions and beliefs based on
information available as of the time of writing. Actual results reflect avariety of risk and uncertainties. These risks and uncertainties include, but
are not limited to, changes in general economic and specific market
conditions, currency exchange rate fluctuations, tax systems, andregulations.
●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.

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