Medium-Term Plan 2018
（From April 1, 2016 to March 31, 2019）-Challenge for the Future！
！-May 11, 2016

Contents
TOK Medium-Term Plan 2015
Outlook for Next Medium-Term Plan
Review of TOK Medium-Term Plan 2015
TOK Medium-Term Plan 2018
Outline/Earnings Targets
Company-wide strategy
ROE/Return to Shareholders
11. TOK Medium-Term Plan 2015/
Next Medium-Term PlanTOK Midium-Term Plan 2015
CAGR:+16.5％％

Operating income（Billions of yen）

TOK Midium-Term Plan 2018
CAGR:+6.8％％

Fiscal Year 2021
Target200
175150125100

Global financial
crisisUrgentbusinessprofitabilityStructural reforms

TargetAchieved 150
recordrecord-highprofits

Lean corporate
structure2007513250
25009/3

3△ 1310/36161

11/3

12/3

78

100

13/3

14/3

△ 25150
12477

15/3

16/3

FY2017Buget

FY2019TargetFY2021
TargetAchieved record-high profits, but growth faltered in the final year, missing the target
Outlook for Next Medium-Term Plan
(TOK Medium-Term Plan 2018)

Despite profit decline forecast in the first year,
aim for new record profit in the final year2

2. Review of TOK Medium-Term Plan 2015
Sales Target Achievement of Mainstay Products
Surpassed(⇗⇗）
Almost achieved（⇔ ）Unachieved（（⇘ ）（Note）Size of diagram does not reflect the sales volume.
Electronic functional materials

High purity chemicals
ArF
LCD materials

KrFg＋＋iHigh-density integration materials

New business / New material⇗ High purity chemicals
Succeeded in differentiation based on development and sales
expansion of high-quality grade tailored to customer’s processes.
⇔ ArF：：Driven by North American sales⇔ KrF：： Contribution from double-digit annual growth in Asia
⇔ g+i ：Secured positive growth⇔ High-density integration materialsSucceeded in sales expansion among major OSAT manufacturers
and developing new customers.
⇘ LCD materials：：Change in industry environment, no progress on
new adoption⇘ New business / New material
Renewable energy (photovoltaic related): Did not progress
as expected, lackluster performance
Rechargeable battery: Rechargeable microbatteries, etc.:
Not commercialized⇘ Equipment business：：Delay in market startup

Equipment business2016/3（Millions of yen））
TargetNet sales

Results

99,00089,96988,00087,28062,30051,13425,50035,931200

214

11,0002,689

15,00012,438Material business

16,80016,203Equipment business

1,500

△423

△3,300△3,342

Material businessElectronic functionalmaterials
High purity chemicals
Other
Equipment business
Operating income

Eliminations and corporate33. TOK Medium-Term Plan 2018 Outline/Earnings Targets
Growth strategies to reverse a first-year profit decline, aiming for record-high profits（Millions of yen）

2016/3

Net sales

2019/3

ChangeCAGR

89,969120,000+30,030+10.1％

87,280110,000+22,719+8.0％

Electronic functional Materials

51,13468,000+16,865+10.0％High purity chemicals

35,93137,000+1,068+1.0％

214

5,000+4,785

2,689

10,000+7,310+58.2％

12,43815,000+2,561+6.8％

Material business

16,20317,000+796+1.6%

Equipment business△423

1,700+2,123－△3,342△3,700△357－

Ordinary income

12,68415,000+2,315+5.7%

Profit attributable to Owners parent

7,176

10,000+2,283+9.0%

Exchange rate（US$/yen）

119.3

105.0

△14.3

Material business

Other
Equipment business
Operating income

Eliminations and corporate（Millions of yen）

2011/3～～13/3

TOK Medium-Term Plan 2015

TOK Medium-Term Plan 2018（2014/3～～16/3））（2017/3～～19/3））－－Change

Capital investments

10,19527,77434,000+6,226

D e p r e c i a t i o n

12,19012,581

22,000+9,419

R

18,72920,30824,000+3,691&D4

4-1. TOK Medium-Term Plan 2018 Company-wide strategy
As an R&D-driven company, focus on high added value to establish presence
Renew mainstay products
ArF Increasing demand for 1Xnm generation, win customers adopting
10nm or less
KrF Increase adoption of thick-film photoresists for 3D-NAND
High-density integration materials
New/advanced processing applications (e.g. FO-WLP)
MEMS materials
Display materials High value-added materials for advanced process
High purity chemicals Introduce new Clean Solution

Promote business renewal
Develop new businessdomains(Open Innovation, etc.)

New Business/New Materials
Commercialize focus themes (functional films, NIL, etc.)
Develop promising themes
Accelerate creation of new themes ⇒ established
Corporate Venturing Div.

Versatile applicationsof the products
CMOS image sensor applications
Electronic components application
Power device application

54-2. TOK Medium-Term Plan 2018 Company-wide strategy
Evolution of strategy of building a close relationship with customers

Transition from structurestructure-building to harvesting stage
CHANG CHUN TOK (CHANGSHU)
CO., LTD. (CHINA)TOKYO OHKA KOGYOAMERICA, INC. (U.S.A.)TOK EUROPE B.V.
(NETHERLAND)

Shanghai Representative Office
Singapre Office
TOK TAIWAN CO., LTD(TAIWAN））

R&D・R&D・Plant・Plant・Sales
Plant
Sales
TOK ADVANCED MATERIALS
CO., LTD(KOREA)

Demonstrate technological capabilities and realize growth targets based onlong-term relationships of trust with customers

ArF：Increase
market share ＋KrF（（Further increase market share by 3D-NAND application as a pillar））
High-density integration materials (Expand newly developed products)
High Purity Chemicals (Capture needs for higher quality products)
Chinese marker (Strengthen customer support structure)6

4-3. TOK Medium-Term Plan 2018 Company-wide strategy
Focus on three equipment fields and strengthen sales
based on three approaches
Coating machine for LCD

Next-generation OLED
Display manufacturing equipment

UV curing machines

Approach to prototype
development line
⇒OLED display
Approach to the new applications/new line

TSV equipment field
Spin Coaterfor thick film

Zero Newton
Bonding machines
Zero Newton
Deboneing machines

Approach to Foundry/OSAT⇒Utilization of TSV technology

Developingmachines forthick film

～2013/3:3 equipments field:repair・・remodel
TOK Medium-Term Plan 2018
TOK Medium-Term Plan 2015）（From April 1, 2013 to March 31, 2016) （From April 1, 2016 to March 31, 2019）

FY2021～～7

5-1. ROE

FY2021

Approach to improving ROE
TOK Medium-Term Plan 2018（From April 1, 2016 to March 31, 2019）
2019）：Period of upfront investment for growth⇒ROE target (FY2019) : over 7% Achieve targets based on profit
growthAim to realize over 8% in FY2021
85-2. Returns to Shareholders
Enhance returns to shareholders with emphasis on dividends
64（Forecast））

Dividend per share (¥(¥)
64（Plan））

60
Annual dividends
per share →

52
38

32

30

36.2%

Dividend payout →ratio (Consolidated)(Consolidated)

YearYear-end →

52.7%

30.9%

24

28

32

35.8%

（Plan）Plan） （Forecast）
Forecast）

Dividend policy (FY2017 onwards)
Considering the current level ofdividends, continuously distributedividends with a consolidated dividend
payout ratio of over 40%(* Lift consolidated dividend payout ratio
guideline from over 30% to over 40%)

30.5%
Purchase of treasury stock

Interim →20
2013/3Operatingincome（億円）

7824

2014/31003032

32

Implement flexibly from a long-term
perspective（Forecast）
Forecast）

2015/3132

2016/3＊124

2017/3

2019/3（Plan）（Target）

77

150*FY2016: Including 4 yen of commemorative dividend for 75th anniversary in FY2016

9http://www.tok.co.jp/(Note)
This presentation material contains forward-looking statements that describe future prospects ofTOKYO OHKA KOGYO CO., LTD. (the Company) in terms of business planning, earnings andmanagement strategies. Such statements are based on management’s judgement, derived frominformation available to it at the time such information was prepared. Readers are cautioned not to rely
solely on these forward-looking statements, as actual results and strategies may differ substantiallyaccording to changes in the Company’s business environment.