TOKYO OHKA KOGYO CO., LTD.
Business Results― Fiscal Year ended December 2017―

Feb. 15, 2018TOKYO OHKA KOGYO CO., LTD.

© 2018 TOKYO OHKA KOGYO CO., LTD.

Contents

1. Consolidated Business Results for
FY2017 (2017.4-2017.3)

p.2

2. Consolidated Performance Forecasts for
FY2018 (2018.1-2018.12)

p.13

p.23
3. Topics- Initiatives under TOK Medium-Term Plan 2018 -© 2018 TOKYO OHKA KOGYO CO., LTD.

Consolidated Business Results for
FY2017(2017.4-2017.12)© 2018 TOKYO OHKA KOGYO CO., LTD.

Change in Fiscal Year-End03

 Detail of change in fiscal year-end

Current︓end of march ⇒ after︓End of December

 Explanation about earnings of FY2017/12
2016/12 Simulation
3Q
10-12

Fiscal year ended in March（TOK and domestic subsidiaries）
Fiscal year ended in December（Overseas subsidiaries）

4Q
1-3

1Q

1Q
4-6

2Q
7-9

1Q
2Q

3Q

2017/12

10-12

4Q
1-3

1Q
4-6

2Q
7-9

2Q

3Q

4Q

1Q

3Q

4Q

1Q

2Q

2018/12
3Q
10-12

1Q
1-3

2Q
4-6

3Q
7-9

10-12

4Q

2Q

3Q

1Q

2Q

3Q

4Q

3Q

4Q

1Q

2Q

3Q

4Q

Adjustment of October-December results for overseas businesses that were notconsolidated in the results for the former fiscal year ended December 2016.

 Explanation about earnings forecasts
3Q
10-12

4Q
1-3

Domestics
Overseas

1Q

1Q
4-6

2017/3
2Q
3Q
7-9
10-12

4Q
1-3

2017/12 Simulation
1Q
2Q
3Q
4-6
7-9 10-12

1Q
1-3

2018/12
2Q
3Q
4-6
7-9

4Q
10-12

1Q

2Q

3Q

4Q

1Q

2Q

3Q

1Q

2Q

3Q

4Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

Adjustment of January-March results for domestic businesses that were
not consolidated in the fiscal year ended December 2017.
© 2018 TOKYO OHKA KOGYO CO., LTD.

Summary

04（Millions of yen）

FY2017/12

FY2016/12
Simulation

Change%Net sales

80,761

92,411 +11,650+14.4

Operating income

9,310

9,194

(116)

(1.3)

Ordinary income

9,091

9,720

+629

+6.9

Profit attributable toowners of parent

5,485

6,007

+521

+9.5

Note: These are comparisons with the adjusted results for the fiscal year ended December, 2016 due to a change in fiscal
year-end. Please refer to slide 3 for details.

■Average exchange rate (US$)︓ ¥105.4／$（FY2016/12 Simulation）⇒¥110.7／$（FY2017/12)■Net sales︓Increased 14.4% as the first-half results maintained a trend toward profit growth,
centered on the Material Business■Operating income︓Exceeded the revised forecast of ¥8,700 million (announced October 26, 2017), but
decreased due to costs associated with a change in the fiscal year-end.
■Profit attributable to owners of parent︓Increased 9.5% due to improvements in foreign exchange gain orloss and smaller decrease in operating income.
© 2018 TOKYO OHKA KOGYO CO., LTD.

Non-operating Expenses or Income/Extraordinary Losses or Income

05（Millions of yen）

FY2016/12
Simulation

FY2017/12

(219)

526

+745

Interest and dividend income

+242

+309

+67

(Foreign exchange related
losses/gains)

(840)
(564)
(275)

(63)
+726
(789)

+776
+1,290(513)

Extraordinary losses or Income

104

(227)

(332)

Impairment loss

(45)

(242)

(196)

Loss on disaster

(91)

-

Loss on sales and retirement of
noncurrent assets

(26)

(169)

Non-operating Expenses or income

Foreign exchange (loss) gain
Loss(gain) on valuation of derivatives

YoY

+91
(142)

Note: These are comparisons with the adjusted results for the fiscal year ended December, 2016 due to a change in fiscal year-end.
Please refer to slide 3 for details.

© 2018 TOKYO OHKA KOGYO CO., LTD.

06

Results by Business Segment（Millions of yen）

FY2017/12

FY2016/12
Simulation
Net sales

Change%80,761

92,411+11,650+14.4

78,842

90,531+11,688+14.8

Electronic
functional materials

47,31851,230+3,911+8.3

High purity
chemicals

31,026

38,676+7,649

+24.7

496

623

+126

+25.5

1,918

1,880

(38)

(2.0)

9,310

9,194

(116)

(1.3)

12,44812,816

+367

+3.0

(333)

(664)

(330)

－

(2,804)(2957)(152)－

Material business

Other
Equipment business
Operating income
Material business
Equipment businessEliminations andcorporate

Note: These are comparisons with the adjusted results for the fiscal year ended December, 2016 due to a change infiscal year-end. Please refer to slide 3 for details.
© 2018 TOKYO OHKA KOGYO CO., LTD.

Breakdown of the Charge in Operating Income(Material Business)
FY2016 Simulation

v.s. FY2017 result

Impact of exchange rate changes
andDiscounted selling prices(¥0billions)Improvement inproduct mix＋¥3.7billions

07

Costs associatedwith change
in fiscal year-end(¥0.8)billions

Expenses increase(¥2.5billions)

¥12.4

¥12.8

FY2016
Simulation

FY2017
Resultbillions

billions¥0.4billions

Note: These are comparisons with the adjusted results for the fiscal year ended December, 2016 due
to a change in fiscal year-end. Please refer to slide 3 for details.
© 2018 TOKYO OHKA KOGYO CO., LTD.

Electronic Functional Materials Division

Sales Composition of Semiconductor
Photoresist by Region

Sales Composition of Electric
Function Materials by Type
Other
High-density
integration*

8%

g+i
16%

Semiconductor
Photoresist

Japan

19%

FY2016FY2016
North
Asia Full-year
America57%
result18%18% (2016.4-12) KrF
Simulation 22%
LCD
11% result
ArF
25%
Other
High-density
integration*

08

Semiconductor
Photoresist

8% g+i15%

18% FY2018(2018.1-12)

LCD Forecast
10%* High-density integration︓
ArF
Resist for Packaging,
MEMS Materials
25%

KrF
24%

6%

EuropeJapan

19%
FY2017
North
Asia Full-year America
59% result 16%
6%

EuropeNote: These are comparisons with the adjusted results for the fiscal year ended December, 2016 due to achange in fiscal year-end. Please refer to slide 3 for details.
© 2018 TOKYO OHKA KOGYO CO., LTD.

Equipment BusinessNet sales/Order backlog（millions of yen）

Net sales

2,000

1,500

Order backlog

1,321

1,226
1,090

998

1,000

884
654 667

529

500

0

09

2017/3 1H

2017/3 2H

2017/12 1H

2017/12 2H(Millions of yen）

2017/3
1H

2017/3
2H

2017/121H

2017/122H

Year-end orderbacklog

1,440

1,140

1,016

1,190

© 2018 TOKYO OHKA KOGYO CO., LTD.

Capital Investments/Depreciation/R&D

10（Million of yen , ％ ）FY2016/12
Simulation

2017/12C a p i t a l
Investm ents

8,469

6,731 △1,737△20.5

Depreciation

5,236

6,035

+798

+15.3

R

6,240

6,921

+680

+10.9

&

D

Change%Note: These are comparisons with the adjusted results for the fiscal year ended December, 2016 due to a change in fiscal yearend. Please refer to slide 3 for details.

© 2018 TOKYO OHKA KOGYO CO., LTD.

Balance Sheets

11（Million of yen）

As of
December30, 2017

Current Assets

vs March 31,
201787,719(928)

Cash and deposits

44,181(5,481)

Notes and accounts
receivable

22,554+2,660Inventories

15,893+2,28051,703+2,037490(150)

Investments and other assets

38,768+3,230Current Liabilities

21,742+2,206

10,444

+837

3,421

+1,396

Total net asset

153,517+585

Total asset

178,681+4,188Property, plant and equipment
Intangible assets

Notes and accounts payable
Long-Term Liabilities

Buildings and structures +2,345
Machinery(1,520)Furniture and fixtures
+204
Land
+144
Construction in progress +863

Retained earnings+3,195
Treasury stock(7,646)
Unrealized gain on available-for-sale securities+2,199Foreign currencytranslation adjustments+1,112© 2018 TOKYO OHKA KOGYO CO., LTD.

12

Cash Flows（Millions of yen）
FY2017/12
Cash flows from operating activities+10,162

Income before income taxes andminority interests+9,492

Depreciation+6,035Decrease (increase) in trade notes
and accounts receivable(2,286)

Decrease (increase) in inventories(1,929)Decrease (increase) in trade notes
and accounts payable+755

Increase (decrease) in advances
received(100)

Income taxes paid

(2,286)

Cash flows from investing activities(5,993)

Cash flows from financing activities(10,673)

Translation adjustments
Net increase (decrease) in cash andcash equivalents+557(5,945)Major breakdown
Purchases of property,
plant and equipment(5,884)
Major breakdown
Proceeds from sale of Treasury stock+173
Purchases of treasury stock(7,823)
Dividends paid
(2,785)(incl. minority shareholders)© 2018 TOKYO OHKA KOGYO CO., LTD.

Consolidated Performance Forecasts for
FY2018(2018.1-12)© 2018 TOKYO OHKA KOGYO CO., LTD.

14

Earnings Forecasts (Full-year)（Millions of yen）

FY2017/12(2017.1-12)
Simulation result
Net sales

FY2018 (2018.1-12) Forecast
Change%100,422108,900+8,477+8.4

Operating income

9,878

11,000+1,121+11.4

Ordinary income

10,534

11,400+865+8.2

Profit attributable toowners of parent

6,885

7,500

+614

+8.9

Note: These are comparisons with the adjusted results for the fiscal year ended December, 2016 due to a change in fiscal year-end.
Please refer to slide 3 for details.

■Exchange rate assumptions（US$）︓ ¥111.1／$（2017/12 Simulation）⇒¥108.0／$（2018/12）■Net sales :The growth of the Material Business and expansion of the Equipment Business will contribute toan 8.4% increase year on year.
■Operating in come :Improvement in gain or loss is forecast in the Equipment Business, but the yearon-year increase will stop at 11.4% due mainly to the impact of rising raw materials costsin the Material Business.
■Profit attributable to owners of parent :Will increase in conjunction with increasing operating income,rising 8.9% year on year.
© 2018 TOKYO OHKA KOGYO CO., LTD.

15

Performance Forecasts by Business Segment（Millions of yen）
FY2017/12(2017.1-12)
Simulation result
Net sales

Change%100,422108,900+8,477+8.4

98,247102,100+3,852+3.9

Electronic functional
materials

56,94758,500+1,552+2.7

High purity chemicals

41,16543,500+2,334

+5.7

2,174

6,800

+4,625+212.7

9,878

11,000+1,121+11.4

Material business

14,86814,600

(268)

(1.8)

Equipment business(1,073)200+1,273-Eliminations and corporate(3,917)(3,800)+117-

Material business

Equipment business *1
Operating income*1:

FY2018 (2018.1-12) Forecast

Net sales of the Equipment Business are the figures after elimination of inter-segment sales.

Note: These are comparisons with the adjusted results for the fiscal year ended December, 2016 due to a change in fiscal yearend. Please refer to slide 3 for details.

© 2018 TOKYO OHKA KOGYO CO., LTD.

Capital Investments/Depreciation/R&D

16(Millions of yen)
FY2017/12(2017.1-12)
Simulation result

FY2018 (2018.1-12) Forecast
Change%CapitalInvestments

7,633

6,400 (1,233)

Depreciation

6,917

7,400

+482

+7.0

R&D

8,888

8,900

+11

+0.1

(16.2)

Note: These are comparisons with the adjusted results for the fiscal year ended December, 2016 due to a change in fiscal year-end.
Please refer to slide 3 for details.

© 2018 TOKYO OHKA KOGYO CO., LTD.

Breakdown of the Charge in Operating Income(Material Business)

17

FY2017(2017.1-12) Simulation Result v.s.
FY2018 (2018.1-12) Forecast
Impact ofsales increases, etc＋¥3.5billions¥14.9

Costs associatedwith change
in fiscal year-end+¥0.8billions

Expenses increase(¥2.8)billions

Impact of
Exchange rate changes
anddiscounted selling prices(¥1.8)billions¥14.6

billions

billions

FY2017 (2017.1-12)
Simulation result(¥0.3)billions

FY2018(2018.1-12)
Forecast

Note: These are comparisons with the adjusted results for the fiscal year ended December, 2016 due to a change infiscal year-end. Please refer to slide 3 for details.
© 2018 TOKYO OHKA KOGYO CO., LTD.

18

Sales Breakdown of Material Business（Forecast）
Net sales（Millions of yen）

50,00040,00047,38586

50,86247

49,500100

52,600022,20021,536

21,30027,66929,277

28,10030,4002017/12 1H

2017/12 2H

2018/12 1H

2018/12 2H

Simulation

Simulation

19,62930,00020,00010,0000Electronic Functional materials

High purity chemicals

Other

Note: These are comparisons with the adjusted results for the fiscal year ended December, 2017 due to a change
in fiscal year-end. Please refer to slide 3 for details.
© 2018 TOKYO OHKA KOGYO CO., LTD.

Electronic Functional Materials Division
Sales Composition of Electric
Functional Materials by Type
Other
High-density
integration*

17%

8%

g+i
16%

Sales Composition of Semiconductor
Photoresist by Region

Semiconductor
Photoresist

Japan

FY2017(2017.1-12)

LCD Simulation
11% result
ArF
24%

FY2017

KrF
24%

Asia

58%

Semiconductor
Photoresist
Other

High-density
integration*

9%

g+i
16%

FY201816%
KrF(2018.1-12)* High-density integration︓
LCD Forecast 26%
Resist for Packaging,
10%
MEMS Materials

ArF
23%

19

23%

(2017.1-12)
Simulation
resultNorth
America

14%5%EuropeJapan

25%

FY2018Asia (2018.1-12)
55% Forecast North
America

15%
5%EuropeNote: These are comparisons with the adjusted results for the fiscal year ended December, 2017 due to a change
in fiscal year-end. Please refer to slide 3 for details.
© 2018 TOKYO OHKA KOGYO CO., LTD.

Initiatives in
TOK Medium-Term Plan 2018

© 2018 TOKYO OHKA KOGYO CO., LTD.

TOK Medium-term Plan 2018︓Outline

21

The 3-year period that holds the key to achieving the
FY2020 target
Point①︓Continue proactive investment for profit growth
Point②︓Aim for new record profit in the final year, operating income target of ¥15 billion
Point③︓ROE target over 7%, Enhance returns to shareholders with emphasis on dividends⇒ FY2020 Aim to realize solid financial position and ROE of over 8%Strategy①︓Reform of business portfolio
 Promote business renewal and Develop new business domains

Strategy②︓Evolve strategy of building a close relationships
 Transition to harvest stage
 To realize growth strategy by demonstrating its technological capavilities

Strategy③︓Develop global personnel
Strategy④︓Strengthen our management foundation© 2018 TOKYO OHKA KOGYO CO., LTD.

22

TOK mid-term Plan2018︓Achievement status of target value（Millions of yen）

最終年度の伸びが不十分、目標との乖離を埋められず
2016/32017/3 Result
2018/12Mid-term Plan
ResultNet sales(1st term)

Forecast (3rd term) Target (3rd term)

89,96988,764

108,900

120,000

Material business

87,28086,558102,100

110,000

Equipment business

2,689

2,205

6,800

10,000Operating income

12,4389,954

11,00015,000Material business

16,203

14,47014,60017,000Equipment business

△ 423

△ 750

200

1,700

△ 3,342△ 3,764△ 3,800△ 3,700

7,716

6,343

7,500

10,000

119.3

107.1

108.0

105.0

Sales Breakdown of Material businessElectronic functional materials
51,134
Hign purity chemicals
35,931
Other
214

53,07433,475958,50043,500100

68,00037,0005,000

Eliminations & Corporate
Profit attributable toowners of parent
Exchange (yen/$)（注）Note: There is no 9-month report for the fiscal year ended December, 2017, the second year of the Medium-Term Plan,
due to a change in fiscal year-end. The final year of the TOK Medium-Term Plan 2018 was changed from the fiscal year
ending March 2019 to the fiscal year ending December 2018.
© 2018 TOKYO OHKA KOGYO CO., LTD.

Sales target progress（FY2018 Forceast Base）
Business/
Products

Outlook

ArF Resist

Unachieved A major customer did not adopt (Asia)
 Delay in major customersʼ production plans (Asia,USA）

achieved

 Adoption for 3D-NAND (Japan・Asia)
 Increased demand due to expansion of 3D-NAND mass
production (Japan,Asia）

achieved

 A major customer adopted for FO-WLP (Semiconductor field)
 Customers in Japan and overseas adopted and expanded
uses (electronic components field）
 Price decreased due to growing demand (Asia)
 Customers decreased production in their lines (Japan,USA)High purity
chemicals

achieved

 A major customer expanded adoption on next-generation
production line (Asia)
 Adoption of and increased demand for new Clean Solution(Asia,USA)

Equipment
business

Ubachieved Delayed expansion of 3D packaging process market

Newbusiness

Ubachieved Delay in commercializing focused themes (highfunctional films and NIL, etc.)

KrF Resist
High-density
integrationmaterials

23

・・・ Main factor© 2018 TOKYO OHKA KOGYO CO., LTD.

Future Priority Activities

24

Business/
Products

Future Outlook

Future Initiatives

ArF Resist

 Sales increase due to operation of
next-generation production line
(Asia,USA) Recovery of our market share for
DRAM (Asia)

KrF

 Continued adoption for nextgeneration 3D-NAND (Japan,Asia)

 Adoption for Next Generation 3DNAND (Asia）

High-density
integrationmaterials

 Expand production lines that use
Micro Bump (Asia) Acquire new customers inconjunction with expanded uses
（electronic components field)

High purity
chemicals Continued adoption of Clean Solution
 Adoption of and increased demandon next-generation production line
for Clean Solution on next-generation(Asia,USA)
production line (Asia,USA)

Equipment
business Develop TSV equipment into a nextgeneration memory production (Asia)

 Develop further application of TSV
equipment (Asia）（Fan Out Panel Level Package）

New
business At the dawn of an era of sales
expansion of high-functional films

 Create new businesses utilizing the
New R&D Building at the Sagami
Operation Center Start of operation of nextgeneration production line willcontribute to sales (Asia,USA)

 Adoption for next generation
process (Asia, USA)

EUV

© 2018 TOKYO OHKA KOGYO CO., LTD.

Capital Policy
Shareholder returns through dividends
 continuously distributing dividends witha consolidated dividend payout ratio ofabove 40%
Cash dividends
applicable to the year（yen)60

64Dividend payout ratio(Consolidated)30.5%
2015/372（Forecast）
※

64

64
（Plan）

43.8%

46.3%

36.1%
2016/32017/32017/1240.0%
2018/12※Effictively means a dividend increase due to the
9 month accounting period.

25
From a long-term viewpoint, flexibly
purchase treasury stock as return toshareholders
Purchase of treasury stock <November 7, 2017>□ Number of stocks to be purchased:
2.5 million shares(maximum limit)
Equivalent to 5.73% of the total shares issued(exscluding treasury stock as of Oct. 31, 2017)□ Total purchase cost︓
10 billion yen (maximum limit)□ Purchase period︓From November 8, 2017
through April 27, 2018

TOK will continue to pursue an optimal balance between
investment, cash reserves, and shareholder returns© 2018 TOKYO OHKA KOGYO CO., LTD.

ROE results and outlook
5.8%

ROE
Profit attributableto owners of parent（¥100 million）

Mid-term plan
ROE target
over 7%6.2%

54
2013/3Mid-term Plan
Target ¥10 billion

5.3%

4.5%

4.4%

75

2014/388

2015/326

77

2016/363
2017/3

Over
5%
5.1%

75

2018/12
Forecast

Concept of ROE improvement (TOK Midium-Term Plan 2018）
 “TOK Midium-Term Plan 2018” is positioned as an upfront investment
period for growth⇒ROE target : over 7% Achieve targets based on profit growth Aim to realize over 8% in FY2020

Note: There is no 9-month report for the fiscal year ended December, 2017, the second year of the MediumTerm Plan, due to a change in fiscal year-end. The final year of the TOK Medium-Term Plan 2018 waschanged from the fiscal year ending March 2019 to the fiscal year ending December 2018.
© 2018 TOKYO OHKA KOGYO CO., LTD.

＜Reference＞TOK Medium-term plan progressfor each products
 ArF Photoresist

Approx.
1.5 times

FY2016
Sales=100

16/3

17/3

17/12
18/12
Mid-term
Simulation Forecast
Plan
Target KrF Photoresist
FY2016
Sales=100

16/3

17/3

Approx.
1.4 times

17/12
18/12
Mid-term
Simulation Forecast
Plan
Target High-density integration

27

Approx.
1.5 times

FY2016
Sales=100

16/3

17/3

17/12
18/12
Mid-term
Simulation Forecast
Plan
Target High purity chemicals
FY2016
Sales=100

16/3

17/3

Approx.
1.1 times

17/12
18/12
Mid-term
Simulation Forecast
Plan
Target© 2018 TOKYO OHKA KOGYO CO., LTD.

http://www.tok.co.jp/（Note）
This presentation material contains forward-looking statements that
describe future prospects of TOKYO OHKA KOGYO CO., LTD. (theCompany) in terms of business planning, earnings and management
strategies. Such statements are based on managementʼs judgment,
derived from information available to it at the time such information was
prepared. Readers are cautioned not to rely solely on these forwardlooking statements, as actual results and strategies may differ
substantially according to changes in the Companyʼs businessenvironment.

© 2018 TOKYO OHKA KOGYO CO., LTD.