TOKYO OHKA KOGYO CO., LTD.
Business Results― The 1st Half of Fiscal Yearending March 2016―

November 6, 2015

Contents
1. Consolidated Business Results forthe 1st Half of FY2016

p.2

2. Consolidated Performance Forecasts for p.12
FY2016
3. Topics－Accelerate Strategic Investments －p.19

1

Consolidated Business Results
for the 1st Half of FY2016

Summary(Millions of yen)

FY2015/1H

FY2016/1H
Change%Net sales

42,05744,805+2,747+6.5

Operating income

6,707

7,271+563+8.4

Ordinary income

7,080

7,441+361+5.1

Profit attributable toowners of parent

4,895

4,898+3+0.1

Average exchange rate (US$): ¥102.2/$ (FY2014/1H) ⇒ ¥120.8/$ (FY2015/1H)
Net Sales: Although the year on year growth rate in the Material Businesshas declined in the second quarter compared to three months earlier, kept
growth due to the sales expansion in the three core products, i.e. ArF, KrF,
and high-density integration materials.
Operating Income: Amid increased depreciation, growth exceeded the initial
forecast (on May 8, 2015) due to higher sales in the Material Business.
3Non-operating Expenses or Income/Extraordinary Losses or Income(Millions of yen)

FY2015/1H FY2016/1H

YoY

372

170(201)

543
121
313
26413
157－
84(129)+36(313)
+58

170－
161－

242
57－
85+71+57(161)+85

Extraordinary losses or income584(57)(642)

Extraordinary income

622

2(619)

622－

(622)

3760

+22

15
22

51
8+36(22)

Non-operating expenses or income
Non-operating income
Interest and dividend income
Foreign exchange gains
Share of profit of entities accounted for using
equity method

Non-operating expenses
Loss on valuation of derivativesNew plant related expenses
Operating preparation expenses

Gain on revision of retirement benefit plan

Extraordinary losses
Impairment loss
Other4

Results by Business Segment(Millions of yen)

FY2015/1H
Net sales

FY2016/1H
Change%42,05744,805+2,747+6.5

40,557

43,835+3,277+8.1

Electronic functional materials

24,12725,420+1,292+5.4

High purity chemicals

16,30418,309+2,004+12.3

125

105

(19)

(15.6)

1,499

969(529)(35.3)

6,707

7,271+563+8.4

Material Business

8,406

9,026+619+7.4

Equipment Business(188)

(139)

+49

－

(1,510)(1,615)(105)－Material Business

OtherEquipment Business
Operating income

Eliminations and corporate(Note) Net sales of the Equipment Business are the figures after elimination of inter-segment sales.

5Breakdown of the Change in Operating Income(Material Business)
1st half of FY2015 result vs 1st half of FY2016 resultExpenses increase(¥2.1 billion)

Impact of sales
increases/decreases,etc.

+¥1.3 billion¥8.4billion

1st half ofFY2015
ResultImpact ofexchange rate changes ¥9.0
anddiscounted selling prices billion+ ¥1.4 billion＋¥0.6 billion

1st half ofFY2016
Result6Sales Breakdown of Material Business
Net Sales(Millions of yen)

21,051

25,00019,50620,00015,00036

21,804

22,24821,987

21,848(267)89115(9)

9,198

9,341

9,268

9,041

89
7,812

8,492

10,0005,000

11,604

12,523

12,873

12,817

12,603

12,817FY2015/Q1

FY2015/Q2

FY2015/Q3

FY2015/Q4

FY2016/Q1

FY2016/Q2

0Electronic functional materials

High purity chemicals

Other

7

(Reference)

Electronic Functional Materials Division
Sales Composition of Electronic Functional Materials by Type
Other

Other
High-densityintegration

g+i17%

11%
9%

LCD
19%

FY2015
1st half
resultHigh-density
integration

KrF
21%

g+i18%

10%
11%

FY2016
LCD 1st half
13% result

KrF
22%

ArF
26%

ArF
23%

(Note) High-density integration:
Photoresist materials,
MEMS materials

Sales Composition of Semiconductor Photoresist by Region
JapanJapan

21%

19%

FY2015
1st half
result
60%
Asia

Asia
North America

14%5%Europe58%

FY2016
1st half
resultNorth America

18%
5%Europe8Equipment BusinessNet sales/Order backlog(Millions of yen)

1,975

2,000

1,870

1,629
1,500

1,499
1,210
969

1,000Netsales
Orderbacklog

5000(Millions of yen)
Term-endorder backlog

FY2015/1H

FY2015/2H

FY2016/1H

FY2015/1H

FY2015/2H

FY2016/1H

1,180

1,072

1,440

(Note) The net sales of the equipment business is the figure after elimination of inter-segment sales.

9Balance Sheets(Millions of yen)

As ofSeptember
30,
2015

vs March 31,
2015

86,558(4,495)50,282
18,682
12,382(3,684)(739)+826

49,038

(333)

889

(44)

Investments and other assets

33,047(455)

Current liabilities

16,802(2,492)

7,326(2,471)

Current assets
Cash and deposits
Notes and accounts receivable
Inventories
Property, plant and equipment
Intangible assets

Notes and accounts payable

Buildings and structures+3,055
Machinery and equipment(551)
Tools, furniture and fixtures +1,032
Construction in progress(3,924)Retained earnings
Treasury stock(575)(2,098)

3,216

(352)

Total net assets

149,514(2,484)

Valuation difference on
available-for-sale securities(610)

Total assets

169,534(5,329)Foreign currencytranslation adjustments+401

Non-current liabilities

10Cash Flows(Millions of yen)

FY2014/1H FY2015/1H
Cash flows from operating activities+7,447+5,774+7,665+1,661+7,384+2,685+52(0)(1,670)+674+954(790)+2,406(2,624)

(688)

+457

(2,120)(2,480)Cash flows from investing activities(4,537)(3,093)

Cash flows from financing activities(809)(7,633)

Translation adjustments
Net increase (decrease) in cash andcash equivalents

(333)

+223

+1,767(4,729)

Income before income taxes andminority interests
Depreciation
Increase (decrease) in allowance for
doubtful accountsDecrease (increase) in trade notes andaccounts receivable
Decrease (increase) in inventories
Decrease (increase) in trade notes andaccounts payable
Increase (decrease) in advances
received
Income taxes paid

Major breakdown:
Purchase of property, plant and equipment(1,893)Major breakdown:
Cash dividends paid
(1,347)
Other (acquisition of treasury stock, etc.)(6,285)11

Consolidated Performance
Forecasts for FY2016

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

FY2015Results

FY2016 Forecasts
Change%Net sales

88,08692,800+4,713+5.4

Operating income

13,253

13,300+46+0.4

Ordinary income

14,443

13,200(1,243)(8.6)

Profit attributable toowners of parent

8,818

8,600(218)(2.5)

Exchange rate assumptions (US$): ¥109.3/$ (FY2015) ⇒ ¥115.0/$ (FY2016/2H)
Net sales: Revised downward from up 9.8% to up 5.4% year on year, considering
the first-half results, slowdowns and uncertainties in the semiconductor and LCD
markets.
Operating income: Expected to decline in the second-half, but the full-year
forecast is unchanged considering the first-half results.
Ordinary income: Expected to decline due to a backlash of foreign exchange
gains in the previous year.

13Capital Investments/Depreciation/R&D
Capital Investments/Depreciation

R&D cost(Millions of yen)

(Millions of yen)

14,577

15,00010,00012,500
8,000

7,500
6,903

10,000

6,211

7,100

6,389

6,000
7,276

7,500

6,800
5,900

5,332
4,276

5,000
3,758

5,500 4,000

4,200

2,672

2,000

2,500

00
FY2013

FY2014

Capital Investments

FY2015

Depreciation

FY2016FY2016

Initialforecast

Revisedforecast

FY2013 FY2014 FY2015 FY2016 FY2016
Initial Revised
forecast forecast

14Performance Forecasts by Business Segment(Millions of yen)

Net sales

FY2015FY2016 Full-year forecasts

Full-year results

Change%88,08692,800+4,713+5.4

84,611

88,600+3,988+4.7

Electronic functional
materials

49,81851,500+1,681+3.4

High purity chemicals

34,84436,800+1,955+5.6

Equipment Business

3,475

4,200+724+20.8

Operating income

13,253

13,300+46+0.4

Material Business

16,355

16,500+144+0.920200(3,122)(3,400)Material Business

Equipment BusinessEliminations and corporate+179 9.8 times(277)－(Note) The net sales of the equipment business is the figure after elimination of inter-segment sales.

15

Breakdown of the Change in Operating Income (Material Business)
FY2015 Result vs FY 2016 Forecast
Expenses increase(¥3.0 billion yen)

Impact ofsales increases/decreases,etc.
＋ ¥2.2 billion yen¥16.4

Impact ofExchange rate changes
anddiscounted selling prices+ ¥0.9 billion yen¥16.5

billion yen

billion yen

FY2015Full-year result

FY2016Full-year forecast+ ¥0.1 billion yen

16

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

50,00044,053-17743,835

105

44,764
194

18,53918,30918,49024,127

25,69025,42026,079FY2015/1H

FY2015/2H

FY2016/1H

FY2016/2H(Forecast)(Note)

40,00030,00037,543
168

35,323242

40,557125

16,304

14,283
14,91020,00010,00023,091

20,1700FY2014/1H

FY2014/2H

Electronic functional materials

High purity chemicals

Other(Note) Some sales channels have changed following the start of the Korean subsidiary.
A difference in accounting periods between the Company and its subsidiaries had a negative impact on sales in2014/2H.
The second half forecast is obtained by subtracting first-half results from the full-year forecast.

17(Reference) Electronic Functional Materials Division
Sales Composition of Electronic Functional Materials by Type
Other

g+i
17%

Other
High-density
10%
integration

FY2015KrF
LCD Full-year 22%
18% result

g+i
17%
12%
FY2016
KrF
Full-year
LCD
22%
14% forecast

ArF
23%

ArF
25%

High-density
integration

11%
9%

Sales Composition of Semiconductor Photoresist by Region
Japan

Japan

20%
FY2015Asia Full-year North America
60% result
15%20%FY2016
Asia Full-year North America
58% forecast 17%5%Europe5%Europe18Topics－Accelerate Strategic Investments －TOK Advanced Materials Co., Ltd. (TOKAM)
Raising production level; Leveraging functions as an overseas R&D baseTarget

Establish a strong position in the ArF 1Xnm generation
Increase ArF market share and add some extra value

2014：Production transfer of existing products was completed⇒ TOKAM started shipments

2015：Achieved production volume targets set when TOKAM
established：Began manufacturing and shipping TOKAM-developed products

20Strengthen R&D Functions of Sagami Operation Center
Sagami Operation Center:
Center of R&D, quality control and production technology forstable mass production in the Material Business…

1967 Established1997 R&D building completed (KrF)
2006 New R&D building completed (ArF)

KrF⇒Top market share
ArF⇒Increased market share2015 Strengthen R&D Functions of Sagami Operation Center
Achieve ArF market share of 30%
・Strengthen infrastructure to win continuous
adoption by customers(1) Improve adoption probability by increasing
evaluation opportunities(2) Conduct timely development that suits
customers’ schedules(3) Conduct development to eliminate pattern defects

Strategic Investments(from FY2016/2H to FY2017)
Major equipment introduced・High NA ArF immersion exposure
equipment
・Pattern defects inspection
equipment
・Coater/developer21

Accelerate Strategic Investments
Cost in the Material Business＋¥3.0 billion(Budget Base)＋¥3.5 billion

Purchase R&D equipment and prototype
production equipment (⇒⇒depreciation)
Operational and maintenance costs related toequipment
Costs for product development and sample
provision necessary to acquire new business andnew customers, etc.

12/3

13/3

14/3

15/3

16/3

R&D/Marketing Themes (excerpt)＜ArF＞＞
Advance development and win adoption of 10nmand beyond＜KrF＞＞Expand adoption of thick-film photoresists for 3DNAND＜High-density integration materials＞＞
Develop Taiwanese and Chinese markets (BUMPresists)
Acquire new customers, develop European market(MEMS materials)＜LCD materials＞＞
Develop high-resolution photoresists＜High purity chemicals＞＞
Achieve even higher purity for 10nm and beyond
Develop cleaning solutions customized for local needs＜New Business＞＞
Photovoltaic related materials, LiB related materials,
rechargeable microbatteries, LED photonic crystal,
photoresists for microchannels, materials for sensors,etc.

22http://www.tok.co.jp/eng(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.