Q2 FY2019    -Apr 1, 2019 to Sep 30, 2019 - Presentation for IR Meeting Tokuyama Corporation Oct 31, 2019 Progress Made with Management Issues •   Improve the Company’s financial position •  Treating coal-fired power as posing the biggest risk to the Company, painstakingly working on the reduction as well as on the use and application of CO2 emissions •   Creating a path for growth by time next Medium-Term Management Plan is formulated
TOKUYAhIA
Results in Fiscal Period under Review •  Based on close inspection of consolidated performance forecast for fiscal 2019, the previous forecast has been revised downwardly •   Semiconductor market moving away from a period of stagnation, but there are differences in the degree of recovery depending on the customer •  In terms of raw fuel costs, although coal prices remain low, cost benefits will appear in earnest from the second half
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1) Financial Results for Q2 FY2019 2) Performance Forecasts for FY2019 3) Topics 4  Supplementary Data
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1)Financial Results for Q2 FY2019 1. Financial Highlights 2. Net Sales / Operating Profit by Business Segment 3. Changes in Operating Profit 4. Changes in Net Sales / Operating Profit by Business Segment 5 ● Financial Results for Q2 FY2019
TOKUYAmAマ6 ● Financial Results for Q2 FY2019
7 ● Financial Results for Q2 FY2019 (Year-on-year change)
(Billions of yen)
(Note) Sales and operating profit shown above include inter-segment transactions. *The figures of Q2 FY2019 and Q2 FY2018 stated above have been modified to reflect the operating results based on the business segment after this change.
TOKUYAMA
● Financial Results for Q2 FY2019 3. Changes in Operating Profit By Segment • Price decline of caustic soda export (-) • Decrease in sales volume of propylene oxide for use in urethane (-) (Year-on-year change) (Billions of yen)
TOKUYAMA
9 ● Financial Results for Q2 FY2019 3. Changes in Operating Profit By Factor (Year-on-year change) (Billions of yen) • Increase in depreciation (-) FY2018 2Q Raw material and fuel price Sales volume Selling price Improvement of operation Others (Fixed costs, etc.) FY2019 2Q • Price decline of caustic soda export (-) • Price decline of petrochemical products (-)
TOKUYAM

(Year-on-year change) Chemicals
Lower earnings on lower sales
(Billions of yen) Qualitative information 48.1 46.3 (Caustic soda) • Despite firm sales volume trends, its operating profit decreased due to the increase in raw material price coupled with a deterioration in overseas market conditions. (Vinyl chloride resin) • Operating profit increased on the back of efforts to maintain spread between selling prices and raw material price. (Propylene oxide) • Operating profit decreased owing to a drop in sales volume for use in urethane. (Calcium chloride) • Operating profit decreased. This largely reflected weak sales volume and an increase in logistics costs. Q2   FY2018 ■ Net Sales ■ Operating Profit Q2   FY2019 ● Financial Results for Q2 FY2019 (Year-on-year change)
Specialty Products Lower earnings on lower sales (Billions of yen) Qualitative information (Semiconductor-grade Polycrystalline silicon and Thermal management material) • Operating profit decreased. This was due to decline in sales amount caused by the delayed recovery of semiconductor market. (High-purity chemicals for electronics manufacturing) • Its business result was almost same as the corresponding period of the previous year. This reflected the recovery of sales volume mainly for export. Q2   FY2018 Q2   FY2019 ■ Net Sales ■ Operating Profit ● Financial Results for Q2 FY2019
(Year-on-year change) Cement Q2   FY2018 Q2   FY2019 ■ Net Sales ■ Operating Profit Lower earnings on lower sales (Billions of yen) Qualitative information (Cement) • Despite the partial positive flow on effects of a revision to selling prices, this decrease was largely due to decline in sales amount. As a result, its operating profit decreased. (Resource recycling business) • Its business result was almost same as the corresponding period of the previous year. (Consolidated subsidiaries) • Due to the firm shipping trends of ready-mixed concrete, its business result was almost same as the corresponding period  of the previous year.
(Year-on-year change) Life & Amenity
Lower earnings on higher sales
(Billions of yen) Qualitative information (Plastic lens-related materials) • Sales volume of photochromic dye materials for eyeglass lenses increased. (Dental materials) • Despite an increase in sales volume overseas, its operating profit decreased mainly due to the increase in advertising expenses associated with the release of new products to the market. (Medical diagnosis systems) • Its operating profit increased This largely reflected successful efforts to capture large-scale laboratory automation system projects in Japan. (lon exchange membranes) • Its operating profit decreased due to large-scale project recorded in the corresponding period of the previous year. *The figures of Q2 FY2019 and Q2 FY2018 stated above have been modified to reflect the operating results based on the business segment after this change. Q2   FY2018 ■ Net Sales ■ Operating Profit
Q2   FY2019
2)Performance Forecasts for FY2019 1. Revised Performance Forecasts 2. Revised Performance Forecasts by Business Segment
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The forecast, announced on April 26, 2019, has been revised (Billions of yen)
previous performance forecast released on April 26, 2019, due to close inspection of consolidated performance forecast for fiscal 2019. 16 TOKUYAMA The forecast, announced on April 26, 2019, has been revised � Performance Forecasts for FY2019 2. Revised Performance Forecasts by Business Segment
(Note) Sales and operating profit in each segment shown above include inter-segment transactions. 3) Topics 1. Efforts to reduce CO₂ Emission 2. Progress of Medium-Term Management Plan 3) Topics
. Aiming to reduce greenhouse gas emissions in order to prevent global warming, set a reduction target for energy-derived CO 2 emissions ⇒ 15% reduction compared to BAU (FY 2013 basis) by 2030 ● ● Established an organization to promote CO2 emission reduction Reviewing investment evaluation system, promoting investment to reduce CO2 emissions • Promoting reduction of CO2 emissions centering on resolving following issues: — New technology development • CO2 capture/use and application — Introduction of renewable energy •   Biomass combustion • Energy mix — Optimization of Tokuyama Factory’s energy efficiency 3) Topics
The target of financial index has been achieved before  the final year of  Medium-Term Management Plan (Billions of yen) _ → Interest-bearing debt ●Shareholders' equity Shareholders' equity ratio D/E ratio
TOKUYANA

•  Cost reduction in the first half of FY2019 exceeds results in the first half of FY2018. •  Target for the current medium-term management plan will be achieved in this year Cost reduction   30 (Billions of yen)
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Chemistry with a heart
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1. Consolidated Financial Statements 2. Non-Operating Income/Expenses, Extraordinary  Gains/Losses and Financial Cost 3. Investment Results/Plan 4. Performance Trend 5.   CAPEX and Depreciation Trend 6.   Interest-Bearing Debts Trend 7.   Cash Flow Plan
Income  Statements (Billions of yen)
*Regarding changes, income or profit is shown as positive and expenses or losses are shown as negative amount.
Balance  Sheets (Billions of yen)
4 Supplementary Data
Consolidated (year-on-year change)
*Regarding changes, income or profit is shown as positive and expenses or losses are shown as negative amount. TOKUYAMA 9 4 Supplementary Data
(Billions of yen)

TOKUYAMA's

4 Supplementary Data 4. Performance Trend (Quarter) Consolidated (Billions of yen) ■ Net Sales ■ Operating Profit 4 Supplementary Data 4. Performance Trend Quarter (Billions of yen) Chemicals Q1/FY18 Q2/FY18 Q3/FY18 Q4/FY18 Q1/FY19 Q2/FY19 Cement ■ Net Sales Specialty Products Life & Amenity ■ Operating Profit 32

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✪ Supplementary Data 7. Cash Flow Plan (Billions of yen)
This material is supplied to provide information of Tokuyama and its Group companies, and is not intended as a solicitation for investment or other actions. This material has been prepared based on the information currently available and involves uncertainties. Tokuyama and its Group companies accept no liability in relation to the accuracy and completeness of the information contained in this material. Tokuyama and its Group companies assume no responsibility whatever for any losses or deficits resulting from investment decisions based entirely on projections, numerical targets and other information contained in this material. Accordingly, the information on this material may not be used, reproduced, altered, distributed, sold, reprinted or published without the prior approval of the Company. Chemistry with a heart
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