The 2nd QT of Fiscal Year ending March 2019 Ichikawa Plant OYO GOSEI November 16, 2018 Business Results for the 2nd QT of FY2019 (2018 Apr-Sept)
●Under good market condition, the revenue increased by 910 million yen on a  year-on-year comparison (up 9% on a year-on-year) to 11,177million yen ●Operating profit increased to 801 million yen (up 4.5% on a year-on-year comparison) and ordinary profit increased to 842 million yen (up 15% on a year-on year comparison) due to increased investment costs for the expansion  of production capacity earlier than the revenue increase.
●No extraordinary income (153 million in same period of previous year), net profit decreased
@TOYO GOSEI
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■ Revenue ✓ 11,177 million yen (up 901 million yen, up 8.8% compared to the  same period of last year) ✓ Sales for photosensitive materials and EL solvent increased steadily ■ Operating profit ✓ 801 million yen (up 34 million yen, up 4.5% compared to the same period of last year) ✓ Due to prior investment cost (labor, depreciation etc.) for the capacity improvement in photosensitive material segment, gross profit remains as slight increase ■ Ordinary profit ✓ 842 million yen (up 113 million, up 15.6% compared to the same period of last year) ✓ Because of non-operating profit 107 million yen (up 66 million yen compared to the same period of last year) including 71 million yen appraisal profit from exchange fluctuation, ordinary profit remains as slight increase ■ Net profit ✓ 550 million yen (down 38 million, down 6.5% compared to the same period of last year) ✓ Due to no extraordinary income (150 million as gain on assets sales of factory land in the same period of last year), net profit decreases from the same period of last year
Revenue & Operating profit increased in spite of the spending prior investment cost for capacity improvement
Revenue increased 10 billion yen in the last decade, strategical investment contributed business growth
● ● Business for Semiconductor and FPD applications going well resulted in the revenue increase Due to prior investment cost (labor, depreciation and etc.) for capacity improvement, profit level decreased compared to the same period of last year Revenue: 6,051 million yen ● 2,000 ● ● (up 247 million yen, up 4.3% on a YOY) Photosensitive materials sales for legacy & advanced generation in Semiconductor applications as well as FPD application have been going well Launch EUV photosensitive materials to market Sales for OLED application was lower than the expectation Operating profit: 621 million yen (down 187 million yen, down 23.2% YOY) In spite of the spending prior investment cost (labor, depreciation and etc.) for capacity improvement, gross profit remain as minimum decrease,  down 187 million yen from the same period of last year
Revenue increased 5 billion yen in the last decade The continued expansion of production capacity have been contributing to the sales growth
Fine Chemicals business for Electronic industry going well contributed to the revenue increase
Revenue : 5,125 million yen
(+653 million,+14.6% YOY) ●   Functional Chemicals business for Flavors & Fragrances going steadily resulted in profit increase ● Logistic business kept high operation Operating profit : 179 million yen (+222 million yen YOY) ● As Ultra-high purity solvent sale surged dramatically, it contributed to the profit growth Profit growth is continuing
Profit & Loss Statement
● Revenue +902 million yen, up 8.8% on a YOY • Gross profit increased up 120 million yen on a YOY comparison in spite of the spending 390 million yen investment for Photosensitive materials capacity expansion
• Net profit decreased from last year due to no extraordinary income
@TOYO GOSEI

• Accounts receivable increased in accordance with the increased sales • Inventories increased for the preparation of the capacity up work and sales increase
[interest-bearing debt+744] spending for capacity up 11 2019 March ending Projection
• FY ending projection changed to “Sales and profit growth” from “decline in profit” thanks to good business forecast for photosensitive material and ultra high purity solvent in 2 nd half. • Photosensitive materials business unit is under the capacity up construction, it will contribute to the profit improvement in next fiscal year • Chemical business unit continues to work for profit improvement activities • Budgeted exchange rates changed to ¥110/$.  Keep dividend amount per stock.
● Continuing capacity up investment from FY2018.3,  deprecation will result in 2 billion yen OYO GOSEI
※ Depreciation in FY2019.3 as plan for start

Medium-term management plan -TGC300-
Business definition (Segment)
Corporate Principles
Toyo Gosei aims to develop in order to support the advancement of civilization through projects based on human talent, creativity, science, and technology.
Corporate Policy
1. Provide a comfortable working environment for our staff, as well as the staff of partner companies and local citizens, with operational safety as our top priority. 2. Comply with applicable laws, rules and regulations and internal rules, engage in free and fair competition and conduct fair and equitable business activities in conformity with social norms. 3. Provide world-class microstructure materials  for international society 4. Constantly develop new products, processes and services 5. Lead the market through advancements in production technology, process development and quality. 6. Develop domestically and overseas as a global company from Japan. 7. Develop as a company and contribute to society through innovation based on building individual abilities
Business definition (Segment)
Develop and Provide IT•medical/life science segment with chemicals product & service Innovative and advanced service development Support to competiveness of customers’ business 17 Target for FY2023 March ending Revenue: ≥ 30 billion yen Ordinary profit:  ≥  3 billion yen Ordinary profit %: ≥10% Capital investment: 12 billion yen (Strategic investment for 5yrs) FY2018 March ending Revenue: 20.5 billion yen Ordinary profit: 1 billion yen Ordinary profit %: 5.3% Revenue & Ordinary profit FY2018 March ending  FY2023 March ending

■ Vision of TGC300
Sincerely  proving  solution for customer's  agenda  and  technical  issue  by unique approach, become world #1 “DANTOTSU”(ultra outstanding ) company in high quality and productivity. a TOYO GOSEI
Electronics Create value Fine Chemicals Functional Chemicals New Business Seeds Provide the solution to customer Solvent Control of impurity TOYO GOSEI 20

|Market Trend
✓ Usage of Electronic Device in Daily life continue to expand ( 5G, big data, AI, IoT, EV etc) ✓ In line with minimizing device structure and improving performance, more high purity and  functionality materials are being required more in market.
Customer's Requirements
✔More requirements for Ultra high purified materials especially for EUV application ✓Few technology companies can meet small lot size with challenging production process which is getting common in the advanced technology market
Challenge for market demand
✓Need to establish state of art production for customer’s quality requirement
Measurements
• Secure production capacity ● Productivity improvement • Development of advanced purification technology
■ Photosensitive Materials Segment : Expand
production capacity
● Satisfying customer's quality requirement contributed for the material innovation in Electronic industry ● Establishing strong combination of  ultra high purification synthesis technology and sophisticated production technique for advanced semiconductor process
■ Chemicals Segment : Enhancement core business
● Enhancement of quality management, technical support and supply capability for advanced semiconductor process ● Enhancement of the value of dedicated chemical tank terminal with Robotic Process Automation and other innovative process automation 22
■ R&D and Production Technology
●   Enhancement of the production technology to satisfy cost competitive productivity and customer’s quality requirements ● Productivity improvement by integration of World #1 sophisticated purification production know-how  and IoT technology ● Establishment of new business portfolio by enhancing business process with material innovation
■ Human Resource Development
● Talent development enhancement for productivity improvement ● Training new business leader for next generation
■ Corporate Structure Enhancement
● Improvement of the safety technology for functional materials supply chain in the emerging market ● Establishment of Corporate Governance system to meet our business development plan
Demand for FPD photoresists continues to expand, driven by expanding FPD production in China. The shift to higher resolution screen is supporting a significant increase in demand for high-grade
• 2018 Jan-June result up 20.4% on a YOY (SIA), Memory IC slowing down now Popularization of Electronic Device in daily life driving IC market expansion to x 1.5-2.0 market size in 2030 World IC Market Sales (Billion USD) World IC Market Sales 1,300 25
• Semiconductor Node (Line Width) continues to be down size to 7nm as mas production at Year 2018 ● Suppose to be down size to 2nm level in 2025 • In accordance with line width down size, 3D structure, severe quality control IYO GOSFI
• EUV photoresist: trial to mass production in 2018, after 2019 volume sale will start • EUV photoresist will overtake KrF photoresist market size in 2021 and ArF Source: Fuji Chimera Research Institute, Inc 「 λ （オングストローム）半導体プロセス材料／技術の展望調査（2018年7月） |より当社作成
• Photosensitive Materials Business has been enforced by periodical capacity up investment in Semiconductor lithography process down sizing • During the term of TGC300, we aim at increase both revenue and profit by optimizing portfolio 2006.3 2007.3 2008.3 2009.3 2010.3 2011.3 2012.3 2013.3 2014.3 2015.3 2016.3 2017.3 2018.3 2019.3 2023.3
● From FY 2018.3, Investment in existing facilities for about 30-40% capacity up ● Decided to invest new production building (7 billion yen for another 30-40% capacity up) as completion in FY2021.3 to satisfy demand increasing in current market trend TOYO GOSE
. Continuously business development drive profit improvement to secure investment capability for the next development . Stable dividend is shareholder return policy, which will count also financial condition and future business development 200.3 2001.3 2002.3 2003.3 2004.3 2005.3 2006.3 2007.3 2008.3 2009.3 2010.3 2011.3 2012.3 2013.3 2014.3 2015.3 2016.3 2017.3 2018.3 2019.3
独創的な視点で世界へ
Individual Development, to the global Chemical
Ø東洋合成工業株式会社
(見通しに関する注意事項)本資料の業績予想は、現時点において見積もられた見通しであり、これまでに入手可能な情報から得られた判断に基づいております。従いまして、実際の業績は、様々な要因やリスクにより、この業績予想とは大きく異なる結果となる可能性があり、いかなる確約や保証を行うものではありません。
Diversification of IC's application need more data capacity and higher processing speed Popularization of Mobile device in the world drive data demand surging Diversification driving demand
• EUV Photoresist Polymer market will overtake KrF & ArF photoresist polymer in 2021, then the market will be 3 billion • In accordance with line width down size, the number of EUV layer will increase, usage will surge  (EUV Layer : 7nm 4 layers, 5nm 15-16 layers, 3nm more than 30 layers as expect)
• With photolithography process down sizing, rapidly surging under layer, middle layer and antireflective coating market as expect Source: Fuji Chimera Research Institute, Inc. 「 λ （オングストローム）半導体プロセス材料／技術の展望調査（2018年7月）」より当社作成
• Semiconductor Node (Line Width) continues to be down size to 7nm as mas production at Year 2018 ● Suppose to be down size to 2nm level in 2025 • In accordance with line width down size, 3D structure, severe quality control