July 31, 2018 Stock exchange listings: Tokuyama Corporation Tokyo 4043 (URL http://www.tokuyama.co.jp/eng/ ) Local Code : Representative: Hiroshi Yokota, President and Representative Director Taro Kobayashi, General Manager, Corporate Communications & Investor Relations Dept. Contact: +81-3-5207-2552 Scheduled date of dividends payout : Preparation of supplementary quarterly explanatory materials: Yes Quarterly business results IR briefing to be held: Yes (for institutional investors and analysts) 1. Consolidated results for fiscal first quarter ended June 30, 2018 (April 1, 2018 - June 30, 2018)
1, 2017. On this basis, basic earnings per share data is calculated on the assumption that the consolidation of shares was conducted as of the beginning of the preceding fiscal year.
(Note) Revision of the latest dividends forecast: No * The Company consolidated its common shares at a ratio of one share for each five shares effective as of October 1, 2017. The amount of dividend for the end of the second quarter of the fiscal year ending March 31, 2018 is presented as the amount of dividend prior to share consolidation. The forecast amount for the year-end dividend per share for the fiscal year ending March 31, 2018 is stated after taking into the account the impact of the share consolidation. The annual dividend amount is presented as "-." Meanwhile, the interim dividend per share for the fiscal year ending March 31, 2018 converted after the share consolidation and the annual dividend per share are ¥10.00 and ¥30.00, respectively. 1
*Notes (1) Changes in significant subsidiaries during this period : No (2) Application of accounting methods specific to the preparation of the quarterly consolidated financial statements : Yes (Note) For more details, please refer to "2. Quarterly Consolidated Financial Statements and (4) Notes on Quarterly Consolidated Financial Statements (Change in accounting process specific to preparing quarterly consolidated financial statement)" on page 12 of the Accompanying Materials to this Summary of Quarterly Consolidated Financial Statement. (3) Changes of accounting policies, changes in accounting estimates, and retrospective restatements

(4) Number of shares issued (in common stock)

* The Company consolidated its common shares at a ratio of one share for each five shares effective as of October 1, 2017. On this basis, number of shares issued at end of period, number of treasury stock at end of period and average number of shares over period are calculated on the assumption that the consolidation of shares was conducted as of the beginning of the preceding fiscal year.
(Note) Notice on the implementation of quarterly review procedures
This summary of quarterly consolidated financial statements is not subject to quarterly review procedures in line with the Financial Instruments and Exchange Act. At the point of disclosure of this summary of quarterly consolidated financial statements, the quarterly consolidated financial statements review procedures in line with the Financial Instruments and Exchange Act are underway. (Note) Cautions pertaining to appropriate use of performance forecast and other particular items (Cautions related to Forward-looking statement) The performance forecast and other forward-looking statements contained in this material have been prepared on the basis of information available at this point and certain assumptions which are judged to be rational, and may be substantially different from the actual performance because of various factors that may arise from now on.
Contents for Accompanying Materials

(1) Explanation concerning business results
Consolidated results for the first quarter fiscal 2018 (April 1, 2018 - June 30, 2018) are summarized as follows:

Net sales
Consolidated net sales increased 4.6%, or ¥3,351 million compared with the corresponding period of the previous year, to ¥75,825 million. This was largely attributable to an increased sales volume in products such as semiconductor-related products and revision in selling prices of products such as caustic soda.
Cost of  sales
Cost of sales increased 4.9%, or ¥2,402 million compared with the corresponding period of  the previous year, to ¥51,752 million. This was due mainly to a upturn in raw material and fuel costs as a result of the increase in domestic naphtha and coal prices.
SG&A expenses
SG&A expenses increased 3.8%, or ¥557 million compared with the corresponding period of the previous year, to ¥15,188 million. This was largely attributable to the increase in logistics costs.
Operating profit
Operating profit increased 4.6%, or ¥390 million compared with the corresponding period of the previous year, to ¥8,883 million. Despite an increase in fuel and raw material costs, this was due mainly to an increased sales volume in major products and improved profitability with the effect of the revision in selling prices. Non-operating income/expenses, Ordinary profit Non-operating income/expenses improved by ¥533 million compared with the corresponding period of the previous year. As a result of the above, ordinary profit increased 11.9%, or ¥924 million compared with the corresponding period of the previous year, to ¥8,677 million. Extraordinary income/losses, Profit/loss before income taxes, Profit/loss, Profit/loss attributable to owners of parent Extraordinary income/losses improved by ¥8,064 million compared with the corresponding period of the previous year. As a result of the above, profit before income taxes was ¥8,446 million, which improved by ¥8,988 million compared with the corresponding period of the previous year. Profit after deducting income taxes calculated in an appropriate way was ¥6,849 million, which improved by ¥11,516 million compared with the corresponding period of the previous year. Profit attributable to owners of parent was ¥6,658 million, which improved by ¥14,801 million compared with the corresponding period of  the previous year.

Chemicals
Sales of caustic soda were up compared with the corresponding period of the previous year. Sales volume was steady mainly due to exports to Asia and the revision of selling prices was also progressed. With regard to vinyl chloride monomer (VCM), despite decrease in the volume of export, the market trend was advancing. As a result of this, sales was almost same as the corresponding period of the previous year. Sales of vinyl chloride resin increased. The volume of sales increased on the back of robust domestic demand. Meanwhile, manufacturing costs increased due to a rise in raw material prices such as domestic naphtha. As a result of the above, segment net sales increased 10.6% compared with the corresponding period of the previous year, to ¥25,119 million and operating profit increased 37.2% to ¥4,896 million. The segment reported higher earnings on higher sales.
Specialty Products
Sales of polycrystalline silicon decreased. Despite an increase in sales volume of semiconductor-grade polycrystalline silicon, this was primarily due to removal of Tokuyama Malaysia Sdn. Bhd. from the Company's scope of consolidation in May 2017. Sales of fumed silica increased compared with the corresponding period of the previous year due to robust sales of such applications as a polishing material for semiconductors. With regard to high-purity chemicals for electronics manufacturing, sales increased compared the corresponding period of the previous year, mainly due to an increase in sales volume in such applications as semiconductor manufacturing. With regard to thermal management material, sales increased compared the corresponding period of the previous year. This was attributable to an increase in sales volumes of such applications used for semiconductor production equipment. As a result of the above, segment net sales decreased 0.2% compared with the corresponding period of the previous year, to ¥13,005 million and operating profit increased 23.9% to ¥1,922 million. The segment reported higher earnings on lower sales.
Cement
With regard to cement, despite a weak sales volume, the export prices was advancing. As a result of this, sales was almost same as the corresponding period of the previous year. Meanwhile, manufacturing costs increased due to a rise in raw material prices such as coal. In the resource recycling business, despite the Company accepted a lower volume of waste, the waste disposable fees increased compared with the previous fiscal year. As a result of this, sales was almost same as the corresponding period of the previous year. Consolidated subsidiary net sales increased. This mainly reflected the robust shipping trends of cement-related products. As a result of the above, segment net sales increased 5.6% compared with the corresponding period of the previous year, to ¥22,172 million and operating profit decreased 18.5% to ¥870 million. The segment reported lower earnings on higher sales.
Life & Amenity
Sales of active pharmaceutical ingredients and intermediates increased compared with the corresponding period of the previous year, owing mainly to a robust sales volume of generic pharmaceuticals. With regard to plastic lens-related materials, sales increased from the corresponding period of the previous year. This reflected robust sales volumes of photochromic dye materials for eyeglass lenses. With regard to polyolefin film, sales were increased compared with the corresponding period of the previous year. This was due mainly to trends in sales mainly for application in packaging materials for products sold at convenience stores. With regard to ion exchange membranes, sales were up compared with the corresponding period of  the previous year due to robust sales. With regard to medical diagnosis systems, sales were down compared with the corresponding period of the previous year. This largely reflected the decrease of sales targeting large-scale projects compared with the corresponding period of the previous fiscal year. As a result of the above, segment net sales increased 4.8% compared with the corresponding period of the previous year, to ¥12,389 million and operating profit increased 7.3% to ¥838 million. The segment reported higher earnings on higher sales.
(2) Explanation concerning financial position
(Status of  assets, liabilities and net assets) As of June 30, 2018, total assets amounted to ¥358,025 million, an decrease of ¥3,924 million compared with those as of March 31, 2018. This decrease primarily reflects the decrease of notes and accounts receivable-trade of ¥ 3,392 million. Total liabilities amounted to ¥216,944 million, down ¥8,412 million compared with those as of March 31, 2018. The principal factors are a decrease in long-term loans payable and current portion of  long-term loans payable, income taxes payable, and notes and accounts payable-trade of ¥3,042 million, ¥2,561, and ¥2,367, respectively. Net assets totaled ¥141,080 million, an increase of ¥4,488 million compared with those as of March 31, 2018. This mainly reflected the increase of retained earnings of ¥5,267. This was primarily due to posting profit attributable to owners of parent, despite decrease due to the payment of dividend.
(3) Explanation concerning information related to future prediction such as
consolidated performance forecast
Although the future business environment is uncertain because of the fluctuations in exchange rate and raw material and fuel prices, the Company's results were in line with our expectations at this time. Therefore, the Company has not revised the performance forecasts, announced on April 27, 2018. The performance forecast has been prepared on the basis of information available at this point and certain assumptions which are judged to be rational, and may be substantially different from the actual performance because of various factors that may arise from now on.
3. Consolidated Financial Statements

(3) Consolidated Statements of Comprehensive Income

(Change of Accounting Process Specific to Preparing Quarterly Consolidated Financial Statement) (Calculation of Tax Expense) The Company rationally estimated the effective tax rate after the application of accounting policy for deferred tax, which was applied to the profit/loss before income tax for the fiscal year under review including the first quarter consolidated accounting period for the fiscal year ending March 31, 2019, and calculated the tax expense by multiplying the estimated effective tax rate to the profit/loss before income tax. However, if the application of said estimated effective tax rate reduces the rationality of the calculation of tax expense, the Company applies the effective statutory tax rate.
(Additional Information)
(Application of the Partial Amendments to the Accounting Standard for Tax Effect Accounting) Effective from the first quarter of the fiscal year under review, Tokuyama has applied the Partial Amendments to the Accounting Standard for Tax Effect Accounting (Accounting Standards Board of Japan (ASBJ) Statement No. 28 issued on February 16, 2018). Accordingly, deferred tax assets have been reclassified and included in the investment and other assets section of the Company's balance sheet, and deferred tax liabilities have been reclassified and included in the non-current liabilities section of the Company's balance sheet.
First Quarter Fiscal 2017 (April 1, 2017 – June 30, 2017) 1. Information on sales and profit by reportable segment
*1 The "Others" segment comprises businesses other than those of the reportable segments. Specifically, the segment includes overseas sales companies, a distribution company, a real estate business, etc. *2 The segment profit adjustment amount consists mainly of basic R&D expenses that are not allocable to a specific reportable segment and the amount of inter-segment eliminations. *3 With regard to segment profit, operating profit in the quarterly consolidated statement of profit has been calculated by making an adjustment to the sum total of the reportable segments' profit and the "Others" segment's profit.
*1 The "Others" segment comprises businesses other than those of the reportable segments. Specifically, the segment includes overseas sales companies, a distribution company, a real estate business, etc. *2 The segment profit adjustment amount consists mainly of basic R&D expenses that are not allocable to a specific reportable segment and the amount of inter-segment eliminations. *3 With regard to segment profit, operating profit in the quarterly consolidated statement of profit has been calculated by making an adjustment to the sum total of the reportable segments' profit and the "Others" segment's profit.