トクヤマ（4043） – Presentation for the Third Quarter Fiscal 2021

Q3 Fiscal 2021 – Apr 1, 2021 to Dec 31, 2021- Presentation for IR Meeting January 31, 2022 Key points of the third quarter of fiscal 2021 • Despite a year-on-year increase in sales of semiconductor- and healthcare-related products as well as such factors as an increase in the price of petroleum products, earnings decreased as a result of upswings in fuel and raw material prices as well as costs including logistics expenses • Although the total performance forecast has not been revised, the breakdown by segment is revised mainly based on the actual results up to Q3 fiscal 2021 • Continue to focus on efforts aimed at achieving the performance forecasts for fiscal 2021, by taking such measures as the revision of sales prices to recover the increase in costs • Steadily implemented growth strategies to achieve business portfolio transformation, including expansion the IC Chemicals business by establishment of a high-purity IPA joint venture company in South Korea © 2022 Tokuyama Corporation. All rights reserved. 2 1 Financial Results for Q3 FY2021 2 Performance Forecasts for FY2021 CONTENTS 3 Topics 4 Supplementary Material © 2022 Tokuyama Corporation. All rights reserved. 3 1 Financial Results for Q3 FY2021 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 © 2022 Tokuyama Corporation. All rights reserved. © 2022 Tokuyama Corporation. All rights reserved. 4 1 Financial Results for Q3 FY2021 1. Financial Highlights Q3 FY2020 Q3 FY2021 Difference Accounting Standard for _____Revenue Recognition： Not applied Amount % Top :Applied Bottom:Not applied 211.6 247.1 Net sales 220.9 (9.3) +26.2 (4) Upturn in price of petroleum products Solid sales of semiconductor-related products +12 Operating profit 21.7 17.1 (4.5) (21) Increase in fuel and raw material prices (Billions of yen) Main changing factors Ordinary profit 21.1 17.6 (3.5) (17) Decrease in operating profit Profit attributable to owners of parent 19.3 13.3 (5.9) (31) Increase in Income taxes Basic earnings per share (yen) 278.14 185.87 Exchange rate (yen/USD) 106 111 Domestic naphtha price (yen/kl) 28,800 53,800 – – – – – – – – – © 2022 Tokuyama Corporation. All rights reserved. 5 1 Financial Results for Q3 FY2021 1. Financial Highlights As of Mar 31,2021 As of Dec 31,2021 Difference Main changing factors (Billions of yen) Total assets 386.7 402.2 +15.4 Increase in fixed assets due to capital investment Shareholders’ equity 198.5 208.2 +9.6 Posting profit attributable to owners of parent Shareholders’ equity ratio Interest-bearing debt D/E ratio Net D/E ratio* Net assets per share (yen) 51.3% 51.8% +0.4pts 98.4 0.50 0.07 92.8 0.45 0.13 2,758.37 2,894.33 (0.05) +0.06 – *Net D/E ratio: (Interest-bearing debt – Cash and deposits, Cash equivalents, Money in trust)/Shareholders’ equity – – – – (5.6) Decrease in long-term loans payable © 2022 Tokuyama Corporation. All rights reserved. 6 1 Financial Results for Q3 FY2021 2. Net Sales/Operating Profit by Business Segment (Year-on-year change) Accounting Standard for Revenue Recognition：.. Q3 FY2020 Not applied Q3 FY2021 Top :Applied Bottom:Not applied Net sales Operating profit Net sales Operating profit Net sales % (Billions of yen) Difference Operating profit % Chemicals Cement Electronic Materials Life Science Eco Business Others 58.0 67.3 44.0 19.6 8.9 3.8 4.9 1.9 6.6 (0.4) 49.1 4.6 Total 244.8 23.9 Inter-segment eliminations and corporate-wide expenses Consolidated Results (23.8) (2.2) 220.9 21.7 72.4 73.5 38.2 71.4 53.4 53.6 23.4 23.4 7.0 7.6 26.3 43.6 221.0 273.3 (9.4) (26.2) 211.6 247.1 9.9 (1.0) 4.9 4.0 (0.5) 2.8 20.2 (3.1) 17.1 +14.4 +15.4 (29.1) +4.1 +9.4 +9.5 +3.8 +3.8 +0.4 +1.0 (22.8) (5.4) (23.7) +28.5 +14.4 (2.3) (9.3) +26.2 +25 +27 (43) +6 +21 +22 +20 +20 +7 +15 (46) (11) (10) +12 (4) +12 +0.9 +11 (4.9) – (0.0) (0) +2.1 +115 (0.1) – (1.8) (39) (3.6) (15) – (0.8) – (4.5) (21) (Note) Sales and operating profit in each segment shown above include inter-segment transactions © 2022 Tokuyama Corporation. All rights reserved. 7 1 Financial Results for Q3 FY2021 3. Changes in Operating Profit (Year-on-year change) By Factor • Raw material and fuel price (-) (20.4) 21.7 • Upturn in price of petroleum products (+) • Revision of sales prices (+) +2.6 (9.4) ＋14.6 • Increase in depreciation (-) • Increase in R&D (-) +8.0 • Increase in sales of semiconductor-related products (+) • Recovery from the impact of COVID-19 (+) (Billions of yen) 17.1 Q3 FY 2020Raw material andfuel priceSales volumeSelling priceImprovement ofoperationFixed costs andothersQ3 FY 2021© 2022 Tokuyama Corporation. All rights reserved. 8 4. Changes in Net Sales / Operating Profit by Business Segment 1 Financial Results for Q3 FY2021 (Year-on-year change) Chemicals Higher earnings on higher sales 73.5 72.4 58.0 8.9 (Billions of yen) 9.9 Net Sales Operating Profit The impact of the application of the Accounting Standard for Revenue Recognition and other standards Q3 FY2020 Q3 FY2021 2021年3月期 2022年3月期 第3四半期 第3四半期 21.3 3.8 23.3 4.6 24.0 19.8 4.0 4.3 28.5 1.5 Q3/ 20.3QFY20 Q4/ 20.4QFY20 Q1/ 21.1QFY21 Q2/ 21.2QFY21 Q3/ 21.3QFY21 Qualitative information (Caustic soda) • Earnings declined. This downturn in earnings was due to manufacturing costs rising as a result of higher raw material and fuel costs (Vinyl chloride monomer (VCM)) • Its earnings increased due to the upturn in export prices (Vinyl chloride resin) • Downturn in earnings due to rising manufacturing costs as a result of higher raw material and fuel costs (Soda ash / Calcium chloride) • Decrease in earnings owing to the upswing in raw material and fuel costs triggering an increase in manufacturing costs © 2022 Tokuyama Corporation. All rights reserved. 9 1 Financial Results for Q3 FY2021 4. Changes in Net Sales / Operating Profit by Business Segment (Year-on-year change) Cement Loss on lower sales 67.3 71.4 3.8 38.2 (Billions of yen) Net Sales Operating Profit The impact of the application of the Accounting Standard for Revenue Recognition and other standards (1.0) 2021年3月期 2022年3月期 Q3 FY2020 Q3 FY2021 第3四半期 第3四半期 25.2 22.2 1.4 0.6 12.2 0.5 12.7 13.2 (0.5) (1.0) 20.3Q20.4Q21.1Q21.2Q21.3QQ3/ FY20 Q4/ FY20 Q1/ FY21 Q2/ FY21 Q3/ FY21 Qualitative information (Cement) • Despite shipments of being in line with the corresponding period of the previous year, its earnings deteriorated due to manufacturing costs rising as a result of higher raw material costs © 2022 Tokuyama Corporation. All rights reserved. 10 4. Changes in Net Sales / Operating Profit by Business Segment 1 Financial Results for Q3 FY2021 (Year-on-year change) Electronic Materials Lower earnings on higher sales 44.0 4.9 (Billions of yen) 53.4 4.9 Net Sales Operating Profit Qualitative information (Semiconductor-grade Polycrystalline silicon) • Despite an increase in raw material costs, increase in earnings owing to firm sales on the back of the introduction of 5G and an increase in remote work The impact of the application of the Accounting Standard for Revenue (IC Chemicals) Recognition and other standards is not shown because it is minor • Its earnings decreased despite sales volumes increasing mainly overseas. This downturn largely reflected higher raw material costs Q3 FY2020 Q3 FY2021 2021年3月期 … 2022年3月期 … 16.1 1.9 17.7 2.1 16.5 2.1 17.2 1.9 19.6 0.8 Q3/ 20.3QFY20 Q4/ 20.4QFY20 Q1/ 21.1QFY21 Q2/ 21.2QFY21 Q3/ 21.3QFY21 (Fumed Silica) • Despite an upswing in raw material costs, increase in earnings owing to higher sales volume centered on applications for semiconductor abrasives (Thermal management materials) • Results were essentially in line with the corresponding period of the previous fiscal year. Although sales volume was solid, this largely reflected higher R&D expenses at the Center for Commercialization of Advanced Technology © 2022 Tokuyama Corporation. All rights reserved. 11 4. Changes in Net Sales / Operating Profit by Business Segment 1 Financial Results for Q3 FY2021 (Year-on-year change) Life Science Higher earnings on higher sales 19.6 1.9 (Billions of yen) 23.4 4.0 Net Sales Operating Profit Qualitative information (Dental materials) • Its earnings grew thanks to a recovery in shipments to Europe and the United States, which had declined as a result of the spread of COVID-19 The impact of the application of the Accounting Standard for Revenue Recognition and other standards (Plastic lens-related materials) is not shown because it is minor • Earnings increased owing to a recovery in shipments to Europe and the United States of eyeglass lens photochromic materials, which had declined as a result of the spread of COVID-19 Q3 FY2020 Q3 FY2021 2021年3月期 … 2022年3月期 … (Pharmaceutical ingredients and intermediates) • Its earnings increased, owing mainly to a robust sales volume of 9.0 1.5 7.4 1.1 6.7 0.8 7.8 8.0 1.4 1.4 generic pharmaceuticals. 20.3QQ3/ FY20 20.4QQ4/ FY20 21.1QQ1/ FY21 21.2QQ2/ FY21 21.3QQ3/ FY21 © 2022 Tokuyama Corporation. All rights reserved. 12 4. Changes in Net Sales / Operating Profit by Business Segment 1 Financial Results for Q3 FY2021 (Year-on-year change) Eco Business Newly established for new business development 6.6 7.6 7.0 (Billions of yen) Net Sales Operating Profit Qualitative information (Waste gypsum board recycling) • Increase in earnings due to the steady acceptance of waste (0.4) The impact of the application of the Accounting Standard for Revenue Recognition and other standards (0.5) (Ion exchange membranes / Plastic window sashes) • Earnings were all in line with the corresponding period of the gypsum board previous year 2021年3月期 … 2022年3月期 … Q3 FY2020 Q3 FY2021 2.9 2.4 2.2 2.2 2.5 (0.0) 0.0 (0.1) (0.1) (0.1) Q3/FY20Q3/ FY20 Q4/FY20Q4/ FY20 Q1/FY21Q1/ FY21 Q2/FY21Q2/ FY21 Q3/FY21Q3/ FY21 © 2022 Tokuyama Corporation. All rights reserved. 13 2 Performance Forecasts for FY2021 1. Performance Forecasts 2. Revised Performance Forecasts by Business Segment © 2022 Tokuyama Corporation. All rights reserved. © 2022 Tokuyama Corporation. All rights reserved. 14 2 Performance Forecasts for FY2021 The forecast, announced on Oct 28, 2021, has not been revised 1. Performance Forecasts FY2020 Results FY2021 Forecasts Difference Accounting Standard for Revenue Recognition： Not applied (Billions of yen) Top:Applied Bottom:Not applied 293.0 337.0 Amount (9.4) +34.5 Main changing factors % (3) Improve in impact of COVID-19 Increased sales volume in semiconductor-related products +11 Price increase of petroleum products 22.0 (8.9) (29) Increase investment for future growth Increase in fuel and raw material prices 22.0 (8.7) (29) Decrease in operating profit 22.0 (2.5) (10) Decrease in ordinary profit 302.4 30.9 30.7 24.5 Net sales Operating profit Ordinary profit Profit attributable to owners of parent Basic earnings per share (yen) Exchange rate (yen/USD) Domestic naphtha price (yen/kl) 351.11 305.66 106 31,200 3Q results:111 4Q forecast:115 3Q results:53,800 4Q forecast:60,000 – – – – – – – – – © 2022 Tokuyama Corporation. All rights reserved. 15 2 Performance Forecasts for FY2021 The forecast, announced on Oct 28, 2021, has been revised 2. Revised Performance Forecasts by Business Segment Accounting Standard for Revenue Recognition： FY2021 Forecasts (Oct 28, 2021) Applied FY2021 Forecasts (Jan 31, 2022) Applied Net sales Operating profit Net sales Operating profit Net sales % Operating profit % Chemicals Cement Electronic Materials Life Science Eco Business Others Total Inter-segment eliminations and corporate-wide expenses Consolidated Results 100.0 53.0 73.5 32.5 11.5 33.0 303.5 14.5 (1.5) 4.0 5.0 0.0 4.0 26.0 100.0 53.0 73.5 32.5 11.5 33.0 303.5 (10.5) (4.0) (10.5) 293.0 22.0 293.0 14.5 (2.5) 6.0 5.5 (0.5) 3.0 26.0 (4.0) 22.0 (Note) Sales and operating profit in each segment shown above include inter-segment transactions (Billions of yen) Difference – – – – – – – – – – – – – – – – – – – (1.0) +2.0 +0.5 (0.5) (1.0) – – – +50 +10 (25) – – – – – – © 2022 Tokuyama Corporation. All rights reserved. 16 Although the total performance forecast has not been revised, the breakdown by segment is revised mainly based on the actual results up to Q3 FY2021 3 Topics 1.Invest in Growth Businesses and Accelerate International Expansion © 2022 Tokuyama Corporation. All rights reserved. © 2022 Tokuyama Corporation. All rights reserved. 17 3 Topics 1. Trends in growth business investment Following Taiwan, decision made to establish a joint venture company for the purpose of manufacturing and selling high-purity isopropyl alcohol (IPA) in South Korea Maintain production bases in markets where major customers are located; accelerate IC Chemicals Business growth ：Manufacturing and sales bases ：Filling and sales bases ：Manufacture and export at Tokuyama Factory Tokuyama Chemicals (China) STAC (South Korea) Taiwan Tokuyama Tokuyama Factory FTAC (Taiwan) *Plans to switch to local production in Taiwan Tokuyama Electronic Chemicals（Singapore） © 2022 Tokuyama Corporation. All rights reserved. 18 4 Supplementary Material 1. Consolidated Financial Statements 2. Performance Trend © 2022 Tokuyama Corporation. All rights reserved. © 2022 Tokuyama Corporation. All rights reserved. 20 4 Supplementary Material 1. Consolidated Financial Statements Income Statements (Billions of yen) Q3 FY2020 Q3 FY2021 Difference Not applied Applied Amount % Accounting Standard for Revenue Recognition： Net sales Cost of sales Selling, general and administrative expenses Operating profit Non-operating income/expenses Ordinary profit Extraordinary income/expenses Profit/loss before income taxes Income taxes Non-controlling interests Profit attributable to owners of parent 220.9 151.5 47.6 21.7 (0.5) 21.1 0.4 21.6 1.9 0.4 19.3 211.6 141.8 52.6 17.1 0.5 17.6 2.1 19.8 6.4 0.0 13.3 (9.3) +9.7 (4.9) (4.5) +1.0 (3.5) +1.6 (1.8) (4.4) +0.3 (5.9) (4) +6 (10) (21) – (17) +334 (9) (229) +97 (31) *Regarding changes, income or profit is shown as positive and expenses or losses are shown as negative amount © 2022 Tokuyama Corporation. All rights reserved. 21 4 Supplementary Material 1. Consolidated Financial Statements Balance Sheets 3/31/2021 12/31/2021 (Billions of yen) Changes Amount % Total assets Current assets Tangible fixed assets Intangible fixed assets Investments and other assets Total liabilities Current liabilities Long-term liabilities Total net assets 3/31/2021 12/31/2021 Changes Amount % 386.7 199.7 124.0 1.8 61.1 181.5 83.3 98.2 205.2 402.2 202.4 135.1 2.3 62.3 185.8 106.2 79.5 216.4 +15.4 +2.6 +11.0 +0.4 +1.2 +4.2 +22.9 (18.6) +11.1 +4 +1 +9 +23 +2 +2 +28 (19) +5 © 2022 Tokuyama Corporation. All rights reserved. 22 4 Supplementary Material 2. Performance Trend Net sales (Billions of yen) 350.0287.3 258.6 Annual Profit (Billions of yen) 302.0 307.1 299.1 308.0 324.6 316.0 302.4 293.0 38.5 41.2 35.2 34.2 30.9 20.2 19.5 23.0 22.0 70.060.050.040.030.020.010.00.0(Billions of yen) FY121314151718192016Net sales52.1 Operating Profit34.2 21Forecast22.0 24.5 10.2 (37.9) (65.3) ■ Profit attributable to owners of parents (100.5) 19.6 19.9 FY12131415161718192021Forecast© 2022 Tokuyama Corporation. All rights reserved. 23 6.7 300.0250.0200.0150.0100.050.00.060.030.00.0(30.0)(60.0)(90.0)(120.0)4 Supplementary Material 2. Performance Trend Consolidated Quarter 83.7 79.5 10.1 9.5 70.6 72.6 81.4 9.2 77.6 8.7 6.6 6.2 67.4 65.1 7.4 (Billions of yen) 78.9 5.4 4.1 20.1QQ3/FY19 Q4/FY19 Q1/FY20 Q2/FY20 Q3/FY20 20.3Q20.2Q19.3Q19.4Q20.4QQ4/FY20 Q1/FY21 21.1QQ2/FY21 Q3/FY21 21.3Q21.2Q売上高 2■ Net Sales ■ Operating Profit © 2022 Tokuyama Corporation. All rights reserved. 24 Disclaimer 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. 25