帝人（3401） – Flash Report – Results of FY2021 3Q & Outlook for FY2021 –

Flash ReportResults of FY2021 3Q & Outlook for FY2021Teijin LimitedFebruary 7, 2022Points of Financial Results of FY2021 3Q & Outlook for FY2021• While cumulative net sales from 1Q to 3Q totaled 687.0 billion yen, a 13% increase year on year, due to an increase in sales driven by economic recovery, cumulative operating income from 1Q to 3Q was 38.2 billion yen, a 16% decrease year on year, mainly due to the further growing semiconductor shortage, the sharp rise in raw material and fuel prices and logistics costs, and the end of emergency demand for medical gowns• Although we have revised downward our forecast for annual operating income from the previous forecast,* we predict that the 4Q results will improve in comparison with the 3Q results due to major performance improvement in the Materials Business Field■ 9 months (Apr.-Dec.) results for FY2021(Operating income/ Compared with FY2020 9 months)•Strong sales in the Healthcare Business Field almost offset the impact of the end of governmental demand for medical gowns• The Material Business Field recorded an operating loss mainly due to the sharp rise in raw material and fuel prices in the composites business and the aramid business and production shutdown, etc. caused by plant power outages in the aramid business■ Outlook for FY2021 • Although our annual forecast for net sales has been revised upward from the previous forecast* in consideration of strong demand, our annual forecast for operating income has been revised downward due to the operating loss in the Materials Business Field for 3Q, and we forecast a net sales increase and an operating income decrease year on yearThere is no change to the previously announced annual dividend forecast* as well (55 yen / share, 5 yen increase from the previous year, interim dividend: 27.5 yen)•Outlook for FY2021300.0200.0100.020.010.00.0(Billions of Yen)Change in Sales for FY20 and FY21FY20FY21225.9227.5: 836.5 FY20 totalFY21 total (outlook) : 930.0233.6243.0179.1215.0215.6226.81Q2Q3Q4Q(Outlook)(Billions of Yen)Change in Operating Income for FY20 and FY21FY2017.3FY2118.5FY20 total: 54.9 FY21 total (outlook) : 50.012.614.214.26.711.89.7Net sales 930.0 billion yen, EBITDA 120.0 billion yen, Operating income 50.0 billion yen, Profit attributable to owners of parent 32.0 billion yen1Q2Q3Q4Q(outlook)* Announced on November 8, 20211Key Assumptions regarding the Company’s Main Target Markets in FY2021Demand will remain firm generallyMain businessesMarketsFY2021 9 months (Apr.-Dec.)Outlook for FY2021 4QAramidResinAutomotiveIndustrial materialsOffice machineAutomotiveMaterialsCarbon fibersAircraftCompositesAutomotive■ Assumption about costsMain AreasEuropeUSEuropeUSAsiaJapanChinaAsiaEuropeUSUSEuropeChina• Demand for tires, brakes, and hoses increased significantly despite the negative impact of the semiconductor shortage on automotive production• Sales of products for optical-fiber and other applications recovered to the 2019 level; demand remained high• The situation will remain the same as until 3Q• Demand will remain firm• Office machine manufacturers’ operations decreased due to the semiconductor shortage, in addition to the COVID-19 pandemic• Customers’ operations will remain at a decreased level due to the semiconductor shortage• The semiconductor shortage and power restrictions in China caused a decline in customers’ operations• Customers’ operations will remain at a decreased level due to the semiconductor shortage• Demand for air travel, especially for domestic flights, recovered mainly in Europe and North America, where the vaccination rate was higher than other regions• Supply chains are also shifting to try to secure necessary inventories• Demand for freight transportation remained strong• The demand recovery in supply chains will • Demand for freight transportation will also continueremain strong• OEM production was constrained due to the semiconductor shortage• While demand remains firm, OEM production will recover graduallyDuring 1Q to 3Q, the impact of an increase in raw material, fuel and logistics costs became obvious. It is predicted that costs will remain high in 4Q, so the situation should be observed closely. Tight labor market situation in the US will be getting milder from 4Q2Key Assumptions regarding the Company’s Main Target Markets in FY2021Main businessesMarketsMain AreasFY2021 9 months (Apr.-Dec.)Outlook for FY2021 4QHealthcareJapan• In the home oxygen therapy (HOT) market, restrictions on • The situation will remain the same as until 3QPharmaceuticalsHome healthcare• The market for gout and hyperuricemia treatments grew continuously• Since medical institutions continued to impose restrictions on in-person visits to them amid the COVID-19 pandemic, e-promotion was continuously enhancedhospitalization caused a continued shift to home healthcare• The market for continuous positive airway pressure (CPAP) continued to grow, and the number of examinations gradually recovered• Consumption recovered in Europe, North America and Fiber materials and apparelChinaEuropeUSChinaJapan• After slumping due to the impact of the COVID-19 pandemic, the Japanese market was on a recovery trend as the pandemic eased in 3Q• Close attention should be paid to the spread of the COVID-19 variantIndustrial materialsJapanChina• Sales of automotive applications are on a recovery trend, but were affected by semiconductor shortages• The impact of semiconductor shortage continuesFibers & Products ConvertingMedical protectiveEquipment (gowns, etc.)Japan• Governmental demand for supplies fell―ITITJapan• Piracy websites continued to affect e-comic services from 4Q of the previous fiscal year• The impact of piracy websites will last3Contents1.2.3.Note Results of FY2021 3QOutlook for FY2021 Supplementary information P. 5P.13P.22Disclaimer Regarding Forward-Looking Statements Any statements in this document, other than those of historical facts, are forward-looking statements about the future performance of Teijin and its Group companies, which are based on management’s assumptions and beliefs in light of information currently available and involve risks and uncertainties. Actual results may differ materially from these forecasts. Information about pharmaceuticals, medical devices, and regenerative medical products (including pipeline products) included in this material is not provided for the purposes of advertising or medical advice.This material is based on the consolidated results for FY2021 3Q announced at 11:30 A.M. on February 7, 2022 (local time in Japan). 1. Results of FY2021 3Q51. Results of FY2021 3Q ◆ FY2021 3Q actual highlights [Compared with FY2020 9 months (Apr.-Dec.)] • Net sales increased significantly, by 12.7% year on year, mainly due to an increase in sales in each segment driven by economic recovery and the revision of selling prices in response to a sharp rise in raw material prices in the Materials Business Field. The results exceeded the pre-COVID-19 level of the 3Q cumulative of FY2019• Operating income decreased by 15.6% mainly due to the end of governmental demand for medical gowns in the Fibers & Products Converting Business and adverse factors that appeared from 2Q, including the semiconductor shortage, the sharp rise in raw material and fuel prices and logistics costs, and production shutdowns in a business area, despite strong sales of the diabetes treatments and other products in the Healthcare Business Field• Profit attributable to owners of parent decreased by 3.7% despite an increase in the equity in earnings of affiliates and the recording ofgain on sales of investment securities(Billions of Yen)vs FY20 9 months vs FY19 9 monthsNet Sales+12.7%+6.1%609.7647.5687.0Operating Income-15.6%-20.8%48.245.238.2Profit Attributable to Owners of Parent -3.7%-14.3%30.226.825.8FY199 months(Apr.-Dec.)FY209 months(Apr.-Dec.)FY219 months(Apr.-Dec.)FY199 months(Apr.-Dec.)FY209 months(Apr.-Dec.)FY219 months(Apr.-Dec.)FY199 months(Apr.-Dec.)FY209 months(Apr.-Dec.)FY219 months(Apr.-Dec.)61. Results of FY2021 3Q ◆ Operating results [Compared with FY2020 9 months (Apr.-Dec.)]*3*1 ROE= Profit attributable to owners of parent / Average* total shareholders’ equity*2 ROIC based on operating income = Operating income / Average* invested capital(Invested capital = Net assets + Interest-bearing debt – Cash and deposits )*Average: ([Beginning balance + Ending balance] / 2)*1,2 are annualized numbers based on 9 months results*3 The calculated beginning balance of invested capital includes an increase due to the takeover of the sales rights for diabetes treatments and other related assets※Excluding an increase in intangible assets (132.4 billion yen) due to thetakeover of the sales rights for diabetes treatments and other related assets◇ Exchange rate & Oil price*4 EBITDA = Operating income + Depreciation & amortization *5 CAPEX includes investments in intangible assets (excludes M&A)7(Billions of Yen)(Billions of Yen)FY199 months(Apr.-Dec.)FY209 months(Apr.-Dec.)FY219 months(Apr.-Dec.)Difference(vs FY209 months)% ChangeFY199 months(Apr.-Dec.)FY209 months(Apr.-Dec.)FY219 months(Apr.-Dec.)Difference(vs FY209 months)% ChangeNet Sales647.5609.7687.0+77.3+12.7%CAPEX*546.541.1181.0+139.9+340.0%Operating Income48.245.238.2-7.1-15.6%(CAPEX afteradjustment※)48.6Non-operating Items (Net)(0.8)(2.4)3.2+5.5-Depreciation &Amortization38.038.651.1+12.5+32.5%Ordinary Income47.442.941.3-1.5-3.6%R&D Expenses24.622.722.3-0.4-2.0%Extraordinary Items (Net)(3.5)0.82.2+1.4+168.2%Income BeforeIncome Taxes44.043.743.5-0.2-0.4%Profit Attributable toOwners of Parent30.226.825.8-1.0-3.7%ROE *19.7%8.7%8.2%-0.5%-ROIC *29.7%9.3%6.4%-2.9%-EBITDA *486.283.889.3+5.4+6.5%FY209 months(Apr.-Dec.)FY219 months(Apr.-Dec.)Yen/US$106111Yen/Euro122131An average Dubai crude oil price (US$/barrel)3972PL exchange rate1. Results of FY2021 3Q ◆ Materials Segment [Compared with FY2020 9 months ]Sales volume increased especially in products for automotive and aircraft applications, due to demand recovery from the impact of the COVID-19 pandemic. Meanwhile, operating income was adversely affected by the semiconductor shortage, the sharp rise in raw material and fuel prices and logistics costs, and production shutdowns in a business area◼ Aramid◼ Resin- Sales volume grew due to a recovery in demand mainly for automotive applications- Costs were affected by production decline due to large-scale periodic maintenance and its extended period, as well as power outage at raw material plants, and the increased natural gas price- Sales volume remained at the same level as in the previous year due to economic recovery despite the decline in customers’ operations caused by the impact of the COVID-19 pandemic in ASEAN countries, semiconductor shortage, and power restrictions in China- Under the impact of a sharp rise of BPA prices and others, selling prices were revised◼ Carbon fibers- Sales increased for all applications, including aircraft, wind power generation, and recreation- Continued efforts were made to develop intermediate materials and prepare to start commercial production of the new carbon fiber plant in North America- In the U.S. automotive market, the semiconductor shortage affected the production of SUVs and pickup trucks, forcing some OEMs to suspend production- Raw material prices continued to rise; labor shortage in the U.S. has continued despite the abolition of extended federal unemployment benefits in September, so staff retention is still a challenge◼ Battery Materials- The sales volume of separators for lithium-ion batteries grew mainly due to the customer acquisition for smartphone market and the use of the separators in new models of smartphones- Started receiving license consideration due to progression in sales of separators for lithium-ion 8batteries for electric vehicles at coating technology licensee(Billions of Yen)FY209 monthsVolumeSales price and mixOthersFY219 months◼ CompositesRaw material and fuel costResin, composites, aramid+34.0-37.5Business activities revivalLogistic cost, wage increaseNew factories launch+16.5Resin-17.822.6Aramid, Carbon fibers, composites, etc.17.8(-4.8)(Billions of Yen)Net sales250.1206.0284.5+78.6EBITDA34.722.617.8-4.8Depreciation &Amortization21.623.022.6-0.4Operating income13.1(0.3)(4.8)-4.5ROIC6%(0%)(2%)-2%FY209 months(Apr.-Dec.)FY219 months(Apr.-Dec.)FY199 months(Apr.-Dec.)Difference(vs FY209 months)1. Results of FY2021 3Q ◆ Healthcare Segment [Compared with FY2020 9 months ]Sales of FEBURIC®, the main product, and the home healthcare device rental remained strong, while sales of diabetes treatments, for which we had taken over the sales rights, also remained robust. There was licensing income◼ Pharmaceuticals -Sales of the four type-2 diabetes treatments remained robust-Sales of FEBURIC*1 and Somatuline*2 grew steadily-There was licensing income-Licensing income came from Merck & Co., Inc.(U.S.) in December 2021 with the start of clinical trials of Alzheimer’s disease drug candidates◼ Home healthcare-HOT: Restrictions on hospitalization for securing beds for COVID-19 patients resulted in a continued shift to home healthcare and an increase in the number of rented HOT equipment units-CPAP: The number of rented CPAP devices continued to grow, since the number of patients undergoing examinations recovered gradually even amid COVID-19 waves(Billions of Yen)FY209 monthsVolumeSales price and mixOthersFY219 monthsDrug price revisions◼ New healthcare-1.5+1.6+23.0(+) Licensing income, etc.(-) Cost increase caused by increased sales activities (+15.1)57.9(+23.1)34.8Japan: +24.5 (diabetes treatments, FEBURIC, CPAP devices, etc.); overseas: −0.5-In the orthopedic implantable device business, which encompasses artificial joints and absorbable osteosynthesis materials, the number of surgical operations was recovering, and sales of new and other products consistently increased*1 Hyperuricemia and gout treatment drug*2 Acromegaly and pituitary gigantism, gastroenteropancreatic neuroendocrine tumors treatment drugSomatuline® is the registered trademark of Ipsen Pharma, France*3 Upper and lower limb spasticity treatment drug9(Billions of Yen)Net sales119.2111.9139.6+27.7EBITDA38.134.857.9+23.1Depreciation &Amortization9.08.920.4+11.5Operating income29.125.837.4+11.6ROIC46%43%23%-20%FY199 months(Apr.-Dec.)Difference(vs FY209 months)FY209 months(Apr.-Dec.)FY219 months(Apr.-Dec.)1. Results of FY2021 3Q◆ Fibers & Products Converting Segment [Compared with FY2020 9 months ]* Includes a decrease due to the application of the new standards for revenue recognition under Japan GAAP◆ IT Segment [Compared with with FY2020 9 months ]*◼ Fibers & Products Converting Segment-Industrial textiles and materials: Sales of automotive parts and short polyester fibers for water treatment filters were good, but the semiconductor shortage had an impact late in 3Q-Fiber materials and apparel: There was a difficult environment due to overseas plant shutdowns and the sharp rise in raw material and fuel prices and logistics costs, despite a recovery in sales of materials and products for the European, North American, and Chinese markets and sales of heavy clothing in the Japanese market-Governmental demand for medical gowns fell-Basic profitability increased through the concentration on certain selected businesses, and restricted business activities helped decrease SG&A expenses◼ IT Segment-In the IT service field, sales remained strong despite the lasting impact of the COVID-19 pandemic. In the Internet business field, profit was secured by optimizing advertising costs despite the continuous impact of piracy websites on e-comics services◼ Others: Japan Tissue Engineering Co., Ltd. (“J-TEC”), and others-Both sales of the autologous cultured epidermis JACE, the autologous cultured cartilage JACC, and the autologous cultured corneal epithelium NEPIC in the regenerative medicine business and sales in the R&D support business increased and remained strong-The autologous cultured oral mucosal epithelium Ocural*, for which J-TEC obtained manufacturing and marketing approval in June 2021, started to be listed in health insurance coverage in Japan in December 2021-Clinical trials of allogeneic cultured epidermis started in November 2021*The world’s first regenerative medical product that uses oral mucosal epithelial cells to treat limbal stem cell deficiency10(Billions of Yen)Net sales231.4237.1206.9-30.2EBITDA9.421.09.3-11.7Depreciation &Amortization5.24.74.8+0.0Operating income4.216.34.5-11.8ROIC4%17%5%-12%FY209 months(Apr.-Dec.)FY219 months(Apr.-Dec.)Difference(vs FY209 months)FY199 months(Apr.-Dec.)(Billions of Yen)Net sales34.342.339.9-2.4EBITDA6.17.57.7+0.2Depreciation &Amortization0.60.60.9+0.3Operating income5.56.96.8-0.1ROIC46%58%58%+0%Difference(vs FY209 months)FY199 months(Apr.-Dec.)FY209 months(Apr.-Dec.)FY219 months(Apr.-Dec.)1. Results of FY2021 3Q◆ Non-operating items [Compared with FY2020 9 months ]◆ Extraordinary items [Compared with with FY2020 9 months ]** The equity in earnings of affiliates increased due to the strong performance of joint venture of aramid-paper11(Billions of Yen)FY209 months(Apr.-Dec.)FY219 months(Apr.-Dec.)DifferenceInterest income0.50.3-0.2Dividends income1.01.0-0.0Equity in earnings of affiliates1.94.3+2.5Gain on valuation of derivatives0.32.5+2.2Others1.10.8-0.2Non-operating income, total4.89.0+4.3Interest expenses2.12.4+0.2Foreign exchange losses1.51.4-0.1Loss on valuation of derivatives1.80.4-1.4Others1.81.7-0.0Non-operating expenses, total7.25.9-1.3Non-operating items, total(2.4)3.2+5.5(Billions of Yen)FY209 months(Apr.-Dec.)FY219 months(Apr.-Dec.)DifferenceGain on sales of noncurrent assets1.80.1-1.7Gain on sales of investment securities0.55.3+4.9Gain on step acquisitions2.0–2.0Others0.00.2+0.2Extraordinary income, total4.35.6+1.3Loss on sales and retirement ofnoncurrent assets0.71.3+0.5Loss on valuation of investmentsecurities1.5–1.5Impairment loss0.41.9+1.4Others0.80.2-0.5Extraordinary loss, total3.43.4-0.0Extraordinary items, total0.82.2+1.41. Results of FY2021 3Q◆ Financial position [Compared with the end of FY2020]◆ Cash flows [Compared with FY2020 9 months]*1Note: Cash flows fall outside the scope of quarterly results reporting under the Financial Instruments and Exchange Act.◇ Changes in total assets◇ BS exchange rate*2*2*1 D/E ratio taking into account the equity credit of the subordinated bonds(The Company issued subordinated bonds of 60.0 billion yen on July 21, 2021.)*2 Including an increase in intangible fixed assets (132.4 billion yen) due to the takeover of the salesrights for diabetes treatments and other related assets12(Billions of Yen)(Billions of Yen)Total assets1,041.11,175.7+134.6+12.1Operating activities68.763.8-4.9Liabilities610.8720.9+110.2+4.7Investing activities(49.3)(179.8)-130.5[Interest-bearing debt]380.0472.9+92.8+2.9Free cash flow19.4(116.0)-135.4Net assets430.4454.8+24.4+7.4Financing activities(24.7)76.2+100.9D/E ratio0.941.10+0.16-Net inc/dec in Cash &cash equivalents(5.3)(39.8)-34.5D/E ratio (capital adjustment)-0.96–(Billions of Yen)Cash and deposits, etc.170.2130.4-39.8Trade receivables181.0193.8+12.8Inventory assets141.0159.1+18.1361.3497.0+135.684.886.4+1.6Others102.7109.0+6.3Total assets1,041.11,175.7+134.6Investment securitiesMar. 31,2021Dec. 31,2021DifferenceTangible and intangible assetsFY219 months(Apr.-Dec.)DifferenceMar. 31,2021Dec. 31,2021Difference(Impact offoreignexchange rate)FY209 months(Apr.-Dec.)Mar. 31,2021Dec. 31,2021Yen/US$111115Yen/Euro1301312. Outlook for FY2021132. Outlook for FY2021◆ Outlook highlights [Compared with FY2020 and FY2021 Previous Outlook*][Year on year]• We forecast that net sales will increase mainly due to recovery from COVID-19 impacts and the effects of the takeover of sales of the diabetes treatments, and that operating income will decrease mainly due to the cost increase and semiconductor shortage in the Materials Business Field and shrink of medical gown demand in Fibers and Products Converting segment[Compared with the previous forecast]• Our consolidated annual forecast has been revised downward in consideration of an operating loss in the Materials Business Field for 3Q caused by factors such as semiconductor shortage and the sharp rise in raw material and fuel prices and production shutdown due to plant power outages in the aramid business, despite continuously strong sales in the Healthcare Business Field• Our forecast for profit attributable to owners of parent has been revised downward in the wake of the downward revision of the operating income forecast, but no change has been made to the FY2021 annual dividend forecast(Billions of Yen)vs FY2020vs FY2021 Previous Outlook*Net Sales+11.2%+3.3%900.0836.5930.0Operating Income-9.0%-16.7%54.960.050.0FY20FY21PreviousOutlook*FY21OutlookFY20FY21PreviousOutlook*FY21OutlookAssumptionsProfit Attributable to Owners of Parent Return to profitability-8.6%35.032.0-6.7FY20FY21PreviousOutlook*FY21OutlookDividend forecast for FY2021 : No changes from previous outlook*Interim 27.5 yen/share(Decided) Year-end 27.5 yen/share Annual 55 yen/share （FY2020 : Interim 25 yen/share Year-end 25 yen/share Annual 50 yen/share)*Announced on November 8, 202114FY20ActualFY21PreviousOutlook*FY21OutlookYen/US$106112112Yen/Euro124132130An average Dubai crude oil price (US$/barrel)447575Full-term average exchange rate 2. Outlook for FY2021◆ Summary of outlook for FY2021 highlights [Compared with FY2020 and FY2021 Previous Outlook*]*6*7*8*8**6*7*8*8*5*1 ROE= Profit attributable to owners of parent / Average* total shareholders’ equity*2 ROIC based on operating income = Operating income / Average* invested capital (Invested capital = Net assets + Interest-bearing debt – Cash and deposits)*Average: ([Beginning balance + Ending balance] / 2) *3 EBITDA = Operating income + Depreciation & amortization*4 CAPEX includes investments in intangible assets (excludes M&A)*5 Including goodwill amortization*6 Includes a decrease due to the application of the new standards for revenue recognition under Japan GAAP*7 The calculated beginning balance of invested capital includes an increase due to the takeover of the sales rights for diabetes treatments and other related assets*8 Including an increase in intangible assets (132.4 billion yen) due to the takeover of the sales rights for diabetestreatment drugs and other related assets*Announced on November 8, 202115(Billions of Yen)FY20FY21OutlookDiffer-ence%ChangeFY21PreviousOutlookDiffer-ence%ChangeNet sales836.5930.0+93.5+11.2%900.0+30.0+3.3%Operating income54.950.0-4.9-9.0%60.0-10.0-16.7%Ordinary income53.753.0-0.7-1.2%60.0-7.0-11.7%Profit attributable to owners of parent (6.7)32.0+38.7-35.0-3.0-8.6%ROE*1(1.7%)8%+10%8%0%ROIC *28.6%6%-3%7%-1%EBITDA*3106.8120.0+13.2130.0-10.0Free cash flow28.1(120.0)-148.1(130.0)+10.0CAPEX*460.3210.0+149.7210.00.0Depreciation & Amortization51.870.0+18.270.00.0R&D Expenses32.734.0+1.334.00.02. Outlook for FY2021◆ Net sales and operating income by segment [Compared with FY2020, and FY2021 Previous Outlook* ]***1*1*1*1*1 Includes a decrease due to the application of the new standards for revenue recognition under Japan GAAPTrends behind the operating income forecastCompared with FY2020Compared with FY2021 Previous Outlook*ConsolidatedOperating income will decreaseThe forecast for operating income has been revised downward-Materials-Healthcare-Fibers &Products Converting-ITThe semiconductor shortage, the sharp rise in raw material and fuel prices, and production shutdowns in a business area will have an adverse impactFurther hike of raw material and fuel prices, further semiconductor shortage and production shutdowns in a business areaSales of current main products will remain strong, and sales of diabetes treatment drugs will also be robustSales of current main products will remain strong. There was licensing income in 3QThe convergence of governmental demand for medical gowns will have a major impactSlow recovery in the apparel market, power restrictions in China, the sharp rise in raw material and fuel prices and logistics costs, etc. will have an adverse impactPiracy websites impact will be offset by advertising cost savingPiracy websites will have a growing impact on e-comics services*Announced on November 8, 202116(Billions of Yen)(Billions of Yen)FY20FY21OutlookDifference%ChangeFY21PreviousOutlookDifferenceFY20FY21OutlookDifference%ChangeFY21PreviousOutlookDifferenceNet salesOperating income (loss)Materials297.0390.0+93.0+31.3%375.0+15.0Materials1.0(2.0)-3.0-8.0-10.0Healthcare148.7185.0+36.3+24.4%180.0+5.0Healthcare31.544.5+13.0+41.2%42.0+2.5Fibers & Products Converting314.9280.0-34.9-11.1%265.0+15.0Fibers & Products Converting17.56.0-11.5-65.7%8.0-2.0IT58.155.0-3.1-5.4%60.0-5.0IT10.49.5-0.9-8.7%10.0-0.5Others17.820.0+2.2+12.1%20.00.0Others(0.2)(2.0)-1.8-(2.0)0.0Total836.5930.0+93.5+11.2%900.0+30.0Elimination and Corporate(5.2)(6.0)-0.8-(6.0)0.0Total54.950.0-4.9-9.0%60.0-10.02. Outlook for FY2021◆ Materials Segment [Compared with FY2020, and FY2021 Previous Outlook* ]*FY20VolumeSpreadOthers(Billions of Yen)FY21outlook-2.5(+) Resin(-) Aramid, composites-16.5+18.0Aramid, composites, carbon fibers31.5Cost increase caused by the recovery of business activities30.5(-1.0)SubsegmentAramidResinCarbon fibersCompositesTrends behind the operating income forecastCompared with FY2020Compared with FY2021 Previous Outlook*（Main factor of difference）• Large-scale periodic maintenance and its extension had an adverse impact. The price of natural gas is rising sharply• Power outages at raw material plants have caused a production decline, resulting in tight inventories• Selling prices have been revised in response to the sharp rise • The price of natural gas is rising sharply• Power outages at raw material plants have caused a production decline, resulting in tight inventories• The decline in customers’ operations due to the semiconductor shortage will have a • The semiconductor shortage and the power shortage in China more widespread impact than expectedin raw material priceswill have impacts• Stronger sales mainly for aircraft applications than expected• Demand will remain strong mainly for products for aircraft applications as expected• The decline in automotive production due to the semiconductor shortage that has reduced demand for our products• Raw material prices will continue to rise, and selling prices will be revised• Due to continuous labor shortage, labor costs remain high• The semiconductor shortage will have a more widespread impact than expected• The rise in raw material prices will have a slightly more widespread impact than • The effects of price raise and other profit improvement measures will appear from expected4Q*Announced on November 8, 202117(Billions of Yen)1H2HTotalNet sales High-performance materials210.4139.6135.4275.0+64.6265.0+10.0 Composites86.651.263.8115.0+28.4110.0+5.0 Total297.0190.8199.2390.0+93.0375.0+15.0EBITDA31.518.012.530.5-1.040.5-10.0Depreciation & Amortization30.614.717.832.5+1.932.50.0Operating income1.03.3(5.3)(2.0)-3.08.0-10.0ROIC0%2%(3%)(1%)-1%3%-4%FY20 DifferenceFY21 OutlookDifference( vs FY20)FY21PreviousOutlook2. Outlook for FY2021◆ Changes in operating income by Materials segment⚫ In 3Q, operating income got significantly worse due to further raw material and fuel price surge and more widespread semiconductor shortage as well as power outage in the aramid*(Billions of Yen)Operating income trend for Material business2.11.22.8-8.1FY213QFY214Qoutlook⚫ In 4Q, operating income will be drastically improved by customer price increase, realizing profit improvement measures as well as resolution of the temporally power outage issue occurred in 3Q.FY211QFY212QOperating income quarterly trend2Q vs 3Q3Q vs 4Q forecastSubsegmentAramid• Natural gas prices have risen further• Power outages at raw material plants have caused a production decline, resulting in tight inventories• The impact of power outages at raw material plants in 3Q will be mitigated• Fuel prices will rise further, but the effects of price raise will also appearResin• Impact of the gap in carry-over stock at the beginning • A raw material price decrease will cause a selling price decline (the • The semiconductor shortage and the power shortage in • The impact of the gap in carry-over stock at the beginning of the year spread will be maintained)will be mitigatedCarbon fibers• Launch cost and depreciation expense for the North • Sales increase driven by firm demand• Start commercial production in the North America new factoryComposites• Further semiconductor shortage• Raw material prices have risen further• Due to continuous labor shortage, labor costs remain high• Reduced customer demand for our products due to the semiconductor shortage will gradually recover• Raw material prices will continue to rise• The effects of price raise and other profit improvement measures will of the yearChina had impactsAmerica new factoryappear182. Outlook for FY2021◆ Teijin Automotive Technologies (U.S.): Profit Improvement Measures and Their ProgressAdverse external factorsForecastRise in raw material pricesRaw material prices will continue to remain high until at least the first half of FY2022Customer demand decline due to the semiconductor shortageIt is predicted that the situation will improve gradually from 4Q, and that demand for products of the main programs will return to normal in FY2022Labor shortage due to increased federal unemployment benefitsThe labor shortage is improving gradually, and it is predicted that necessary plant labor force will be secured in the first half of FY2022Profit improvement measureWhen the effects will appearProgressPrice raises (passing on the raw material cost rise to selling prices)FY2021 4QEstablishment of new more profitable programsFY2021 4Q•••••Negotiations for price raises were concluded smoothly in FY2021 3QA new more profitable large-scale program has been established at the new Texas plant(it will start full-scale operation in FY2021 4Q)Establishment of new more profitable programs is planned for FY2022 and laterAutomated presses have been introduced to major plants, and are planned to be introduced to other plantsThe new Texas plant has already introduced automated presses, and they are planned to be introduced to other new plantsAutomation of pressing machines(reduction of necessary personnel*, and productivity improvement)FY2021 4Q(Year-round effects will be worth about one billion yen)Shift to in-house coating processes(lower cost than outsourcing, and improvement of quality and productivity)FY2021 4Q(Year-round effects will be worth about one billion yen)• Main plants have shifted to in-house coating processes•Use of the same measure in other plants is also planned* This measure is expected to help reduce the number of necessary press operators by 30 to 50%192. Outlook for FY2021◆ Healthcare Segment [Compared with FY2020, and FY2021 Previous Outlook* ]FY20Volume*(Billions of Yen)FY21outlookSales price and mix-1.5Others+0.8Mainly due to the impact of drug price revisions+29.0(+) Temporal licensing income(-) Rise in SG&A expenses caused by a sales volume increase, as well as upfront investments72.0(+28.3)43.7Diabetes products, FEBURIC ,etc.SubsegmentPharmaceuticalsHome healthcareTrends behind the operating income forecastCompared with FY2020Compared with FY2021 Previous Outlook*（Main factor of difference）• Contribution of sales of diabetes treatment drugs• The volumes of FEBURIC® , Somatuline®, XEOMIN®, HOT devices and CPAP devices will increase• FEBURIC® and XEOMIN® will remain strong• Temporal licensing income in 3Q• Cost will decreaseNew healthcare• Steady growth in sales of new artificial hip joint • No changeproducts*Announced on November 8, 202120(Billions of Yen)1H2HTotalNet sales148.790.794.3185.0+36.3180.0+5.0EBITDA43.737.534.572.0+28.369.5+2.5Depreciation & Amortization12.213.613.927.5+15.327.50.0Operating income31.524.020.544.5+13.042.0+2.5ROIC41%21%18%20%-21%19%+1%FY20 Difference(vs FY20)FY21PreviousOutlookDifferenceFY21 Outlook2. Outlook for FY2021Factors of changes in EBITDA forecast in FY2021 [Compared with FY2020]◼ EBITDA will increase mainly due to the contribution of the diabetes treatments to the business performance of the Healthcare Business Field, despite the semiconductor shortage and sharp rise in raw material and fuel prices in the Materials Business Field and the end of emergency demand for medical gowns in the Fibers & Products Converting Business（Billions of Yen）FY2020VolumeSpread*3OthersEBITDA*1Compared with FY2020MaterialsHealthcareF&P Converting ITOthers*2106.831.543.723.911.3-3.6-2.0-18.8+34.0(+) Resin, etc.(-) Aramid, composites, etc.Increase in Fixed-cost and SG&A expenses caused by a sales increase and a recovery in economic activities(+) Pharmaceuticals, aramid, composites, carbon, etc.(-) Fibers and Products Converting, etc.FY2021Outlook120.0(+13.2)30.572.012.511.0-6.0*1EBITDA = Operating income + Depreciation & amortization *2“Others” denotes the total of “Others” and “Elimination and Corporate” *3 Sales price and mix + raw material and fuel cost213. Supplementary information223. Supplementary information Factors that affect income statement regularlySegmentMajor factor• Aramid: large-scale periodic maintenance in FY2021 1Q (once in Materialsthree years)• Polycarbonate resin: periodic maintenance in 2Q & 3Q every yearHealthcare• Cost increase in 4Q• Temporal licensing income/outgoFibers & Products Converting • Fiber materials and apparel: 3Q is a season for sales of autumn/winter closing, and 4Q for spring closingIT• Delivery increase in 2Q and 4Q due to system acceptance period233. Supplementary information (Results of FY2021 3Q) ◆ Changes in EBITDA* (consolidated total) [Compared with FY2020 9 months]*FY209 monthsVolumeSales price and mixRaw material and fuel costOthers+33.0-40.0+29.5-17.0EBITDA*Compared with FY20 9 months 83.8(Billions of Yen)FY219 months89.3(+5.4)* EBITDA = Operating income + Depreciation & amortization 24(Billions of Yen)Net sales647.5609.7687.0+77.3EBITDA86.283.889.3+5.4Depreciation &Amortization38.038.651.1+12.5Operating income48.245.238.2-7.1ROIC9.7%9.3%6.4%-2.9%FY199 months(Apr.-Dec.)FY219 months(Apr.-Dec.)FY209 months(Apr.-Dec.)Difference(vs FY209 months)3. Supplementary information (Results of FY2021 3Q) ◆ Consolidated statements of income25(Billions of Yen)1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3QApr.-Jun.Jul.-Sep.Oct.-Dec.Jan.-Mar.Apr.-Jun.Jul.-Sep.Oct.-Dec.Jan.-Mar.Apr.-Jun.Jul.-Sep.Oct.-Dec.Net Sales214.6221.4211.4206.3179.1215.0215.6226.8225.9227.5233.6Cost of sales147.0153.4146.1143.8119.4148.4152.2161.4155.0158.7169.9Gross profit67.768.065.362.459.766.663.465.370.968.863.8SG&A50.751.250.954.447.148.149.255.653.654.657.1Operating income17.016.814.58.012.618.514.29.717.314.26.7Non-operating items, net(0.1)(0.6)(0.1)(1.1)(0.1)(0.7)(1.5)1.11.2(0.0)2.0 (Balance of financial expenses)(0.1)(0.5)(0.4)(0.4)(0.1)(0.3)(0.2)(0.2)(0.2)(0.5)(0.4) (Equity in earnings and losses of affiliates)0.40.70.20.80.21.20.50.71.51.41.4Ordinary income16.916.214.46.912.417.812.610.818.414.28.7Extraordinary items (net)(1.8)(2.3)0.6(9.3)(1.4)(1.1)3.3(45.1)(1.9)3.40.8Income before income taxes 15.113.915.0(2.4)11.016.716.0(34.3)16.517.69.4Income taxes4.03.74.72.14.85.74.4(1.3)6.15.14.5Profit attributable to non-controlling interests0.30.50.50.40.50.70.70.50.70.70.710.89.79.7(4.9)5.710.310.8(33.5)9.811.84.3Profit attributable to owners of parentFY20FY21FY193. Supplementary information (Results of FY2021 3Q) ◆ Consolidated balance sheets26(Billions of Yen)Jun. 30,2019Sep. 30,2019Dec. 31,2019Mar. 31,2020Jun. 30,2020Sep. 30,2020Dec. 31,2020Mar. 31,2021Jun. 30,2021Sep. 30,2021Dec. 31,2021Total assetsCurrent assets511.6525.5528.0505.3502.6513.1507.4534.6538.9551.7553.7Fixed assets491.0505.2513.9498.9502.4505.5513.3506.6646.1617.1622.0Total1,002.61,030.71,041.91,004.21,004.91,018.51,020.71,041.11,185.01,168.81,175.7Liabilities586.0610.3606.5592.8588.0583.7574.4610.8743.9718.2720.9[Interest-bearing debt]374.3407.6398.2381.9391.4387.3362.8380.0502.9482.8472.9Net assets416.6420.4435.4411.4416.9434.8446.3430.4441.1450.6454.8Total1,002.61,030.71,041.91,004.21,004.91,018.51,020.71,041.11,185.01,168.81,175.7Total liabilities and net assetsFY19FY21FY203. Supplementary information (Outlook for FY2021) ◆ Changes in net sales and operating income by segment27(Billions of Yen)1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4QApr.-Jun.Jul.-Sep.Oct.-Dec.Jan.-Mar.Apr.-Jun.Jul.-Sep.Oct.-Dec.Jan.-Mar.Apr.-Jun.Jul.-Sep.Oct.-Dec.Jan.-Mar.Net salesHigh-performance materials63.362.455.655.0236.443.847.654.464.7210.469.370.366.369.0275.0Composites22.823.122.922.491.210.124.825.226.486.626.424.827.436.4115.0Materials Total86.185.478.677.4327.553.972.479.691.0297.095.895.093.7105.5390.0Healthcare39.839.140.334.7153.936.236.938.836.8148.745.944.948.845.4185.0Fibers & Products Converting73.880.477.274.9306.371.686.579.077.8314.965.568.073.473.1280.0IT10.912.211.214.348.613.515.013.715.858.113.513.712.615.155.0Others4.04.24.15.017.43.94.24.55.317.85.25.85.13.820.0Total214.6221.4211.4206.3853.7179.1215.0215.6226.8836.5225.9227.5233.6243.0930.0Operating income (loss)Materials5.64.62.92.815.8(1.4)0.90.21.31.02.11.2(8.1)2.8(2.0)Healthcare10.58.99.73.432.68.77.89.35.731.513.210.813.57.144.5Fibers & Products Converting1.01.81.41.25.45.17.63.61.217.52.01.60.91.56.0IT1.32.31.92.37.82.02.72.13.510.42.12.72.12.79.5Others(0.0)0.3(0.1)0.20.3(0.4)0.10.2(0.1)(0.2)(0.3)(0.6)(0.3)(0.7)(2.0)Elimination and Corporate(1.4)(1.1)(1.3)(1.9)(5.8)(1.4)(0.6)(1.3)(1.9)(5.2)(1.9)(1.3)(1.4)(1.4)(6.0)Total17.016.814.58.056.212.618.514.29.754.917.314.26.711.850.0TotalFY21 OutlookFY19FY20TotalTotal3. Supplementary information (Outlook for FY2021) ◆ Changes in net sales and operating income by segment [Compared with FY2020 ]28(Billions of Yen)1H2HTotal1H2HTotal1H2HTotalNet salesHigh-performance materials91.4119.1210.4139.6135.4275.0+48.3+16.3+64.6Composites35.051.686.651.263.8115.0+16.2+12.2+28.4Materials Total126.3170.6297.0190.8199.2390.0+64.5+28.5+93.0Healthcare73.075.6148.790.794.3185.0+17.7+18.6+36.3Fibers & Products Converting158.1156.8314.9133.5146.5280.0-24.6-10.3-34.9IT28.629.658.127.327.755.0-1.3-1.8-3.1Others8.19.717.811.09.020.0+2.9-0.8+2.2Total394.1442.4836.5453.4476.6930.0+59.2+34.2+93.5Operating income (loss)Materials(0.5)1.51.03.3(5.3)(2.0)+3.8-6.8-3.0Healthcare16.515.031.524.020.544.5+7.5+5.5+13.0Fibers & Products Converting12.74.817.53.62.46.0-9.1-2.4-11.5IT4.85.610.44.84.79.5+0.0-0.9-0.9Others(0.3)0.1(0.2)(1.0)(1.0)(2.0)-0.6-1.2-1.8Elimination and Corporate(2.0)(3.2)(5.2)(3.2)(2.8)(6.0)-1.2+0.4-0.8Total31.123.854.931.518.550.0+0.4-5.3-4.9FY2020FY2021 OutlookDifference3. Supplementary information (Outlook for FY2021) ◆ Key financial indicators by segment[Compared with FY2020, and FY2021 Previous Outlook* ]**3*3*3*3*1 EBITDA = Operating income + Depreciation & amortization*2 ROIC based on operating income = Operating income / Average* invested capital (Invested capital = Net assets + Interest-bearing debt – Cash and deposits)*Average: ([Beginning balance + Ending balance] / 2) *3 The calculated beginning balance of invested capital includes an increase due to the takeover of the sales rights for diabetes treatments and other related assets*Announced on November 8, 202129(Billions of Yen)EBITDA*1Materials31.530.5-1.040.5-10.0Healthcare43.772.0+28.369.5+2.5Fibers & Products Converting23.912.5-11.414.5-2.0IT11.311.0-0.311.5-0.5Others0.70.0-0.70.00.0Elimination and Corporate(4.3)(6.0)-1.7(6.0)0.0Total106.8120.0+13.2130.0-10.0ROIC*2Materials0%(1%)-1%3%-4%Healthcare41%20%-21%19%+1%Fibers & Products Converting14%5%-9%6%-1%IT66%65%-1%67%-2%Total8.6%6%-3%7%-1%DifferenceFY21OutlookDifferenceFY20FY21PreviousOutlook3. Supplementary information (Outlook for FY2021) ◆ Historical financial indicators*8**Including a commemorative dividend of 10 yenper share for our founding centennial*1 ROE= Profit attributable to owners of parent / Average* total shareholders’ equity*2 ROIC based on operating income = Operating income / Average* invested capital( Net assets + Interest-bearing debt – Cash and deposits )*Average: ([Beginning balance + Ending balance] / 2)*3 EBITDA = Operating income + Depreciation & amortization*4 Reflecting the impact of the consolidation of shares*5 D/E ratio = Interest-bearing debt / Total shareholders’ equity (Gross) *6 D/E ratio taking into account the equity credit of the subordinated bonds(The Company issued subordinated bonds of 60.0 billion yen on July 21, 2021.)*7 Teijin has adopted the “Partial Amendments to Accounting Standard for Tax Effect Accounting, etc.” (ASBJ Statement No. 28, February 16, 2018) from FY2018. Results for FY2017 have been adjusted to reflect the retrospective application of the new accounting standard.*8 The calculated beginning balance of invested capital includes an increase due to the takeover of the sales rights for diabetes treatments and other related assets30FY16FY17FY18FY19FY20FY21ActualActual*7ActualActualActualOutlookROE*115.7%12.5%11.2%6.3%(1.7%)8%ROIC *210.0%11.2%9.3%8.7%8.6%6%EBITDA *3 (Billions of Yen)95.8115.5107.6107.2106.8120.0Earnings per share*4 (Yen)254.9231.3232.4131.6(34.7)166.6Dividends per share*4 (Yen)556070605055Total assets (Billions of Yen)964.1982.01,020.71,004.21,041.11,170.0Interest-bearing debt (Billions of Yen)376.2344.2369.2381.9380.0490.0D/E ratio *51.110.880.900.970.941.1D/E ratio (capital adjustment) *6—–1.0Shareholders’ equity ratio35.1%40.0%40.2%39.3%39.0%37%3. Supplementary information ◆ Sales of principal pharmaceuticals in Japan ProductTarget diseaseFEBURIC®Nesina®Inisync®Hyperuricemia and goutType 2 DiabetesType 2 DiabetesBonalon®*1OsteoporosisSomatuline®*2Venilon®Liovel®Acromegaly and pituitary gigantism, gastroenteropancreatic neuroendocrine tumorsSevere infectionType 2 DiabetesZafatek®Type 2 DiabetesMucosolvan®ExpectorantLOQOA®osteoarthritis pain and inflammationOnealfa®OsteoporosisXEOMIN®Upper and lower limb spasticity (Billions of Yen)1QApr.-Jun.2QJul.-Sep.FY20203QOct.-Dec.4QJan.-Mar.Total1QApr.-Jun.FY20212QJul.-Sep.3QOct.-Dec.9 months8.78.99.68.3 35.69.710.629.91.31.31.41.25.21.31.31.54.2–2.1–2.1–2.3–1.8–8.31.4–0.60.50.31.2–0.50.60.31.4–0.70.50.31.0–0.50.50.25.0–2.22.11.09.63.62.12.01.21.20.70.50.50.23.32.02.01.21.00.60.50.50.30.23.52.12.110.46.26.11.31.10.70.70.60.40.43.73.32.01.81.60.90.6*1 Bonalon® is the registered trademark of NV Organon, Netherlands.*2 Somatuline® is the registered trademark of Ipsen Pharma, France.31– 0.01 0.03 0.040.053. Supplementary information ◆ Non-financial Information : ESG External EvaluationSelected as a component stock of all four ESG indices of GPIFTHE INCLUSION OF TEIJIN LIMITED IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF TEIJIN LIMITED BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.Status of inclusion in SRI indicesTeijin Limited has been highly rated in the Nikkei SDGs Management Survey and ranked 35th among the surveyed major Japanese companies in the general rankings••Rated “S” or higher in all four categoriesRanked among the top 10 in all industries (with a deviation value of 70 or higher) in the “Governance” categoryIncluded in these two domestic programsas a company with outstanding ESG initiatives “Nadeshiko”Encouraging women’s success in the workplacePromoting health and productivity management 32