Tokyo Ohka Kogyo Co., Ltd.

I am Taneichi, the president of the company. Thank you for joining us in our discussion session. Now, I would like to begin our discussion session based on the materials we have at hand. According to the table of contents, the second half of December, 2023, will explain the results of the December fiscal year 2023, the second half of the fiscal year, and the forecast for the fiscal year of December 2023. Finally, I will explain the progress of the TOK medium-term plan for 2024. First, I will explain the summary of the fiscal year this year and this slide. This year, due to the rapid cooling of the semiconductor market, Kami-Ki announced its expected results in February of this year. On July 28, it announced the results of this year's Kami-Ki and the expected results of this year's Kami-Ki. In response to these demands, The starting point of the sales volume of this fiscal year is 7.76 billion yen, which is the annual revenue of 7.7 billion yen. The operating profit is 10.9 billion yen, which is the annual revenue of 3.9 billion yen, which is the annual revenue of 3.9 billion yen, which is the increase in sales volume and expenses. On the other hand, we predict that we will be in the second half of the year when we will be able to solve the real-time stock adjustment of semiconductors. We expect to recover some of the market by introducing new devices such as AI for generation and smartphones. Based on these assumptions, As a result of the analysis of the results of the Kami period, we have adjusted the sales value of 16.4 billion yen to 23.5 billion yen, which is the current sales value expected to be the current revenue from the previous year. As for the return on investment, we have adjusted it to a stable and continuous In order to achieve a return on profit, we established a joint net asset return rate, or DOE, based on the return policy aiming at 4.0%. The intermediate return amount is 82 yen. The end return is also expected to be 82 yen, and the annual return is expected to be 164 yen. Now, I would like to explain each of the details. First of all, I would like to introduce the segment meeting of our Group. As announced in September last year, this year, on March 1st, we made the device business a business for i-MECATEC. We will continue to provide information in the product segment that we will show you in the future. Now, I will explain the results of this year's paper machine. The sales volume of this year's paper machine is 7.76 billion yen, which is a decrease of 7.0 billion yen last year. This is 7.7 billion yen, which is a decrease of The company has made significant improvements in terms of photoregistration for semiconductor microprocessors and share improvement in semiconductor post-processing materials, but the company's expectations have been greatly exceeded, resulting in a strong impact on the semiconductor market due to a sudden break in the market. In addition, the company's operating profits The previous year's revenue was 3.9 billion yen, and now it is 10.9 billion yen. This is because the sales volume has decreased, and due to the increase in the number of employees who are expected to be needed in the future, the cost of human resources has increased. The exchange rate average is 1.122.20 yen per dollar, The net profit of the first half of the year was 5.3 billion yen, which is a large sum of ¥134.20. The net profit of the first half of the year was 5.3 billion yen, which is a large sum of ¥134.20. The net profit of the first half of the year was 5.3 billion yen, which is a large sum of ¥134.20. The net profit of the first half of the year was 5.3 billion yen, which is a large sum of ¥134.20. The net profit of the first half of the year was 5.3 billion yen, which is a large sum of ¥134.20. The net profit of the first half of the year was 5.3 billion yen, which is a large sum of ¥134.20. Today, I would like to explain the situation of the Kami-Ki project. First of all, regarding the electronics functional materials, in the case of cutting-edge materials and packaging materials, we saw the effect of the share improvement, but due to the deterioration of the market environment, the progress rate for the basic project was 88%. In addition, high-priced chemical drugs have been strongly recommended for the market in China and other advanced markets, but in addition to the fact that the rate of improvement in many other regions has decreased, the impact of the delay in the operation of new factories has increased, and the progress rate of the basic plan has reached 86%. In terms of operating profits, we achieved a growth rate of about 74% due to the impact of the increase in expenses and the decrease in sales volume that exceeded our expectations. Next, I would like to explain the type of sales composition of the electronics functional materials of Kami-Ki. The legacy materials that are made up of G-SEN and i-SEN resist are minus 10% per year, and KRF resist is minus 5%. On the other hand, the cutting-edge materials including ARF and EUV resist are on the same level as the previous year. As for the EUV resist, it was a plus in the previous year due to the effect of the new use, but in the ARF resist, it was a minus due to semiconductor production. In addition, the semiconductor post-processing related material is a minus 15% in the previous year. The package register, which is one of the components, is at minus 15%. The MEMS material is at minus 30% and is also at minus growth, but the WHS-related material is at plus 20%. As a result, the WHS-related material As you can see, the cost of each product is as follows. Next, I would like to explain the increase and decrease of operating profit. The operating profit of the paper machine in 2022 was 1,460,000 yen, excluding the equipment business tax, I would like to explain the cost of 37 billion yen. Due to the impact of semiconductor production, the cost of electronics functional materials and high-priced chemical drugs has decreased, resulting in a cost of 260 billion yen. Next, the sum of the cost-benefit ratio and the cost-to-decrease adjustment was 1.2 billion yen. Finally, in terms of the cost-increase ratio, in addition to the increase in the cost-to-decrease ratio and the cost-to-development ratio, The increase in labor costs due to the increase in labor costs due to the increase in labor costs due to the increase in labor costs due to the increase in labor costs due to the increase in labor costs due to the increase in labor costs due to the increase in labor costs due to the increase in labor costs due to the increase in labor costs due to the increase in labor costs due to the increase in labor costs due to We have estimated a loss of 1.7 billion yen. Next, I would like to explain the performance forecast for December 2023. As for the performance forecast for the second quarter, we announced a correction of the performance forecast on July 28, so I will explain it based on the correction. The sales volume is expected to be minus 12.5% from the initial estimate and 1,640 billion yen, which is a decrease of 1.14 billion yen in previous year's budget. The semiconductor production adjustment has been in progress, but the demand for AI generation, We are also starting to introduce the latest smartphone models, and we are starting to get a sense of the bottom line through the entire market. We are guessing that the recovery of the market will shift to the second half of the year, but we believe that recovery movements will occur in some parts of the tip semiconductor. We expect the recovery of semiconductor post-processing materials in our products, and the recovery of semiconductor post-processing photoregist in the second half of the year. As for sales, we expect sales to increase compared to the previous year, but since sales did not reach the level of last year, is expected to reach 23.5 billion yen, which is a decrease of 6.6 billion yen last year. It is a very tough business environment, but it is expected to achieve the second-highest performance level in the past. Furthermore, the price limit has been changed to $1.135. Next, I would like to explain the performance forecast for each product segment. The sales of Electronics functional materials is expected to be 8.85 billion yen per annum, which is 4.2 billion yen per year. This is due to the fact that the third half of the year is expected to see a recovery in demand for semiconductor post-processing related materials, is expected to be the second half of the year. On the other hand, the high-priced chemical drugs are estimated to be 7.36 billion yen, which is the total of 3.9 billion yen per year. The high-priced chemical drugs are on the same level of sales as customers. As for the SHIMOKI, we expect to see improvement in the operating rate of the semiconductor factory, including the cutting-edge semiconductor, including the generation of AI. However, we expect that the recovery period overall will be delayed to the second half of the year. Next, we would like to talk about I would like to explain the cost of sales for each type of product. The legacy material is minus 10% of the previous year's cost. KRF Resist is expected to be in the low end. In addition, we believe that the top material, EUV Resist, will continue to improve. The ARF Registry is expected to show regional differences in the recovery of the market, so it is a good example overall. In terms of semiconductor post-processing related materials, the previous year's cost was minus 5%. The package register, which is the main factor, is negative 5%. The MEMS material is negative 10% and while we are looking forward to the recovery of SHIMOKI, the effect of kamiki has been greatly reduced. As for the WHS related materials, we are looking at a plus 15%. Next, I would like to explain the increase and decrease of operating profit. The operating profit for December 2022 is compared to 29.3 billion yen, excluding the total operating profit, and I would like to explain the net profit of 5.8 billion yen. The sales of high-priced chemical drugs have decreased, resulting in a profit of 2.2 billion yen. The effect of the change in price and the increase in sales is estimated at a profit of 2 billion yen. This is an estimate of the increase due to the change in price, This is because we are assuming that the price of raw materials will decrease as the price of raw materials decreases. As for the increase in expenses, it is said to be the cause of a decline in profits of 3.8 billion yen. This is due to the decrease in raw materials and the increase in profits, This graph shows the sales and expectations of each half-year. This year, along with Kamiki, we are looking forward to sales recovery from Shimoki along with Electronics functional materials and high-purity chemical drugs, but we believe that the full recovery will be after next year. I will explain about equipment investment, raw material incineration expenses, and research and development expenses. This year's equipment investment will carry out the T.O.K. medium-term plan, which was announced in February last year, in the order of 2024. However, due to the influence of the long-term delay of investment materials, we have adjusted it to 1.74 billion yen, which is 1.2 billion yen less than the original plan. As you can see, the cost of fuel incineration and research and development is as follows. Next, I would like to report on the progress of the TOK medium-term plan 2024. The TOK medium-term plan 2024 is expected to be a back-cast from the TOK Vision 2030, is a strategic milestone to boost our group for 2030. After the COVID-19 crisis, the semiconductor production has been adjusted, and the entire industry is suffering. However, we are confident that the growth of the semiconductor industry in the medium and long term will not be delayed. The company defines the growth area of semiconductors as four areas, information terminal, cloud, sensing and IoT, and green energy. By implementing five strategies raised in the TOK medium-term plan for 2024, We aim to improve corporate value by solving social issues for a prosperous future. Now, I would like to start by explaining the topics on the progress of the five strategies raised in the medium-term plan from the bottom line. First, the first strategy is The development of the global share of CENTAN Regis and the development of the acquisition and loss of core technologies in electronic materials and new fields, which are the second strategy, are all going as planned. Please refer to the following slides for more details. This slide shows what the market growth rate is like for our semiconductor pre-processing photoresist and post-processing related materials. As a result of continuing to provide the products that customers want at the right time, we have achieved a growth rate that is greatly higher than the market growth rate. We will continue to push forward our previous activities and aim for further growth by further evolving them. Next, I would like to talk about stable supply of high-quality products and the construction of a production system that is most suitable for the group. We have seen the semiconductor market in 2030, In order to strengthen the supply chain and establish a further foundation for the TOK Group as a company that does not have to be in the semiconductor industry, we have recently announced two new large-scale investments in Japan and one in Korea. On the other hand, when it comes to the supply system for overseas customers of high-priced chemical drugs, we are committed to ensuring that the company's sales, technology support, and quality assurance will establish a stable product supply system worldwide and will respond well to the increasing demand in the future. This is part of the strategy of Choshun Oka, a joint subsidiary company announced on July 6. This is This is an image of the cash flow plan during the 2024 TOK medium-term plan. At this point, we are reporting on what we reported in February this year. As for the company's return on investment policy, it is a return on investment of 4.0% of the joint net asset return rate, DOE, will continue to provide stable and sustainable profits. As explained in the summary page, we will continue to work hard to provide stable and sustainable profits. We would like to meet your expectations. Finally, I would like to explain our efforts to achieve carbon neutrality. Last September, we increased the power ratio of renewable energy from Japan's domestic bases by 70% and in January of this year, we switched the power of all domestic bases to 100% renewable energy. Thank you for your attention.