Tokyo Ohka Kogyo : （2.17 MB）

Value Creation Story	Initiatives to Address Material Issues	Data Section
for Enhancing Corporate Value

Trends of Key Data and Analysis

Ten-Year Financial Highlights

Net sales/Overseas sales ratio*	EBITDA/Operating income*	Dividends applicable to the year per share/Payout ratio	R&D costs*/Ratio of R&D costs to net sales
¥140,055 million 78.8%	¥27,138 million ¥20,707 million	¥156.00	36.2%	¥9,800 million 7.0%

■ ■ Net sales (millions of yen)

- Overseas sales ratio (%)

■ ■ EBITDA (millions of yen)

■ ■ Operating income (millions of yen)

■ ■ Dividends applicable to the year per share (yen)

- Payout ratio (%)

■ ■ R&D costs (millions of yen)

- Ratio of R&D costs to net sales (%)

										140,055
							105,277		117,585
					92,411* 100,422	102,820
		88,086	89,969	88,764
72,919	75,269		77.0		79.1*				78.9	78.8
		75.6	74.2		76.5	76.1
	71.5
69.2
2013	2014	2015	2016	2017/3	2017/12	2017	2018	2019	2020	2021/12
					(Adjusted)

														27,138
													22,362	20,707
	17,530	18,069	16,073	15,229*	16,795	17,569	16,762	15,589
		13,253
11,631	12,698	12,438			9,878	10,505	9,546
	10,025				9,954	9,194*
7,872
2013	2014	2015		2016	2017/3	2017/12 2017		2018		2019	2020 2021/12
							(Adjusted)

								154.00	156.00
							120.00
						96.00
			64.00	64.00	64.00		92.3
	52.00	60.00			64.3
				58.2
44.00			43.8	46.3
						36.2
36.2	30.9	30.5	36.1
2013	2014	2015	2016	2017/3	2017	2018	2019	2020	2021/12

						8,888		8,879	9,545	9,800
				8,207		8,526
6,211	6,389	6,903	7,015		6,921*
8.5	8.5	7.8	7.8	9.2		8.9	8.1	8.6	8.1
	7.5	7.0
2013	2014	2015	2016	2017/3	2017/12	2017	2018	2019	2020	2021/12
					(Adjusted)

Net sales and cash generation capability (EBITDA) are on an upward trend owing to business management with a long-term vision on a 10-year scale. Toward the overarching aspiration for FY 2020 as a long-term vision formulated in FY 2010, TOK promoted long-run R&D while upgrading its world-leading microprocessing technology and high-purity processing technology based on customer-oriented strategies and marketing. It also made the largest capital investments during the TOK Medium-Term Plans for fiscal years 2015, 2018, and 2021, which led to record-high net sales and EBITDA for two consecutive years in FY 2021/12. In the TOK Vision 2030, which was formulated in 2020, the company aims to achieve EBITDA of ¥45 billion by FY 2030. In the TOK Medium-Term Plan 2024, which is backcast from the Vision, TOK will pursue net sales of ¥180 billion or more and EBITDA of ¥35 billion or more in FY 2024/12.

* Because of the change in the fiscal year-end, the fiscal year ended December 31, 2017, was an irregular nine-month period in Japan and 12 months overseas.

Departing from the basic policy to maintain the consolidated payout ratio of 30% or more until FY 2016/3, and of 40% or more until FY 2017/3, TOK introduced a new dividend policy targeted at DOE of 3.5%, starting with the year-end dividend in FY 2018/12, and of 4.0% starting with the year-end dividend in FY 2021/12, in order to more clearly respond to the expectations of long-run investors (see pages 44-47,"Message from the CFO").

TOK continuously invests about 8% of net sales in R&D and promotes the use of materials informatics (MI) and computational chemistry toward achieving R&D efficiency of 200%

(see pages 58-61, "Message from the Director in Charge of Marketing and Development").

• Because of the change in the fiscal year-end, the fiscal year ended December 31, 2017, was an irregular nine-month period in Japan and 12 months overseas.

Profit attributable to owners of the parent*/ROE

¥17,748 million	11.5%
■ ■ Profit attributable to owners of the parent (millions of yen)	- ROE (%)

										17,748
									9,926	11.5
		8,818
	7,549	7,716
		6,343	6,007*	6,885	6,875
5,443				5,410	6.7
	6.2
	5.8	5.3
4.5			4.4			4.7
			4.1		3.7
2013	2014	2015	2016	2017/3	2017/12	2017	2018	2019	2020	2021/12
					(Adjusted)

Because of the influence of increased depreciation and amortization resulting from large-scalecapital investment, the volatility of operating income and of profit attributable to owners of parent was large relative to EBITDA. However, current net income for FY 2021/12 broke record highs for the second consecutive year, coupled with increased ROE. In the TOK Vision 2030, the company will promote measures to emphasize ROIC as a new KPI in the promotion of BS management, equivalent to ROE (see pages 44-47, "Message from the CFO").

• Because of the change in the fiscal year-end, the fiscal year ended December 31, 2017, was an irregular nine-month period in Japan and 12 months overseas.

Total assets/Equity ratio/Debt-to-equity

¥217,264 million	71.7%	0.07 time
■ ■ Total assets (millions of yen)	- Equity ratio (%)	- Debt-to-equity (times)
		217,264

		174,863	167,300	174,492 178,681	182,957 186,486 201,185
145,664 155,859
85.9	87.5	84.3	85.1	84.6
	82.2
						78.8	77.5	75.3
								71.7
						0.07	0.08	0.07	0.07
0.00	0.00	0.00	0.00	0.00	0.00
2013	2014	2015	2016	2017/3	2017	2018	2019	2020	2021/12

The company formulated a cash reserve policy aiming to develop technologies in anticipation of a super-long time frame, to continue to make challenges over a super-long time frame, and to respond rapidly when the unexpected happens and have promoted BS management that keenly recognizes cash allocation (see pages 44-47,"Message from the CFO"). The equity ratio has stayed at around 85% for many years but has been on a downward trend since the TOK Medium-Term Plan 2018 as a consequence of long-term debt financing, better shareholder returns, and large-scale share buybacks.

Capital investment/Depreciation and amortization

¥8,488 million ¥6,430 million

■ ■ Capital investment (millions of yen) ■ ■ Depreciation and amortization (millions of yen)

	14,577								14,184
				9,378							8,488
		7,276					7,633	7,063	7,216
					6,731*		6,917	6,772	6,430
5,332			5,9195,631	6,118
		6,035*	5,636	5,611
3,758	4,276
	2,672
2013	2014	2015	2016	2017/3	2017/12	2017	2018	2019	2020	2021/12
							(Adjusted)

Depreciation and amortization increased as a result of large- scale capital investments during the TOK Medium-Term Plan 2015 and the TOK Medium-Term Plan 2018; however, under the TOK Medium-Term Plan 2021, the Company plans to mainly invest in production equipment with longer depreciation periods, so depreciation and amortization will increase at a more moderate pace. In the TOK Medium-Term Plan 2024, backcasting from the TOK Vision 2030 aimed at achieving net sales of ¥200.0 billion in 2030, the company also plans capital the largest capital investment featuring investment in production equipment.

• Because of the change in the fiscal year-end, the fiscal year ended December 31, 2017, was an irregular nine-month period in Japan and 12 months overseas.

Exchange rate

¥115

(yen/U.S. dollars, as of March 31)

120	112	112	113	111	109	115
103	103
94

2013

2014

2015

2016

2017/3

2017

2018

2019

2020

2021/12

For the control of financial risks due to exchange rate changes and liquidity, the company implements risk hedge measures through forward exchange contracts while promoting BS management considering the increasing recent global risks.

As part of these efforts, the company intends to advance global cash management that include the adjustment of balance of cash positions among overseas sites.

116 TOKYO OHKA KOGYO CO., LTD.

Integrated Report 2021 117

Value Creation Story	Initiatives to Address Material Issues	Data Section
for Enhancing Corporate Value

Trends of Key Data and Analysis

Ten-Year Nonfinancial Highlights

CO2 emissions (converted from energy consumption)*

25,000 tons-CO2e	65 base unit index
■ ■ CO2 emissions (10,000 tons-CO2e)	- Base unit index (vs. 2019)

							100
	3.4	3.3						89
3.0		3.0	3.0	3.0		3.0	3.1
		2.9
									65
									2.5
2012	2013	2014	2015	2016	2017	2018	2019	2020	2021/12

Volume of industrial waste*1

4,895 t	110 base unit index
■ ■ Volume of industrial waste (t)	- Base unit index (vs. 2019)

								111	110
6,197				5,560			100
		5,200	5,010	5,020			4,895
	4,792
		3,980		4,380
						3,690
2012	2013	2014	2015	2016	2017	2018	2019	2020	2021/12

Number of female employees*

177
(People)
							160	171	177
						148
				135	139
123	120	122	126
2013	2014	2015	2016	2017/3	2017	2018	2019	2020	2021/12

Frequency rate of workplace accidents/

Severity rate of workplace accidents*

0.00%0.00%

- Frequency rate of workplace accidents (%)	- Severity rate of workplace accidents (%)
1.23
0.81	0.81	0.81

0.00			0.41					0.00	0.00
	0.00				0.00
							0.02
0.00	0.00	0.002	0.001	0.003	0.00	0.01		0.00	0.00
2012	2013	2014	2015	2016	2017	2018	2019	2020	2021/12

TOK is pursuing first the reduction of energy-related CO2 emissions per base unit by 15 points by FY 2030 (vs. 2019), envisioning carbon neutrality by FY 2050. The figure in FY 2021 decreased by more than 27 points year-over-year owing to the shift in September of more than 70% of purchased electricity at all key domestic sites to renewal energy.

• Unconsolidated basis and consolidated domestic subsidiaries in Scopes 1 and 2; Because of the change in the fiscal year-end, totals for 2013 onward are from January through December, and those for 2012 are from April to March.

TOK achieved zero emissions*2 for eight consecutive years as the volume of its industrial waste headed to landfill disposal via intermediate treatment was kept below 1% of the total. TOK targets a reduction of 15 points in total industrial waste by FY 2030 from 2019 (per base unit). The figure increased by 9.5 points in FY 2021, despite efforts to refine and reuse process effluents, to internally process effluents, to internally collect waste, and to convert waste into items of value.

*1 Total sum of general industrial waste and specially controlled industrial waste; unconsolidated basis and consolidated subsidiaries in Japan.

Because of the change in the fiscal year-end, totals for 2013 onward are from January through December, and those for 2012 are from April to March.

*2 Definition of zero emissions: Landfill disposal volume (direct or after intermediate treatment) of less than 1% of industrial waste discharged by business activities.

The number of female employees and the ratio of women in senior and middle management have been increasing as a result of proactive recruiting, coupled with enhanced supportive measures to retain and promote women in the company.

In recognition of the initiatives to offer flexible work styles, support for career formation plans, and support for childrearing, TOK was again selected as a constituent stock in 2022 for the MSCI Japan Empowering Women Index.

• Unconsolidated (employees exclude those seconded from other companies to TOK, and include people seconded from TOK to other companies and contract workers)

In FY 2021/12, TOK achieved zero workplace accidents both in frequency and in severity for two consecutive years. However, eight incidents without lost workdays occurred. Therefore, the company reviewed the risks through factor analysis and then formulated and implemented measures to prevent a recur- rence. TOK will continue to make concerted company-wide efforts to prevent workplace accidents, including the horizontal expansion of the RBA audit results (with Platinum Recognition at a key plant) and the acquisition of ISO 45001 certification at increased sites.

* Unconsolidated

Number of patents registrations

264
(patents)
	378			360
			332
						306
271		293			284*	290	279
				264
2013	2014	2015	2016	2017/3	2017	2018	2019	2020	2021/12

The number of patent registrations in the cutting-edge semiconductor fields is on a decreasing trend due to the increased development difficulty, but patent registrations have been rising for new businesses and new materials. Going forward, TOK will aim for the stable pursuit of business development through new and promising technologies, while building barriers to entry through patent acquisition for enhanced intellectual capital. The company will formulate a more effective patent portfolio by selecting open or closed strategies for each case thereby pursuing the further enhancement of competitiveness and corporate value.

• Because of the change in the fiscal year-end, results for the fiscal year ended December 31, 2017, are only for nine months.

118TOKYO OHKA KOGYO CO., LTD.

Number of consolidated employees/Number of consolidated foreign employees/Graduate turnover within three years of joining the Company*

1,816	476	9.1%
■ ■ Number of employees	■ ■ Number of foreign employees	- Graduate turnover within three years
(consolidated)	(consolidated)	of joining the Company (%)

							1,673	1,726	1,750	1,816
					1,596	1,611
			1,540	1,564
1,487		1,505
		22.2
			11.1				12.5	412	424	476
				312	323
				301		9.1
		226		378		10.0
0.0		259	0.0	0.0	0.0	8.0
191
2013	2014	2015	2016	2017/3	2017	2018	2019	2020	2021/12

At TOK, the number of foreign employees has been increasing as a result of the expansion of local customer-oriented strategies at overseas sites, an increase in the number of overseas development and production sites, and the emphasis on merit-based hiring of new graduates. Based on a frank and open-minded business culture as the management principle, and the basic philosophy that human resources are a company asset, TOK expanded the different personnel systems and training programs. As a result, the ratio of new graduate hires who quit within three years of joining the company remained at a low rate. In March 2022, TOK was recognized for the 2022 Certified Health & Productivity Management Outstanding Organizations Recognition Program for the fourth consecutive year.

* Unconsolidated

Ratio of outside officers in the Board of Directors

50.0%

(%)

					46.2	46.2	50.0
	41.7	41.7	41.7	41.7
36.4	41.7
36.4

2013 2014 2015 2016 2017/3 2017 2018 2019 2020 2021/12

TOK increased the number of outside Audit & Supervisory Board Members by one to three in 2013 and increased the number of outside directors by one in 2015, 2020, and 2022, respectively, to four. Therefore, the ratio of outside officers on the Board of Directors is now 50.0%.

Ratio of outside Audit & Supervisory Board Members among Audit & Supervisory Board Members

75.0%

(%)

75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0

66.7

2012 2013 2014 2015 2016 2017/3 2017 2018 2019 2020 2021/12

The ratio of outside Audit & Supervisory Board Members on the Audit & Supervisory Board has been 75.0% ever since the number of outside Audit & Supervisory Board Members was increased by one to three in 2013.

Integrated Report 2021 119

Value Creation Story	Initiatives to Address Material Issues	Data Section
for Enhancing Corporate Value

Trends of Key Data and Analysis

Trends of Key Data and Analyses

Changes in Medium-Term Plans and Ten-Year Key Data

Rebirth of TOK

Direction:

• Enhance marketing capabilities on a global basis
• Further accelerate technology development
• Promptly launch new business
• Accelerate global strategy and expand worldwide market share

TOK Medium-Term Plan 2015

Objectives:

• Surpass record-high earnings
• Enhance business foundations that support sustainable growth

Strategies:

• Build close relationships with regional users
• Reform business portfolios
• Develop global human resources

TOK Medium-Term Plan 2018

Strategies:

• Reform business portfolios
• Upgrade the customer-oriented strategies
• Develop human resources capable of global operation
• Strengthen management foundation

TOK Medium-Term Plan 2021

Long-term vision up to FY 2020/12:

Aim to be a globally trusted corporate group by inspiring customers with high value-added products

Features:

• Strengthen business portfolio reforms
• Return to a growth trajectory
• Strengthen balance sheet management and introduce a new dividend policy

As semiconductor demand increased, TOK harvested the effect of long-run R&D activities and strategic investments, which led to record-high performance for two consecutive years.

															Thousands of
Fiscal years ended March 31 until 2017 and												Millions of yen			US dollars
the fiscal years ended December 31 after 2017	2013/3	2014/3	2015/3	2016/3	2017/3	2017/12*5	2018/12	2019/12	2020/12			2021/12		2021/12
Results of operation:
Net sales .............................................................................	72,919	75,269	88,086	89,969	88,764	92,411	105,277	102,820	117,585			140,055	1,217,872
..........................................................Materials Segment	67,697	72,866	84,611	87,280	86,558	90,531	102,621	98,986	114,773			137,725	1,197,613
Equipment Segment .......................................................	5,222	2,402	3,475	2,689	2,205	1,880	2,655	3,833	2,811			2,329	20,258
EBITDA ...............................................................................	11,631	12,698	17,530	18,069	16,073	15,229	17,569	16,762	22,362			27,138	235,982
Operating income ...............................................................	7,872	10,025	13,253	12,438	9,954	9,194	10,505	9,546	15,589			20,707	180,065
..............................................Income before income taxes	8,031	11,666	14,301	11,777	9,220	9,492	9,814	8,657	15,349			25,799	224,342
Profit attributable to owners of the parent..........................	5,443	7,549	8,818	7,716	6,343	6,007	6,875	5,410	9,926			17,748	154,338
....................................................................Free cash flow	12,363	(2,610)	3,380	7,517	(926)	4,169	6,298	(4,543)	19,472			15,182	132,018
Capital investment ..............................................................	5,332	14,577	7,276	5,919	9,378	6,731	5,636	14,184	5,611			8,488	73,808
Depreciation and amortization ............................................	3,758	2,672	4,276	5,631	6,118	6,035	7,063	7,216	6,772			6,430	55,920
R&D costs...........................................................................	6,211	6,389	6,903	7,015	8,207	6,921	8,526	8,879	9,545			9,800	85,220
Per share data (Yen/US dollars):
Per share basic profit ..........................................................	121.69	168.54	196.61	177.30	146.18	138.31	164.92	130.02	239.42			430.73	3.74
Per share cash dividends applicable to the year .................	44.00	52.00	60.00	64.00	64.00	64.00	96.00	120.00	154.00			156.00	1.35
Per share net assets ...........................................................	2,796.37	3,044.24	3,285.81	3,298.00	3,384.14	3,490.97	3,459.37	3,491.23	3,651.20			3,880.18	33.74
At year-end:
Total assets.........................................................................	145,664	155,859	174,863	167,300	174,492	178,681	182,957	186,486	201,185			217,264	1,889,253
Total noncurrent liabilities ...................................................	2,811	1,518	3,569	2,899	2,024	3,421	10,723	14,437	15,997			12,416	107,972
Interest-bearing debt...........................................................	488	366	814	534	135	-	10,000	11,272	10,962			10,611	92,278
Net assets...........................................................................	127,838	139,962	151,999	147,270	152,931	153,517	150,857	151,733	159,994			165,190	1,436,411
Key performance indicators (%):														Equity ratio:
Operating margin ................................................................	10.8	13.3	15.0	13.8	11.2	9.9	10.0	9.3	13.3			14.8		The equity ratio remained around
			85% for a long time, but the com-
ROE	4.5	5.8	6.2	5.3	4.4	4.1	4.7	3.7	6.7			11.5
			pany is continuing to pursue the
Ratio of R&D costs to net sales..........................................	8.5	8.5	7.8	7.8	9.2	7.5	8.1	8.6	8.1			7.0		optimal balance, which may be
Equity ratio ..........................................................................	85.9	87.5	84.3	85.1	84.6	82.2	78.8	77.5	75.3			71.7		decreasing because of stronger
Debt-to-equity (times) .........................................................	0.00	0.00	0.00	0.00	0.00	0.00	0.07	0.08	0.07			0.07		balance sheet management.
			(See pages 44-47 "Message from
Payout ratio .........................................................................	36.2	30.9	30.5	36.1	43.8	46.3	58.2	92.3	64.3			36.2		the CFO.")
DOE ....................................................................................	1.6	1.8	1.9	1.9	1.9	1.9	2.8	3.5	4.3			4.1
ESG-related data:														CO2 emissions:
Number of employees (consolidated) .................................	1,487	1,505	1,540	1,564	1,596	1,611	1,673	1,726	1,750			1,816		The base unit index has steadily
			decreased through a variety of
CO2 Emissions (converted from energy consumption)
													reduction measures, including the
(10,000 t)*6 ........................................................................	3.4	3.3	3.0	3.0	3.0	3.0	2.9	3.0	3.1			2.5		shift of 70% of electricity used at
Industry trends:														the Headquarters to renewable
													energy starting in September
Worldwide semiconductor market
												2021.
(millions of US dollars)*1 (year)..........................................	305,584	335,843	335,168	338,931	412,221	468,778	412,307	440,389	555,893			646,456*3		(See pages 102-103, "Initiatives
Worldwide photoresists sales														toward Achieving Carbon
(thousands of US dollars)*2 ...............................................	1,152,306	1,288,713	1,230,022	1,358,009	1,504,224	1,504,224	1,631,851	1,679,654	2,027,350			2,420,373		Neutrality")
Exchange rate (JPY/USD)*4 ................................................	94	103	120	112	112	113	111	109	103			115
*1 Source: World Semiconductor Trade Statistics					*4 As of the end of each fiscal year
*2 Source: Calculated by TOK based on data aggregated by SEMI (total sales of ArF and KrF excimer lasers and g- and i-Line photoresists)			*5 Because of the change in the fiscal year-end, the fiscal year ended December 31, 2017, was an irregular nine-month period in Japan and 12 months overseas.
Because of the change in the fiscal year-end, the same values are indicated for FY 2017/3 and for FY 2017/12.				*6 Unconsolidated basis and consolidated subsidiaries in Japan. Because of the change in the fiscal year-end, totals for 2013 onward are from January through December, and those
*3 Forecast-based amount for 2022					for 2012 are from April to March. Accordingly, the same values are indicated for FY 2017/3 and for FY 2017/12.

120 TOKYO OHKA KOGYO CO., LTD.

Integrated Report 2021 121

Trends of Key Data and Analysis

FY 2021/12 Market Trends, Results of Operations, Financial Position, and Performance Outlook in the Next Term

Value Creation Story	Initiatives to Address Material Issues	Data Section
for Enhancing Corporate Value

Business Environment

For the current term (FY 2021/12), the global and Japanese economies slowed down because economic activities were suppressed as a result of the global COVID-19 pandemic. Although there were recovering trends in some parts, full-scale recovery has yet to the achieved.

As for the U.S. dollar-yen exchange rate, the strong yen up to the previous year took a rapid downturn early this year. After struggles for an upward trend from March to September, the yen further weakened in October onward due to expected interest rate hikes to counter inflation in the United States combined with high crude oil prices.

Net Sales and Operating Income

In the fiscal year ended December 31, 2021, consolidated net sales increased by ¥22,470 million (19.1%) year-over-year to ¥140,055 million. Net sales in the first half increased by ¥7,604 million (13.3%) to ¥64,808 mil- lion. Net sales in the second half increased by ¥14,866 million (24.6%) to ¥75,247 million.

The main source of demand for the Company's products is the electronics market for semiconductors and displays. The semiconductor demand for PCs and data servers stayed favorable in the electronics market,

owing to the dissemination of 5G and IoT combined with increased work-from-home time and the use of cloud services.

Cost of sales increased by ¥14,157 million (18.5%) year-over-year to ¥90,529 million. The cost of sales ratio dropped by 0.4 percentage point year-over-year to 64.6%. As a result, gross profit increased by ¥8,312 million (20.2%) to ¥49,525 million.

Selling, general, and administrative (SG&A) expenses increased by ¥3,194 million (12.5%) year-over-year to ¥28,817 million.

Operating income increased by ¥5,118 million (32.8%) year-over-year to ¥20,707 million owing to the effects of sales activities and the increased sales of high value-added products, despite the raised raw material prices.

Income before Income Taxes and

Profit Attributable to Owners of the Parent

Income before income taxes increased by ¥10,449 million (68.1%) year-over-year to ¥25,799 million, owing to the increased gain on the sale of investment securities.

The profit attributable to owners of the parent increased by ¥7,822 million (78.8%) year-over-year to ¥17,748 million.

Performance by Segment

Materials Segment:

Net sales of the segment, excluding internal transac- tions, increased by ¥22,951 million (20.0%) year-over- year to ¥137,725 million. Operating income increased by ¥6,042 million (29.6%) to ¥26,438 million. This was mainly because sales remained steady in the Electronic Functional Materials Division and the High-Purity Chemicals Division.

• Electronic Functional Materials Division

In the electronic functional materials segment, net sales increased by ¥13,612 million (20.7%) year-over-year to ¥79,491 million. This was mainly due to the increased net sales because sales of semiconductor photoresists and high-density integration materials stayed steady, supported by the strong semiconductor demand for 5G, IoT, and data servers.

• High-PurityChemicals Division

Net sales in the High-Purity Chemicals Division increased by ¥9,072 million (18.6%) year-over-year to ¥57,804 million. This was mainly due to increased net sales because the sales of chemicals attached to semiconductor photoresists used in the cutting-edge semiconductor production process stayed steady.

Equipment Segment:

• Process Equipment Division

Net sales in the Process Equipment Division, excluding internal transactions, decreased by ¥481 million

(17.1%) year-over-year to ¥2,329 million. Operating loss decreased by ¥20 million year-over-year to ¥290 million. This mainly resulted from the prolonged launch of equipment due to delayed parts procurement and travel restrictions during the COVID-19 pandemic.

Financial Condition

Total assets at the current year-end (December 31, 2021) increased by ¥16,078 million from the previous year-end to ¥217,264 million.

Total current assets increased by ¥21,939 million from the previous year-end to ¥118,883 million. This mainly reflected the respective increase of ¥9,013 million in cash and deposits and by ¥7,592 million in trade notes and accounts receivable.

Total noncurrent assets decreased by ¥5,861 million from the previous year-end to ¥98,380 million. This mainly resulted from the decrease of investments and other assets by ¥9,900 million due to the transfer of long-term deposit to short-term, whereas property, plant, and equipment increased by ¥3,820 million.

■ Exchange rate (yen/US dollars, monthly average)

■ Net sales by segment, year-over-year comparison (millions of yen)

■ Breakdown of change in materials segment operating income

■ Total assets year-over-year comparison (millions of yen)

108.63

109.14

109.20

105.37

103.69

110.13

110.31

113.11

109.85

110.17

114.14	2,811
113.88

114,773

2,329

[Equipment segment] -¥400 million

Prolonged launch of equipment due to delayed parts procurement and travel restrictions during the COVID-19 pandemic

137,725

[Materials segment] +¥22,900 million

Steady sales of electronic functional materials and high-purity chemicals

	Impact of exchange rate
	changes and selling
	price adjustments
	+¥3.0 billion	Increase
	in expenses
	Sales increase	-¥9.4 billion
	or decrease/	26.4
	Improvement in
20.3	product mix	billion
+¥12.5 billion
billion

	[Noncurrent Assets] -¥5.8 billion	98,380
104,242	Transfer of long-term deposit
to short-term

	[Current Assets] +¥21.9 billion
96,943	Increase in cash and deposits,	118,883
in trade notes and accounts receivable

2021/1	2	3	4	5	6	7	8	9	10	11	12	2020/12	2021/12
											(Month)
Source: Mitsubishi UFJ Research and Consulting Co., Ltd.						Material segment		Equipment segment

2020/12

2021/12

+6.1 billion

2020/12

2021/12

Current Assets Noncurrent Assets

122 TOKYO OHKA KOGYO CO., LTD.

Integrated Report 2021 123

Trends of Key Data and Analysis

Value Creation Story	Initiatives to Address Material Issues	Data Section
for Enhancing Corporate Value

Reference: Information Related to Electronic Functional Materials and Semiconductor Photoresist

Total liabilities at the current year-end increased by

¥10,882 million from the previous year-end to ¥52,073 million. This mainly resulted from the increase in trade notes and accounts payable by ¥5,504 million, and the increase in short-term loans payable by ¥3,900 million due to the transfer of long-term loans payable to short-term.

Total equity at the current year-end increased by ¥5,196 million from the previous year-end to ¥165,190 million. This mainly reflected the increase in the foreign currency translation adjustment by ¥3,011 million.

As a result, the equity ratio stood at 71.7% at the end of the fiscal year.

Cash Flows

Net cash provided by operating activities during the current fiscal year decreased by ¥3,195 million year-over- year to ¥19,758 million. This mainly reflected the respective increase in income before income taxes by ¥10,449 million, the gain on the sale of investment securities by ¥4,818 million, and trade receivables by ¥3,696 million.

Net cash used in investment activities increased by ¥1,094 million year-over-year to ¥4,576 million. This mainly reflected the increase in expenses on the purchase of property, plant, and equipment by ¥1,952 million.

Net cash used in financial activities increased by ¥12,176 million year-over-year to ¥18,114 million. This mainly reflected the increase in expenses on share buyback by ¥10,050 million.

As a result, the balance of cash and cash equivalents decreased by ¥1,258 million to ¥41,469 million from ¥42,728 million at the previous year-end.

FY 2022/12 Performance Outlook*

Net sales in FY 2022/12 are estimated to increase by 15.7% vs. FY 2021/12 to ¥162.1 billion, considering the strong semiconductor market with high operating rates of customers continued from the previous year.

Operating income is estimated to increase by 18.8% to ¥24.6 billion considering the increased sales of photoresists and other high value-added products, combined with the selling price adjustments of high-purity chemicals. Profit attributable to owners of the parent is estimated to decrease by 5.9% to ¥16.7 billion due to backlash to the special profit in the previous year though operating income will increase.

* Figures announced on February 14, 2022

TOK's photoresists are compatible with a variety of line widths along the semiconductor miniaturization spectrum

i-Line photoresists		KrF excimer laser	ArF excimer laser	EUV photoresists
			photoresists		photoresists

Light source for lithography	i-Line	KrF (krypton fluoride)	ArF (argon fluoride)	EUV (Extreme Ultraviolet)
Excimer laser	Excimer laser
Wavelength of light source	365 nm (i-Line)	248 nm	193 nm	13.5 nm
			Short
Line width of semiconductors*	350 nm > - ≥ 250 nm	250 nm > - ≥ 130 nm	130 nm > - ≥ 10 nm	10 nm > -
			Narrow
	Automotive power	Mass-market smartphones	Cutting-edge smartphones	Next-generation servers
	Next-generation
Main applications and	semiconductors
High-performance servers	Wearable devices	supercomputers
end products	Sensors
Game consoles	High-performance servers	Next-generation
	LEDs
			communications systems
			* Only rounded figures for primary ranges are shown.

Changes in sales composition of electronic functional materials by type

• Cash flows year-over-year comparison (millions of yen)

[Net Cash Provided by Operating Activities]

-¥3.1 billion

Increase in gain on the sale of

investment securities and in trade receivables

22,953	19,758
	-3,481	-5,937	[Net Cash Used in Investing Activities]		-4,576
			+¥1.0 billion
			Increase in expenses on purchases of	-	18,114
			property, plant, and equipment
	[Net Cash Used in Financing Activities]
			+¥12.1 billion
	Increase in expenses on the acquisition of treasury stock
2020/12		2021/12

• Earnings forecasts*

(millions of yen, %)

	FY 2021/12	FY 2022/12 Forecast
		Change	%
Net sales	140,055	162,100	+22,045	+15.7
Operating income	20,707	24,600	+3,893	+18.8
Profit attributable to	17,748	16,700	-1,048	-5.9
owners of the parent
EBITDA	27,139	31,200	+4,061	+15.0
ROE	11.5%	10.4%	-1.1	-

* Figures announced on February 14, 2022

	Others	g + i
	9%
	14%
High-density
integration	2020/12
18%
LCD	Results	KrF
		30%
7%
	ArF
	22

	Others	g + i
	9%
	14%
High-density
integration	2021/12
18%
LCD	Results	KrF
6%			31%
	ArF
	22%

	Others	g + i
	10%
	14%
High-density
integration	2022/12
18%
LCD	Forecast	KrF
		31%
5%
	ArF
	22%

Cash ows from operating activities		Cash ows from nancing activities
Cash ows from investing activities

%

*1 EUV photoresists are classified under "Other"

*2 High-density integration: Packaging materials and MEMS materials

124 TOKYO OHKA KOGYO CO., LTD.

Integrated Report 2021 125