Toyo Ink SC : Presentation Question & Answer session summary First Half of FY2023 Results Briefing

Financial Results Briefing for the Fiscal Year Ending December 31, 2023

Question & Answer

• Date/time: Aug. 22, 2023 10:00am - 11:00am (Japan time)
• Speakers:
• • Satoru Takashima: President and Representative Director, and Group CEO
  • • Hiroyuki Hamada : Senior Managing Director
  • Takeshi Arimura: Executive Officer, Group Financial Director
  • Hideki Okaichi: President and Representative Director, TOYOCOLOR CO., LTD.
• Presentation Material：

https://schd.toyoinkgroup.com/ja/ir/archives/pdflib/2023/frp_fy2023_q2_ja.pdf

TRANSLATION:

This is a transcript of Financial Results Briefing for the Fiscal Year Ending December 2023, Question & Answer session, held on Aug. 22, 2023. This is an English translation of the Japanese original, prepared only for the convenience of shareholders residing outside Japan. The original Japanese version will prevail should there be any difference in the meaning between the English version and the Japanese version.

DISCLAIMER:

The forecast or projections in this material are based on the assumptions and beliefs of our management in light of the information available as of Aug 22, 2023. Changes in global, economic and business conditions could cause actual results to differ materially from these forecasts.

The content of this transcript have been edited or revised by the company.

1

Question & Answer

Q.1: I will ask regarding the color filter materials.

The global market share of resist ink was forecast to be 15% at the beginning of the fiscal year but has now been raised to 16%. Please tell us about the background to this share increase.

In terms of RGB, according to your comment this time, you are expanding in the red and blue market, where your company has always been relatively strong, particularly in China. You are also expanding in sales of your green in Taiwan. I don't think you have a large share of the green market, but could you give us some background on this new expansion?

A.1（Okaichi ）:Thank you for your question. The share of resist ink for color filters has increased than we expected at the beginning of the fiscal year.

To give you some background to this, let me briefly explain the market share in each country based on our research. Our share in Taiwan has risen from 28% last year to 36%, and in China it has risen from 8% to 9%. Although Japan is not such a large market, we have raised our share from 50% to 58%, which is slightly higher than we had planned at the beginning of the fiscal year.

The increase in Taiwan's market share was particularly large, and as Mr. Takashima explained in the first half of this presentation, the panel market declined significantly last year. There was a time when the price of large panels in particular dropped to about one-third of what they were in the past. In the meantime, we have given opportunities from our customers to conduct trials of our products.

As we always say, we are engaged in a three-story business that consistently produces pigments, intermediates, and resist inks, and I believe that our market share has increased due to the appreciation of our technological development in this area.

Then you asked about color. As you mentioned, we have a fairly high market share of red and blue, and although our market share of green out of the three RGB colors is low, we have been able to raise the level of technological development of base colors. In addition, we have recently been hearing more and more requests from customers that they can develop unified technology by buying all colors from us rather than from separate manufacturers each, and we have confirmed that there is a trend toward purchasing RGB products as a set. That is all.

Q.2: Until now, there have been manufacturers that specialize in each of these colors, and customers have bought from them separately. Is it a recent trend to buy them all together ?

2

A.2（Okaichi）: Suppliers and panel makers had a tough time this past year, especially with the decreasing volume, but it was also an opportunity to advance technologically. I believe that we were able to contribute to the improvement of line speed and precision, for example, by unifying the supplier.

I don't say that purchasing all together is the current trend, but in this current depressed situation, I think there was one such trend.

（Page 10）

Q3: I would like to make question regarding the printing and information segment. Although you have not changed the segments in this fiscal year's plan, the progress rate of the colorant and functional materials, polymers and coatings and packaging materials segments are relatively high, so I guess they will be okay.

But, since the printing and information segment is not making a profit in H1, I think you have to work very hard in H2 to achieve JPY1.2 billion for the year. Regarding the outlook for H2 of

3

the fiscal year, could you please provide a more specific quantitative example, such as price revisions, how much the effect of the weaker yen will be, etc.

A.3（Hamada）: In the printing and information segment, domestic sales have been pretty tough. Up until now, overseas have been covering it. This year, however, although we made efforts to improve certain aspects of the domestic business, we were not able to increase profits or reduce losses due to the decline in the market. And one more, are functional coatings for smartphones?

There was a considerable decline in volume, and overseas profits dropped considerably. Since overseas business has been improving in volume, I think we can make a profit there.

In the domestic market, as I explained earlier, the price revisions has been delayed the most, but there are a number of items that have been settled from July this year, and the effect of the price revisions is expected to contribute first.

As I mentioned in the functional coatings, the coatings have a high level of designability, which means that the same level of designability can be achieved with coatings as has been achieved with films, so they are used in various products. Sales of the coatings will probably triple from last year, especially in H2. These are relatively high-margin products, and we expect profits to rise considerably in H2 because of the products.

4

(Page 9)

Q.4: Please tell me about your strategy for color filter materials. I believe there is currently a movement for the Chinese government to form its own supply chain inside the country, and I would like to ask you about your response here.

You explained earlier that the paste would be made in Japan, sold in China, and then processed in China. Can this avoid the risk of the Chinese government manufacturing its own supply chain in the country? Is it safe to assume that there is little risk that sales to China will decline as a result? Thank you.

A.4（Takashima）: As you mentioned we have been looking at this movement as a risk for three to four years now, and we expect that it will eventually become necessary to localize the supply chain.

Therefore, we would first work with our Chinese partners and have them sell and see their ability to sell, at the same time, we have been expanding our market shares. This has been

5