AGC : Consolidated Financial Results for the Six Months ended June 30, 2020(PDF 227KB)

July 31, 2020 Corporate Name: AGC Inc.

(Code Number: 5201; TSE 1st section) (URL: http://www.agc.com)

President & CEO: Takuya Shimamura Contact: Kazumi Tamaki, General Manager, Corporate Communications & Investor Relations Division (Tel: [phone])

Consolidated Financial Results for the Six Months ended June 30, 2020 (IFRS basis)

(Fractions less than one million yen are rounded off.)

1. Financial Results for the Six months ended June 30, 2020 (January 1 through June 30, 2020)

(1) Consolidated operating results

	(% represents the change from the same period in the previous fiscal year.)
	For the Six months ended	For the Six months ended
	June 30, 2020		June 30, 2019
	Millions of yen	%	Millions of yen		%
Net sales	654,545		(11.2)	737,489		(1.1)
Operating profit	20,579		(50.4)	41,487		(31.2)
Profit before tax	16,456		(61.3)	42,556		(34.5)
Profit for the period	13,262		(63.5)	36,332		(31.6)
Profit for the period attributable to owners of the parent	11,440		(64.6)	32,286		(32.9)
Total comprehensive income for the period	(53,440)		-	19,081		-
Basic earnings per share (yen)	51.70			145.95
Diluted earnings per share (yen)	51.49			145.29

(2) Consolidated financial position

Total assets (millions of yen) Total equity(millions of yen)

Equity attributable to owners of the parent (millions of yen)

Equity attributable to owners of the parent ratio (%)

2. Dividends

FY2020 second quarter			FY2019
(as of June 30, 2020)		(as of December 31, 2019)
2,534,990		2,335,415
1,217,137		1,282,636
1,093,459		1,157,097
	43.1		49.5
			(Unit: yen)
FY2019	FY2020	FY2020 (forecast)

End of first quarter	-		-	――――
End of second quarter	60.00		60.00	――――
End of third quarter	-	――――		-
End of fiscal year	60.00	――――		-
Total	120.00	――――		-
Note: Revision of the forecast during this quarter: No

3. Forecast for FY2020 (January 1 through December 31, 2020)

(% represents the change from the same period in the previous fiscal year)

	Full year
	Millions of yen	%
Net sales	1,350,000	(11.1)
Operating profit	40,000	(60.6)
Profit before tax	-	-
Profit for the period	-	-
Profit for the period attributable to owners of the parent	-	-
Basic earnings per share (yen)
-

Note: Revision of the forecast for FY2020 consolidated operating results from the latest official forecast: Yes

(Financial forecast and Dividend forecast)

Net sales and Operating profit of the consolidated financial forecast for full year for FY2020, have been calculated based on the assumption that, although there are differences in business and regions, the Group's performance will gradually recover from the unfavorable business performance in the 2nd quarter of FY2020, along with the gradual resumption of economic activity, .

Among the consolidated financial forecast figures for full year for FY2020, Profit before tax, Profit for the period and Profit for the period attributable to owners of the parent, and the dividend forecast will be announced when reasonable forecasts become available since additional expenses that may arise from the implementation of restructuring measures and other measures are still unknown at present.

*Notes

1. Changes in significant subsidiaries during the period: No
2. Changes in Accounting Policies and Changes in Accounting Estimates

1. Changes in accounting policies required by IFRS: Yes
2. Changes in accounting policies other than "i" above: No
3. Changes in accounting estimates: No

Note: For details, please refer to "1. Condensed Interim Consolidated Financial Statements (IFRS) (5) Notes to the Condensed Interim Consolidated Financial Statements, (Changes in Accounting Policies)" on

page 11.

(3) Number of shares issued (common stock)

1. Number of shares issued (including treasury stock) at the end of the period

-FY2020 second quarter (as of June 30, 2020):	227,441,381
-FY2019 (as of December 31, 2019):	227,441,381

1. Number of treasury stock at the end of the period

-FY2020 second quarter (as of June 30, 2020):	5,828,642
-FY2019 (as of December 31, 2019):	5,870,670

1. Average number of shares issued during the period

-For the six months ended June 30, 2020:	221,282,271
-For the six months ended June 30, 2019:	221,214,186

*This interim consolidated financial statement is outside the scope of quarterly review procedures.

*Appropriate Use of Forecast and Other Information and Other Matters

The above forecast is the assumptions of the Group's management on the basis of currently available information and, as such, contain risks and uncertainties. For this reason, investors are advised not to base investment decisions solely on these prospective results. Please note that actual results may materially differ from the projection due to such various factors as business and market environment the Group is active in, currency exchange rate fluctuations, and others.

*Supplementary Material for the Quarterly Financial Results

Supplementary material(Financial Results for the Six Months ended June 30, FY2020) will be published on TD-net for viewing in Japan, and on our Website.

(Attached Documents)
	INDEX
1. Condensed Interim Consolidated Financial Statements (IFRS)	2
(1)	Condensed Interim Consolidated Statements of Financial Position	2
(2)	Condensed Interim Consolidated Statements of Profit or Loss and Consolidated Statements of	4
Comprehensive Income
	(Condensed Interim Consolidated Statements of Profit or Loss)	4
	(Condensed Interim Consolidated Statements of Comprehensive Income)	5
(3)	Condensed Interim Consolidated Statements of Changes in Equity	6
(4)	Condensed Interim Consolidated Statements of Cash Flows	10
(5)Notes to the Condensed Interim Consolidated Financial Statements	11
	(Changes in Accounting Policies)	11
	(Changes in Accounting Estimates)	11
	(Segment Information)	12
	(Notes to Other Income and Other Expenses)	14
	(Notes on Significant Subsequent Events)	14

- 1 -

1. Condensed Interim Consolidated Financial Statements (IFRS)

(1) Condensed Interim Consolidated Statements of Financial Position

			(Unit: millions of yen)
		FY2019	FY2020 second quarter
		(as of December 31, 2019)	(as of June 30, 2020)
Assets
	Current assets
	Cash and cash equivalents	113,784	382,594
	Trade receivables	264,102	217,501
	Inventories	291,224	293,591
	Other receivables	46,387	63,660
	Income tax receivables	6,849	5,465
	Other current assets	20,263	17,277
	Total current assets	742,612	980,090
	Non-current assets
	Property, plant and equipment	1,177,691	1,185,095
	Goodwill	103,946	101,893
	Intangible assets	69,964	65,395
	Investments accounted for using equity method	33,204	33,849
	Other financial assets	138,053	118,180
	Deferred tax assets	21,297	22,883
	Other non-current assets	48,644	27,602
	Total non-current assets	1,592,802	1,554,899
Total assets	2,335,415	2,534,990

- 2 -

			(Unit: millions of yen)
		FY2019	FY2020 second quarter
		(as of December 31, 2019)	(as of June 30, 2020)
Liabilities and equity
Liabilities
	Current liabilities
	Trade payables	152,502	119,047
	Short-terminterest-bearing debt	78,439	258,048
	Long-terminterest-bearing debt due within one year	80,101	64,576
	Other payables	140,722	164,335
	Income tax payables	8,867	6,284
	Provisions	3,968	2,480
	Other current liabilities	17,887	17,903
	Total current liabilities	482,490	632,678
	Non-current liabilities
	Long-terminterest-bearing debt	444,301	569,268
	Deferred tax liabilities	41,846	27,662
	Post-employment benefit liabilities	62,454	62,093
	Provisions	8,286	7,435
	Other non-current liabilities	13,399	18,714
	Total non-current liabilities	570,288	685,174
	Total liabilities	1,052,778	1,317,852
Equity
	Share capital	90,873	90,873
	Capital surplus	92,593	94,262
	Retained earnings	811,589	810,129
	Treasury shares	(28,468)	(28,246)
	Other components of equity	190,510	126,440
	Total equity attributable to owners of the parent	1,157,097	1,093,459
	Non-controlling interests	125,538	123,678
	Total equity	1,282,636	1,217,137
Total liabilities and equity	2,335,415	2,534,990

- 3 -

1. Condensed Interim Consolidated Statements of Profit or Loss and Consolidated Statements of Comprehensive Income
   (Condensed Interim Consolidated Statements of Profit or Loss)

		(Unit: millions of yen)
	For the six months	For the six months
	ended June 30, 2019	ended June 30, 2020
	(Jan. 1 through June. 30, 2019)	(Jan. 1 through June. 30, 2020)
Net sales		654,545
737,489
Cost of sales	(545,953)	(496,993)
Gross profit	191,536	157,551
Selling, general and administrative expenses	(150,705)	(137,390)
Share of profit (loss) of associates and joint ventures	657	418
accounted for using equity method
Operating profit	41,487	20,579
Other income
5,951	1,347
Other expenses	(5,319)	(4,244)
Business profit	42,120	17,682
Finance income		3,357
7,572
Finance costs	(7,136)	(4,583)
Net finance costs	436	(1,226)
Profit before tax	42,556	16,456
Income tax expenses	(6,223)	(3,193)
Profit for the period	36,332	13,262
Attributable to:
Owners of the parent	32,286	11,440
Non-controlling interests	4,045	1,821
Earnings per share
Basic earnings per share (yen)	145.95	51.70
Diluted earnings per share (yen)	145.29	51.49

- 4 -

(Condensed Interim Consolidated Statements of Comprehensive Income)

		(Unit: millions of yen)
	For the six months	For the six months
	ended June 30, 2019	ended June 30, 2020
	(Jan. 1 through June. 30, 2019)	(Jan. 1 through June. 30, 2020)
Profit for the period		13,262
36,332
Other comprehensive income
Components of other comprehensive income that
will not be reclassified to profit or loss, net of tax
Remeasurement of the net defined benefit liability	7,111	(11,719)
(asset)
Net gain (loss) on revaluation of financial assets	2,169	(13,590)
measured at FVTOCI (Note)
Share of other comprehensive income of
associates and joint ventures accounted for using	(68)	(3)
equity method
Total	9,213	(25,313)
Components of other comprehensive income that
may be reclassified to profit or loss, net of tax
Net gain (loss) in fair value of cash flow hedges	(759)	(178)
Exchange differences on translation of foreign	(25,704)	(41,210)
operations
Total	(26,463)	(41,389)
Other comprehensive income, net of tax	(17,250)	(66,702)
Total comprehensive income for the period		(53,440)
19,081
Attributable to:
Owners of the parent	15,731	(52,130)
Non-controlling interests	3,350	(1,309)

(Note) FVTOCI: Fair Value Through Other Comprehensive Income

- 5 -

1. Condensed Interim Consolidated Statements of Changes in Equity For the six months ended June 30, 2019

			(Unit: millions of yen)
Equity attributable to owners of the parent
			Other components of equity
				Net gain (loss)
Share capital Capital surplus	Retained	Treasury	Remeasurement on revaluation
	earnings	shares	of net defined	of financial
			benefit liability
			assets measured
			(asset)	at FVTOCI

(Note)

Balance as of January 1, 2019 Impact of change in accounting policy

Restated balance as of January 1, 2019

Changes in equity Comprehensive income

Profit for the period

Other comprehensive income

Total comprehensive income for the period

Transactions with owners Dividends

Acquisition of treasury shares Disposal of treasury shares

Transfer from other components of equity to retained earnings Share-based payment transactions

Others (business combinations and others)

Total transactions with owners Balance as of June 30, 2019

90,873	94,368	773,760	(28,821)		(37,767)	70,288
-	-	(168)	-		-	-
90,873	94,368	773,591	(28,821)		(37,767)	70,288
-		32,286		-		-		-
-
-	-	-	-		7,095	2,155
-	-	32,286	-		7,095	2,155
-					-
-	(13,289)		-			-
-	-	-		(7)		-		-
-	-	(129)		261		-		-
-	-	2,907		-		-		(2,907)
-	(2)	-		-		-		-
-	(68)	-	-		-	-
-	(71)	(10,511)	253		-	(2,907)
90,873	94,297	795,367	(28,567)		(30,672)	69,535

(Note) FVTOCI: Fair Value Through Other Comprehensive Income

- 6 -

For the six months ended June 30, 2019

(Unit: millions of yen)

Equity attributable to owners of the parent
Other components of equity
				Non-
	Exchange			Total equity
Net gain (loss)			controlling
differences on		Total	interests
in fair value of
translation of	Total
cash flow

hedges foreign operations

Balance as of January 1, 2019

Impact of change in accounting policy

Restated balance as of January 1, 2019

Changes in equity Comprehensive income

Profit for the period

Other comprehensive income

Total comprehensive income for the period

Transactions with owners Dividends

Acquisition of treasury shares Disposal of treasury shares

Transfer from other components of equity to retained earnings Share-based payment transactions

Others (business combinations and others)

Total transactions with owners Balance as of June 30, 2019

103	174,399	207,023	1,137,204	116,399	1,253,604
-	-	-	(168)	(117)	(286)
103	174,399	207,023	1,137,035	116,281	1,253,317
-		-		32,286		4,045		36,332
-
(727)	(25,078)	(16,554)	(16,554)	(695)	(17,250)
(727)	(25,078)	(16,554)	15,731	3,350	19,081
-
-	-		(13,289)		(3,301)		(16,591)
-	-	-		(7)		-		(7)
-	-	-		132		-		132
-	-	(2,907)		-		-		-
-	-	-		(2)		-		(2)
-	-	-	(68)	382	314
-	-	(2,907)	(13,236)	(2,918)	(16,155)
(623)	149,320	187,560	1,139,531	116,713	1,256,244

- 7 -

For the six months ended June 30, 2020

(Unit: millions of yen)

Equity attributable to owners of the parent

		Other components of equity
Share capital Capital surplus	Retained	Remeasurement	Net gain (loss)
earnings	Treasury shares of net defined	on revaluation
		benefit liability	of financial
		assets measured
		(asset)	at FVTOCI

(Note)

Balance as of January 1, 2020 Changes in equity

Comprehensive income Profit for the period

Other comprehensive income

Total comprehensive income for the period

Transactions with owners Dividends

Acquisition of treasury shares Disposal of treasury shares

Transfer from other components of equity to retained earnings Share-based payment transactions

Others (business combinations and others)

Total transactions with owners Balance as of June 30, 2020

90,873	92,593	811,589	(28,468)	(31,445)	55,786
-	-	11,440	-	-	-
-	-	-	-	(11,814)	(13,588)
-	-	11,440	-	(11,814)	(13,588)
-
-	(13,294)	-	-	-
-	-	-	(6)	-	-
-	-	(104)	228	-	-
-	-	498	-	-	(498)
-	(1)	-	-	-	-
-	1,671	-	-	-	-
-	1,669	(12,900)	221	-	(498)
90,873	94,262	810,129	(28,246)	(43,259)	41,699

(Note) FVTOCI: Fair Value Through Other Comprehensive Income

- 8 -

For the six months ended June 30, 2020

						(Unit: millions of yen)
		Equity attributable to owners of the parent
		Other components of equity
						Non-
			Exchange
		Net gain (loss)		Total	controlling	Total equity
		in fair value of	differences on	Total	interests
		cash flow	translation of
		foreign
		hedges
		operations
Balance as of January 1, 2020	(665)	166,833	190,510	1,157,097	125,538	1,282,636
Changes in equity
Comprehensive income
Profit for the period	-	-	-	11,440	1,821	13,262
Other comprehensive income	(202)	(37,964)	(63,570)	(63,570)	(3,131)	(66,702)
Total comprehensive income for	(202)	(37,964)	(63,570)	(52,130)	(1,309)	(53,440)
the period
Transactions with owners
Dividends	-	-	-	(13,294)	(4,089)	(17,383)
Acquisition of treasury shares	-	-	-	(6)	-	(6)
Disposal of treasury shares	-	-	-	123	-	123
Transfer from other
components of equity to	-	-	(498)	-	-	-
retained earnings
Share-based payment	-	-	-	(1)	-	(1)
transactions
Others (business combinations	-	-	-	1,671	3,539	5,210
and others)
Total transactions with owners	-	-	(498)	(11,507)	(550)	(12,058)
Balance as of June 30, 2020	(868)	128,869	126,440	1,093,459	123,678	1,217,137

- 9 -

(4) Condensed Interim Consolidated Statements of Cash Flows

		(Unit: millions of yen)
	For the six months	For the six months
	ended June 30, 2019	ended June 30, 2020
	(Jan. 1 through June. 30, 2019)	(Jan. 1 through June. 30, 2020)
Cash flows from operating activities
Profit before tax	42,556	16,456
Depreciation and amortization	69,460	72,199
Impairment losses	-	30
Interest and dividend income	(6,516)	(3,277)
Interest expenses	6,141	4,156
Share of profit (loss) of associates and joint ventures	(657)	(418)
accounted for using equity method
Loss (gain) on sale or disposal of non-current assets	364	1,289
Decrease (increase) in trade receivables	3,904	42,694
Decrease (increase) in inventories	(10,269)	(8,708)
Increase (decrease) in trade payables	(11,931)	(30,330)
Others	24,388	27,403
Subtotal
117,443	121,495
Interest and dividends received	6,683	3,638
Interest paid	(6,500)	(4,283)
Income taxes paid	(15,601)	(9,396)
Net cash from operating activities
102,024	111,453
Cash flows from investing activities
Purchase of property, plant and equipment and intangible	(92,110)	(85,056)
assets
Proceeds from sale of property, plant and equipment	2,193	2,036
Purchase of other financial assets	(791)	(22,367)
Proceeds from sale and redemption of other financial assets	8,227	2,269
Purchase of subsidiaries or other businesses	(39,465)	(1,031)
Others	779	(284)
Net cash used in investing activities
(121,167)	(104,434)
Cash flows from financing activities
Changes in short-terminterest-bearing debt	38,331	179,686
Proceeds from borrowing or issuing long-terminterest-bearing	60,004	161,904
debt
Repayment or redemption of long-terminterest-bearing debt	(58,969)	(61,489)
Proceeds from non-controlling interests	750	3,540
Acquisition of treasury shares	(7)	(6)
Dividends paid	(13,289)	(13,294)
Dividends paid to non-controlling interests	(3,301)	(4,089)
Others	0	4
Net cash used in financing activities	23,516	266,256
Effect of exchange rate changes on cash and cash equivalents	(2,532)	(4,465)
Net increase (decrease) in cash and cash equivalents	1,840	268,809
Cash and cash equivalents at the beginning of the period	123,503	113,784
Cash and cash equivalents at the end of the period	125,343	382,594

- 10 -

1. Notes to the Condensed Interim Consolidated Financial Statements (Changes in Accounting Policies)
   The significant accounting policies adopted for the Group's Condensed Interim Consolidated Financial Statements are the same as those for the Consolidated Financial Statements for the fiscal year ended December 31, 2019, with the exception of the items described below.

The following are the accounting standards applied by the Group from fiscal year 2020, in compliance with each transitional provision. The effect of the application of the following standards on the Group's Condensed Interim Consolidated Financial Statements is immaterial.

IFRS	Title	Summaries of new IFRS and amendments
IFRS 3
(amended in	Business Combinations	Clarification of the definition of a business
October 2018)
IAS 1	Presentation of Financial Statements
IAS 8
Accounting Policies, Change in	Clarification of the definition of materiality
(amended in
Accounting Estimates and Errors
October 2018)

"Operating profit" in the Group's Condensed Interim Consolidated Statements of Profit or Loss is an indicator that facilitates continuous comparisons and evaluations of the Group's business performance. Main items of "other income" and "other expenses" are foreign exchange gains and losses, gains on sale of non-current assets, losses on disposal of non-current assets, impairment losses and expenses for restructuring programs. "Business profit" includes all income and expenses before finance income, finance costs and income tax expenses.

The Group calculated income tax expenses for the six months ended June 30, 2020, based on the estimated average annual effective tax rate.

(Changes in Accounting Estimates)

In preparing the Group's Condensed Interim Consolidated Financial Statements, judgments, estimates and assumptions are made that affect the reported amounts of assets, liabilities, income and expenses. Therefore accounting estimates could differ from actual results.

Estimates and assumptions that have a significant effect on the amounts recognized in the Group's condensed interim consolidated financial statements are in principle the same as the preceding fiscal year.

Estimates and their assumptions are reviewed continuously. The effect of reviewing estimates and assumptions are recognized in the period in which those estimates and assumptions were reviewed and in future periods.

Regarding the impact of the spread of COVID-19, although there are differences in business and regions, the Group makes accounting estimates and judgments regarding impairment of assets such as property, plant and equipment, goodwill, intangible assets, and also recoverability of deferred tax assets, based on the assumption that Group's performance will gradually recover from the unfavorable business performance in the FY2020 2nd quarter, with the gradual resumption of economic activity.

- 11 -

(Segment Information)

The Group's reportable segments are components of the Group for which discrete financial information is available, and whose operating results are reviewed regularly by the Group's chief operating decision maker to make decisions about resources to be allocated to the segment and assess performance.

The Group had four in-house companies by product and service: Building & Industrial Glass, Automotive, Electronics and Chemicals. Each in-house company operates worldwide, formulating comprehensive domestic and overseas strategies for its products and services.

Building & Industrial Glass and Automotive share the same float glass manufacturing facilities (glass melting furnace) etc., which are the largest assets and situated the highest upstream in the supply chain. The two in- house companies share assets and liabilities, and ratio of utilization is influenced by fluctuations of demand and supply. Considering these situations, it is difficult to divide financial statements for the two in-house companies. Therefore, the Group prepares the financial statements of Building & Industrial Glass and Automotive as the Glass segment. In addition, decisions on assigning management resources are closely tied to the results of each business and inseparable from their performance evaluation. Therefore, with the participation of presidents of both in-house companies, the Group has established a "Glass Segment Council," which primarily functions to maintain synergies and maximize overall production in the Glass segment, and collaborates to maximize profits for the Group. Based on these circumstances, the Group reports the Glass segment as one.

Thus, the Group has three reportable segments: Glass, Electronics, and Chemicals. The main products of each reportable segment are as follows.

Reportable segment	Main products
	Float flat glass, Figured glass, Polished wired glass, Low-E glass, Decorative glass,
Glass	Fabricated glass for architectural use (Heat Insulating/shielding glass, Disaster-resistant/Security glass,
	Fire-resistant glass, etc.), Automotive glass, Cover glass for car-mounted displays, etc.
	LCD glass substrates, OLED glass substrates, Specialty glass for display applications,
Electronics	Display related materials, Glass for solar power system, Fabricated glass for industrial use,
Semiconductor process materials, Optoelectronics materials, Printed circuit board materials,
	Lighting glass products, Laboratory use ware, etc.
	Polyvinyl chloride, Vinyl chloride monomer, Caustic soda, Urethane, Fluorinated resins, Water and oil
Chemicals	repellents, Gases, Solvents, Pharmaceutical and agrochemical intermediates and active ingredients,
	Iodine-related products, etc.

- 12 -

For the six months ended June 30, 2019 (January 1 through June 30, 2019)

						(Unit: millions of yen)
							Amount
	Reportable segments				reported on
				condensed
				Ceramics/	Total	Adjustments	interim
				Other	consolidated
	Glass	Electronics	Chemicals				statements
				of profit or
							loss
Sales to external customers	374,329	118,378	227,877	16,904	737,489	-	737,489
Inter-segment sales or	858	6,219	671	23,489	31,239	(31,239)	-
transfers
Total sales	375,187	124,598	228,548	40,394	768,728	(31,239)	737,489
Segment profit (loss)	7,375	5,969	26,174	2,023	41,542	(54)	41,487
(Operating profit)
Profit for the period	-	-	-	-	-	-	36,332

The amounts of inter-segment sales or transfers are primarily based on market prices and manufacturing cost. "Ceramics/Other" mainly handles ceramics products, logistics and financial services.

For the six months ended June 30, 2020 (January 1 through June 30, 2020)

						(Unit: millions of yen)
							Amount
	Reportable segments				reported on
				condensed
				Ceramics/	Total	Adjustments	interim
				Other			consolidated
	Glass	Electronics	Chemicals				statements
				of profit or
							loss
Sales to external customers	293,039	135,136	211,613	14,755	654,545	-	654,545
Inter-segment sales or	1,173	3,441	817	23,448	28,880	(28,880)	-
transfers
Total sales	294,212	138,577	212,431	38,204	683,425	(28,880)	654,545
Segment profit (loss)	(20,752)	17,356	22,656	1,383	20,644	(65)	20,579
(Operating profit)
Profit for the period	-	-	-	-	-	-	13,262

The amounts of inter-segment sales or transfers are primarily based on market prices and manufacturing cost. "Ceramics/Other" mainly handles ceramics products, logistics and financial services.

- 13 -

(Notes to Other Income and Other Expenses)

Other Income

		(Unit: millions of yen)
	For the six months	For the six months
	ended June 30, 2019	ended June 30 2020
	(Jan. 1 through June. 30, 2019)	(Jan. 1 through June. 30, 2020)
Foreign exchange gain		-
2,417
Gains on sale of non-current assets	1,107	257
Others	2,426	1,089
Total	5,951	1,347

Other Expenses

		(Unit: millions of yen)
	For the six months	For the six months
	ended June 30, 2019	ended June 30 2020
	(Jan. 1 through June. 30, 2019)	(Jan. 1 through June. 30, 2020)
Foreign exchange loss		(251)
-
Losses on disposal of non-current assets	(1,471)	(1,547)
Expenses for restructuring programs	(2,911)	(765)
Others	(935)	(1,680)
Total	(5,319)	(4,244)

(Notes on Significant Subsequent Events)

（Acquisition of shares of Molecular Medicine S.p.A.）

At the Company's Board of Directors meeting held on March 16, 2020, the AGC Group decided to acquire all of the common shares of Molecular Medicine S.p.A., which operates in the field of gene and cell therapy, through a voluntary tender offer, and as a result, is planning to make Molecular Medicine S.p.A. a subsidiary as of July 31, 2020.

Outline of the acquisition
①	Name of the acquiree	Molecular Medicine S.p.A.
②	Business of the acquiree	Gene / Cell therapy Development / CDMO

• Main reasons for the acquisition

The AGC Group positions the life science business including the biopharmaceutical CDMO business as one of its strategic businesses, and aims to achieve sales of 100 billion yen or more by 2025.

With this acquisition of Molecular Medicine S.p.A., the AGC Group will newly enter the field of gene and cell therapy, which is an advanced technology field, and expand the scope of CDMO business not only in synthetic and current biopharmaceuticals but also into gene and cell therapy.

④	Acquisition date	July 31, 2020 (Expectation)
⑤	Legal structure of acquisition	Acquisition of shares
⑥	Cash consideration of the shares acquired	223 Million EUR
⑦	Voting rights ratio after acquisition of shares	93.23%

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