Teijin : Consolidated Financial Statements Summary (For the year ended March 31, 2021)

Consolidated Financial Statements Summary

(For the year ended March 31, 2021)
English translation from the original Japanese-language document
(All financial information has been prepared in accordance with accounting principles generally accepted in Japan)			May 11,	2021
Company name	: TEIJIN LIMITED (Stock code 3401)		https://www.teijin.com
Contact person	: Tomoko Torii	General Manager,		TEL: [phone]
		Investor Relations Department		(Amounts rounded to the nearest million yen)
1. Results of FY2020 (April 1, 2020 through March 31, 2021)
(1) Consolidated financial results					(Percentages are year-on-year changes)
Period	Net sales	Operating income	Ordinary income		Profit attributable to
	owners of parent
	Million yen	%	Million yen	%	Million yen	%	Million yen		%
FY2020	836,512	-2.0	54,931	-2.3	53,658	-1.2	(6,662)		―
FY2019	853,746	-3.9	56,205	-6.3	54,337	-9.8	25,252	-44.0

cf.Comprehensive income; For FY 2020 : 25,363 million yen ( For FY 2019 : -1,436 million yen)

Period	E.P.S. *1	Diluted E.P.S.	ROE *2	ROA *3	Ratio of operating
income to net sales
	Yen	Yen	%	%	%
FY2020	(34.70)	―	-1.7	5.3	6.6
FY2019	131.63	124.43	6.3	5.4	6.6

*1 E.P.S.: Earnings per share *2 ROE: Ratio of Profit (loss) attributable to owners of parent to Shareholders' equity

*3 ROA: Ratio of Ordinary income to Total assets

cf. Equity on gain and losses of unconsolidated subsidiaries and affiliates; For FY2020: 2,548 million yen (For FY2019: 1,997 million yen)

(2) Consolidated financial position

	Total assets	Net assets	Shareholders' equity	Shareholders' equity
	ratio	per share
	Million yen	Million yen	%	Yen
As of March 31, 2021	1,036,427	428,257	39.2	2,115.61
As of March 31, 2020	1,004,223	411,409	39.3	2,053.57

cf. Shareholders' equity as of March 31, 2021 : 406,150 million yen (As of March 31, 2020 : 394,162 million yen)

(3) Consolidated cash flows

Period

From operating activities

From investing activities

From financing activities

Cash & cash equivalents

at end of period

Million yen

Million yen

Million yen

Million yen

FY2020

107,729

(79,587)

(20,878)

166,455

FY2019

94,214

(67,922)

(8,059)

156,290

2. Dividends

Dividends per share

Total dividends paid

Payout ratio

Dividend on equity

Period

1Q

2Q

3Q

4Q

Annual

(Annual)

(Consolidated)

(Consolidated)

Yen

Yen

Yen

Yen

Yen

Million yen

%

%

FY2019

―

30.00

―

30.00

60.00

11,513

45.6

2.9

FY2020

―

25.00

―

25.00

50.00

9,598

―

2.4

FY2021

―

27.50

―

27.50

55.00

30.2

(Outlook)

3. Forecast for operating results of FY2021 (April 1, 2021 through March 31, 2022)

(Percentages are year-on-year changes)

	Net sales		Operating income	Ordinary income	Profit attributable to	E.P.S.
Period		owners of parent
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
FY2021	870,000	4.0	60,000	9.2	60,000	11.8	35,000	―	177.84

4. Other information

1. Changes in specific subsidiaries involving changes in the scope of consolidation: Yes

New consolidated subsidiaries: CSP Victall (Tangshan) Structural Composites Co.,Ltd.

(2)Shares issued (common stock)

Shares issued (including treasury stock) at end of term

As of March 31, 2021	197,953,707
As of March 31, 2020	197,953,707
Treasury stock
As of March 31, 2021	5,975,760
As of March 31, 2020	6,013,284

Average shares outstanding during the period

FY 2020	191,956,835
FY 2019	191,836,956

Reference: Individual results of FY2020 (April 1, 2020 through March 31, 2021)

(1) Individual financial results						(Percentages are year-on-year changes)
		Net sales		Operating income		Ordinary income		Net income
		Million yen	%	Million yen	%	Million yen	%	Million yen	%
FY2020		110,027	-11.6	(2,203)		―	16,987	-47.4	(14,669)	―
FY2019		124,396	-6.8	3,642		-60.6	32,279	-27.0	28,487	-11.0
		E.P.S.	Diluted E.P.S.
		Yen		Yen
FY2020		(76.42)		―
FY2019		148.50		140.38
(2) Individual financial position
		Total assets		Net assets		Shareholders' equity		Shareholders' equity
				ratio		per share
		Million yen		Million yen		%		Yen
FY2020	559,504		239,333		42.7		1,243.18
FY2019	559,327		256,557		45.8		1,333.56

cf. Shareholders' equity as of March 31, 2021 : 238,663 million yen (As of March 31, 2020 : 255,963 million yen)

Appropriate Use of Forecasts and Other Information and Other Matters

All forecasts in this document are based on management's assumptions in light of information currently available and involve certain risks and uncertainties. Actual results could differ materially from these forecasts. For information on these forecasts, refer to "Outlook for FY 2021," beginning on page 4.

1. Qualitative Information

( 1 ) Qualitative Information on Results of Operations 1 ) Analysis of Consolidated Results of Operations

The global COVID-19 pandemic and the resulting governmental restrictions on people's activities have caused the global economy to remain sluggish and face high uncertainty. The pandemic severely affected the global economy especially in the first half of this term, and then the economy turned around once. However, subsequent waves of the pandemic slowed economic recovery worldwide in the second half of the term.

The Teijin Group formulated its Medium-Term Management Plan for the three years from FY2020, which the Group positions as a period for creating growth platforms toward sustainable growth, under its long-term vision of becoming a company that supports the society of the future by contributing to realizing a sustainable world. In FY2020, the first fiscal year of the Plan, as prior investments in enhancing profitability in the Materials Business Field toward the future, the Group made capital investment in increasing its para-aramid fiber production capacity, and implemented two plant projects in North America: one to build a new composites plant in Texas and the other to prepare for the operation of a new carbon fibers plant. In the Healthcare Business Field, the Group decided to take over the rights for the Japan sales of diabetes treatments from Takeda Pharmaceutical Company Limited, and in collaboration field between business fields, the Group brought Japan Tissue Engineering Co., Ltd. (hereinafter, "J-TEC") under its umbrella as a subsidiary through a TOB with the aim of entering the regenerative medicine business.

Increased demand amid the COVID-19 pandemic for medical protective equipment (gowns, etc.) in the Fibers & Products Converting Business and for products and services in the IT Business contributed to the Teijin Group's consolidated financial results for this term. Also, the Healthcare Business Field remained solid despite the impact of drug price revisions. Meanwhile, in the Materials Business Field, the Group was affected by reduced demand for products mainly for automotive and aircraft applications. Accordingly, the Teijin Group posted net sales of 836.5 billion yen, a 2.0% decrease year on year, operating income of 54.9 billion yen, a 2.3% decline year on year, and ordinary income of

53.7 billion yen, a1.2% decrease year on year. Profit attributable to owners of parent was −6.7 billion yen (ref.: 25.3 billion yen for the previous fiscal year) mainly due to the recording of an impairment loss on fixed assets owned by the carbon fibers business under the impact of an expected long-term decline in aircraft demand.

As a result, ROE, an indicator of profitability, was −1.7%, far short of the FY2022 target set in the Medium-Term Management Plan (over 10%), while EBITDA, an indicator of the ability to generate cash, was 106.8 billion yen, remaining at the same level as in the previous fiscal year despite the impact of the COVID-19 pandemic. ROIC, based on operating income, of 8.6% met the FY2022 target set in of the Medium-Term Management Plan (over 8%).

2 ) Business Segment Results

1. Materials Business Field

Although the COVID-19 pandemic reduced demand for products for automotive and aircraft applications, the recovery in the automotive market in the second half of the term led to an upturn in sales of products for automotive applications. In each subsegment, SG&A expenses cut by limited activities.

In the Materials Business Field, sales were 297.0 billion yen, a decrease of 30.6 billion yen (9.3%) year on year, while operating income was 1.0 billion yen, a decline of 14.9 billion yen (94.0%) year on year. EBITDA was 31.5 billion yen,

1

decreasing by 13.3 billion yen year on year.

In the aramid business, Twaron para-aramid fibers, the major product in the business, experienced a sales decline for all applications, including tire reinforcing material, friction material, and other automotive applications, as well as optical fibers. However, the product's sales later improved in line with the recovery in the relevant markets.

In the resin and plastic processing business, sales of polycarbonate resins, the main product in the business, recovered from the second half of the term and reached the same level as in the previous term. Under the impact of a sharp rise in the market price of BPA, a key raw material, from the second half of the term, selling price revision is under way.

In the carbon fibers business, sales of TENAX carbon fibers drastically dropped for aircraft applications due to reduced demand in the aircraft market. Therefore, greater sales efforts were focused on non-aircraft applications, such as wind power generation and recreation applications. Sustained efforts toward future growth have been made, including developing intermediate materials for aircraft applications and making the necessary investment for putting into operation a new plant in North America.

In the composites business, a significant decrease in OEM production had a severe impact on the production and sales of automotive parts at Continental Structural Plastics Holdings Corporation(CSP) in the United States at the beginning of the term. However, the recovery in the U.S. automotive market, especially for SUVs and pickup trucks, led to a remarkable improvement in automotive parts production and sales. The continued provision of a relatively high level of unemployment benefits in the U.S. has posed CSP the challenge of securing workforce sufficient to support its recovering plant operations. To address the challenge, CSP has been adopting measures to improve the employee retention rate.

1. Healthcare Business Field

Despite the impact of drug price revisions on FEBURIC and other pharmaceutical products distributed in Japan, sales of FEBURIC and home healthcare services grew. Amid the COVID-19 pandemic, the adoption of online remote sales activities and other new approaches caused a decrease in SG&A expenses

In the Healthcare Business Field, sales were 148.7 billion yen, a drop of 5.3 billion yen (3.4%) year on year, while operating income was 31.5 billion yen, a decline of 1.0 billion yen (3.2%) year on year. EBITDA was 43.7 billion yen, a decrease of 0.9 billion yen year on year.

In the pharmaceutical business, products for the Japanese market, especially the hyperuricemia and gout treatment FEBURIC, were affected by drug price revisions in April 2020. However, sales of FEBURIC and Somatuline*, a treatment for acromegaly, pituitary gigantism, and neuroendocrine tumors, increased steadily.

* Somatuline® is the registered trademark of Ipsen Pharma, France.

In the home oxygen therapy (HOT) market, an increased number of patients chose to use home healthcare services to avoid in-hospitalCOVID-19 infection. Together with other circumstances, including the more widespread use of portable oxygen concentrators, the increased number of home healthcare users resulted in a growth in the number of rented units of HOT equipment. In the market for continuous positive airway pressure (CPAP) therapy, the COVID-19 pandemic caused a decline in the number of patients hospitalized for examination and slowed the expansion of the market.

2

However, the market for CPAP devices for use by medical practitioners has been growing, with the number of rented CPAP devices continuously increasing. In addition, the relaxation of requirements for counting remote monitoring in medical fee calculation led an increasing number of medical institutions to introduce NemLink, a medical treatment support tool.

In the new healthcare business, the COVID-19 pandemic caused surgeries to be postponed and reduced the sales volume of orthopedic implantable devices, including artificial joints and absorbable osteosynthesis materials, at the beginning of the term. However, a recovery in the number of surgical operations and the growth in sales of new products from the second quarter resulted in a year-on-year increase in annual sales.

1. Fibers & Products Converting Business

In the Fibers & Products Converting Business, sales were 314.9 billion yen, an increase of 8.6 billion yen (2.8%) year on year, while operating income was 17.5 billion yen, an increase of 12.1 billion yen (223.3%) year on year. EBITDA was 23.9 billion yen, a growth of 11.5 billion yen year on year.

The COVID-19 pandemic hurt sales of textiles and heavy clothing, but boosted demand for medical protective equipment (gowns, etc.) for the use of medical professionals, leading the Fibers & Products Converting Business to contribute immensely to the Group's business performance by supplying those items of equipment. Sales of clothes of the kind that satisfied stay-at-home demand were robust, while sales of masks with improved infection-control functions, short polyester fibers for water treatment use, and other products also remained strong. In addition, sales of automotive parts, which were poor at the beginning of the term, started taking a clear upward trend in the second half of the term. The decreased SG&A expenses due to limited business activities also contributed to the business results.

IV. IT Business

In the IT Business, sales were 58.1 billion yen, up 9.5 billion yen (19.6%) year on year, while operating income was 10.4 billion yen, an increase of 2.6 billion yen (32.9%) year on year. EBITDA was 11.3 billion yen, growing by 2.6 billion yen year on year.

The business solution field was affected by the COVID-19 pandemic especially in terms of services for medical institutions. However, sales of e-comics services in the digital entertainment field remained strong against the background of an increased e-comics readership.

1. Others

In the others, sales were 17.8 billion yen, an increase of 0.5 billion yen (2.7%) year on year, while the operating loss was

0.2 billion yen (ref.: operating income of 0.3 billion yen for the previous fiscal year). EBITDA was 0.7 billion yen, a decrease of 0.6 billion yen year on year.

The Teijin Group brought J-TEC, a company listed on the Tokyo Stock Exchange's JASDAQ Growth market, under its umbrella as a subsidiary through a TOB. The new subsidiary has been consolidated since the end of the term.

3