Toray Industries : Consolidated Results for the Nine Months Ended December 31, 2020

February 9, 2021

Toray Announces Consolidated Results

for the Nine Months Ended December 31, 2020

Tokyo, February 9, 2021 - Toray Industries, Inc. ("Toray") today announced its consolidated business results for the nine months ended December 31, 2020 of the fiscal year ending March 31, 2021 (FY2020). The following summary of the business results that Toray submitted to the Tokyo Stock Exchange is unaudited and for reference only. (Code Number: 3402)

Consolidated Financial Performance

(Millions of yen, except per share data)

	Nine months ended December 31,
	2020	2019	Change (%)
Revenue	¥1,364,206	¥1,586,583	(14.0)
Core operating income	66,968	104,132	(35.7)
Operating income	36,190	99,302	(63.6)
Profit before tax	42,885	107,562	(60.1)
Profit	29,072	81,961	(64.5)
Profit attributable to owners of parent	27,899	74,993	(62.8)
Basic earnings per share (yen)	17.43	46.87	-
Diluted earnings per share (yen)	17.41	46.44	-

Consolidated Financial Position

		(Millions of yen)
	As of December 31, 2020	As of March 31, 2020
Total assets	¥2,773,113	¥2,733,520
Total equity	1,233,496	1,200,846
Equity attributable to owners of parent	1,150,680	1,116,075
Equity ratio	41.5%	40.8%

Cash Dividends

					(Yen)
		Cash dividends per share
	1Q	2Q	3Q	4Q	Total
FY2019	-	¥8.00	-	¥8.00	¥16.00
FY2020	-	4.50	-
FY2020 (forecast)				4.50	9.00

Notes:

1. Comprehensive income for the nine months ended December 31, 2020 and 2019 were ¥59,238 million and ¥69,428 million, respectively.
2. Core operating income is calculated by excluding income and expenses due to non-recurring factors from operating income.
3. Revisions to the forecast of cash dividends since the latest announcement: none

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4. Toray Group has adopted the International Financial Reporting Standards ("IFRS") since the first quarter of the year ending March 31, 2021. Figures for the nine months ended December 31, 2019 and the year ended March 31, 2020 are also stated in accordance with IFRS.

Segment Information

			(Millions of yen)
Revenue	Nine months ended December 31,
2020	2019	Change (%)
Fibers & Textiles	¥536,335	¥641,251	(16.4)
Performance Chemicals	519,896	581,988	(10.7)
Carbon Fiber Composite Materials	134,943	179,548	(24.8)
Environment & Engineering	124,579	130,361	(4.4)
Life Science	38,406	40,341	(4.8)
Other	10,047	13,094	(23.3)
Consolidated total	1,364,206	1,586,583	(14.0)
			(Millions of yen)
Core Operating Income	Nine months ended December 31,
2020	2019	Change (%)
Fibers & Textiles	¥27,971	¥47,954	(41.7)
Performance Chemicals	47,645	47,010	1.4
Carbon Fiber Composite Materials	(3,713)	18,085	-
Environment & Engineering	7,991	5,513	44.9
Life Science	1,773	1,622	9.3
Other	1,743	2,049	(14.9)
Total	83,410	122,233	(31.8)
Reconciliations	(16,442)	(18,101)	-
Consolidated total	66,968	104,132	(35.7)

Notes:

1. "Other" represents service-related businesses such as analysis, physical evaluation and research.
2. "Reconciliations" of core operating income for the nine months ended December 31, 2020 of ¥(16,442) million includes intersegment eliminations of ¥590 million and corporate expenses of
   ¥(17,032) million. "Reconciliations" of core operating income for the nine months ended December 31, 2019 of ¥(18,101) million includes intersegment eliminations of ¥122 million and corporate expenses of ¥(18,223) million. The corporate expenses consist of the headquarters' research expenses that are not allocated to each reportable segment.
3. Core operating income is calculated by excluding income and expenses due to non-recurring factors from operating income.

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Forecast of Consolidated Results for the Fiscal Year Ending March 31, 2021

	Year ending
	March 31, 2021
	Millions of yen	Change (%)
Revenue	¥1,870,000	(10.6)
Core operating income	90,000	(28.3)
Profit attributable to owners of parent	39,000	(53.7)
Basic earnings per share (yen)	24.37	-

Notes:

1. The changes (%) for the full-year forecast are compared with the previous fiscal year.
2. Revisions to the forecast of consolidated results since the latest announcement: yes

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Consolidated Financial Performance and Financial Position

1. Overview of the Nine Months Ended December 31, 2020

During the period under review, the global economy was hit hard by the novel coronavirus (COVID-19) pandemic. The stagnation in production and consumption activities as well as the disruption to supply chains caused by the restrictions on international movement of people and goods resulted in chaos in both Japanese and overseas economies, causing a record-setting drop in the economy. Subsequently, the global economy rebounded around July, as economic activities resumed, initially in China and followed by the U.S. and Europe.

Under such circumstances, Toray Group in May 2020 launched the new medium-term management program "Project AP-G 2022" aimed at achieving sound, sustainable growth through the implementation of basic strategies such as global expansion in growth business fields, strengthening competitiveness, and strengthening the management foundation.

As a result, consolidated revenue for the nine months ended December 31, 2020, declined 14.0% compared with the same period a year earlier to ¥1,364.2 billion, and core operating income fell 35.7% to ¥67.0 billion. Operating income declined 63.6% to ¥36.2 billion and profit attributable to owners of parent declined by 62.8% to ¥27.9 billion as a U.S. subsidiary recorded an impairment loss.

Financial performance by segment is described below.

Financial Performance by Segment:

Fibers & Textiles

The segment was affected by the stagnation in production activities and consumption behavior caused by the COVID-19 in Japan and overseas. In the apparel applications, demand declined due to lockdown and excessive channel inventory in various countries, while in industrial applications, general purpose materials remained weak and sales volume declined. Demand for nonwoven fabrics increased for the applications of medical gowns and masks and there were signs of recovery in the automotive applications in the third quarter, but these factors fell short of offsetting the decline in the overall sales volume in the segment.

As a result, revenue of overall Fibers & Textiles segment declined 16.4% to ¥536.3 billion compared with the same period a year earlier and core operating income fell 41.7% to ¥28.0 billion.

Performance Chemicals

The resins business was affected by the stagnation in production activities caused by the COVID-19, but demand was strong in the third quarter with automobile manufacturers operating and the recovery of the Chinese economy. The chemicals business saw a recovery trend in the basic chemicals market. In the films business, battery separator films for lithium-ion secondary batteries were affected by lower market

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