Toray Industries : Consolidated Results for the Nine Months Ended December 31, 2022

Note: This document has been translated from a part of the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

February 8, 2023

[Summary] Consolidated Financial Results for the Nine Months Ended December 31, 2022 (Under IFRS)

Company name:	Toray Industries, Inc.
Listing:	Tokyo Stock Exchange
Securities code:	3402
URL:	www.toray.com
Representative:	Akihiro Nikkaku, President
Inquiries:	Toshiki Matsumura, General Manager, Corporate Communications Department
Telephone:	[phone]

Scheduled date to file quarterly securities report:	February 10, 2023
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results briefing:	Yes (for Securities Analysts/
	Institutional Investors)

(Yen amounts are rounded to the nearest million.)

1. Consolidated financial results for the nine months ended December 31, 2022 (from April 1, 2022 to December 31, 2022)

(1) Consolidated financial performance		(Percentages indicate year-on-year changes.)
		Revenue		Core operating income	Operating income	Profit before tax
	Nine months ended	Millions of yen		%	Millions of yen	%	Millions of yen		%	Millions of yen		%
	December 31,	1,901,800		15.5	80,436	(24.1)	98,667		(4.3)	109,015		(9.5)
	2022
	December 31,	1,646,872		20.7	105,982	58.3	103,148		185.0	120,507		181.0
	2021
		Profit		Profit attributable to	Basic earnings	Diluted earnings
			owners of parent	per share		per share
	Nine months ended	Millions of yen	%	Millions of yen	%			Yen			Yen
	December 31,	80,638		(17.6)	74,553	(16.5)			46.57			46.48
2022
	December 31,	97,859		236.6	89,306	220.1			55.79			55.22
2021

Notes:

1. Comprehensive income for the nine months ended December 31, 2022 and 2021 were ¥148,189 million (8.5%) and ¥136,602 million (130.6%), respectively.
2. Core operating income is calculated by excluding income and expenses due to non-recurring factors from operating income.

(2) Consolidated financial position

	Total assets	Total equity
As of	Millions of yen	Millions of yen
December 31,	3,264,567	1,615,041
2022
March 31, 2022	3,043,881	1,499,649

Equity attributable to

owners of parent

Millions of yen

1,516,511

1,405,591

Equity ratio

%

46.5

46.2

2. Cash dividends
					Annual dividends per share
			First quarter-end		Second quarter-		Third quarter-end	Fiscal year-end		Total
				end
			Yen		Yen		Yen	Yen		Yen
	Year ended		-	8.00	-	8.00	16.00
	March 31, 2022
	Year ending		-	9.00	-
	March 31, 2023
	Year ending
	March 31, 2023							9.00	18.00
	(Forecast)
Note: Revisions to the forecast of cash dividends most recently announced: None

3. Segment information

Revenue	Nine months ended December 31,
2022	2021		Change
		Millions of yen	Millions of yen		%
Fibers & Textiles	784,775	631,603		24.3
Performance Chemicals	698,311	678,119		3.0
Carbon Fiber Composite Materials	211,203	153,191		37.9
Environment & Engineering	156,161	134,580		16.0
Life Science	40,196	38,586		4.2
Other	11,154	10,793		3.3
Consolidated total	1,901,800	1,646,872		15.5
Core operating income		Nine months ended December 31,
	2022	2021		Change
		Millions of yen	Millions of yen	%
Fibers & Textiles	39,599	35,474		11.6
Performance Chemicals	29,979	74,616		(59.8)
Carbon Fiber Composite Materials	11,801	(1,898)		-
Environment & Engineering	12,857	10,882		18.1
Life Science	592	1,599		(63.0)
Other	1,123	1,493		(24.8)
Total	95,951	122,166		(21.5)
Reconciliations	(15,515)	(16,184)		-
Consolidated total	80,436	105,982		(24.1)

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, 2022 of ¥(15,515) million include intersegment eliminations of ¥362 million and corporate expenses of ¥(15,877) million. "Reconciliations" of core operating income for the nine months ended December 31, 2021 ¥(16,184) million include intersegment eliminations of ¥679 million and corporate expenses of ¥(16,863) million. The corporate expenses consist of the headquarters' research expenses that are not allocated to each reportable segment.

1. Consolidated financial forecasts for the fiscal year ending March 31, 2023 (from April 1, 2022 to March 31, 2023)

					(Percentages indicate year-on-year changes.)
	Revenue		Core operating income	Profit attributable to	Basic earnings
		owners of parent	per share
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Year ending	2,510,000	12.6	100,000	(24.3)	72,000	(14.5)	44.97
March 31, 2023

Note: Revisions to the forecast of consolidated financial forecast most recently announced: Yes

* Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None
2. Changes in accounting policies and changes in accounting estimates
3. 1. Changes in accounting policies required by IFRS: None
   2. Changes in accounting policies due to other reasons: None
   3. Changes in accounting estimates: None
4. Number of issued shares (ordinary shares)
5. 1. Total number of issued shares at the end of the period (including treasury shares)

As of December 31, 2022	1,631,481,403 shares
As of March 31, 2022	1,631,481,403 shares

(ii) Number of treasury shares at the end of the period

As of December 31, 2022	30,460,332 shares
As of March 31, 2022	30,761,629 shares

(iii) Average number of shares outstanding during the period

Nine months ended December 31, 2022	1,600,941,019	shares
Nine months ended December 31, 2021	1,600,635,236	shares

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
• Proper use of earnings forecasts, and other special matters
  Earnings forecasts given herein have been prepared based on assumptions such as economic environment outlook available as of the publication of this report and these forecasts are not guarantees of future performance. Actual results may differ significantly from forecasts due to various factors. For the assumptions underlying the forecasts herein, please refer to "Consolidated Financial Performance and Financial Position 3. Forecast for the Fiscal Year Ending March 31, 2023" of the accompanying materials.

Consolidated Financial Performance and Financial Position

1. Overview of the Nine Months Ended December 31, 2022

During the period under review, the global economy saw a slowdown in growth due to high material prices associated with the Ukraine situation, lockdown in China in line with its zero- COVID policy, and the impact of rising inflation and interest rates particularly in Europe and the U.S. The Japanese economy continued to recover from the COVID-19 pandemic, although rising materials cost combined with the sudden weakening of the yen exerted downward pressure on the recovery.

Under such circumstances, Toray Group has been implementing its new medium-term management program "Project AP-G 2022" since May 2020, aiming to achieve sound, sustainable growth through the implementation of basic strategies such as global expansion in growth business fields, strengthening competitiveness, and strengthening the management foundation. In the period under review, the time lag between the fluctuation in raw material and fuel prices and the price pass-through, as well as inventory adjustments in the supply chain affected the income and expenses.

As a result, consolidated revenue for the nine months ended December 31, 2022, increased 15.5% compared with the same period a year earlier to ¥1,901.8 billion, while core operating income (Note 1) declined 24.1% to ¥80.4 billion. Operating income decreased 4.3% to ¥98.7 billion and profit attributable to owners of parent fell 16.5% to ¥74.6 billion.

Financial performance by segment is described below.

Financial Performance by Segment:

Fibers & Textiles

While hygiene material applications were sluggish from the impact of the worsening supply- demand balance, apparel applications saw a recovery from the pandemic. Industrial applications witnessed a demand recovery trend for automobile applications in some regions. Almost all applications and regions were affected by the soaring costs of raw materials and fuels as well as transportation.

As a result, revenue of overall Fibers & Textiles segment increased 24.3% to ¥784.8 billion compared with the same period a year earlier and core operating income rose 11.6% to ¥39.6 billion.

Performance Chemicals

The Performance Chemicals segment overall was affected by the soaring raw material and fuel prices.

The resins business was weak given the slow recovery in domestic automobile applications and the decline in demand in China. In the films business, polyester films were affected by demand slowdown in optical applications and electronic parts. In the electronic & information materials business, demand for OLED-related materials and circuit materials decreased.

As a result, revenue of overall Performance Chemicals segment increased 3.0% to ¥698.3 billion compared with the same period a year earlier while core operating income declined 59.8% to ¥30.0 billion.

Carbon Fiber Composite Materials

Demand for the aerospace applications showed a recovery trend and the sales of pressure vessels in the industrial applications expanded. In addition, the segment went forward with passing on the rise in raw material and fuel prices to the sales price.

As a result, revenue of overall Carbon Fiber Composite Materials segment increased 37.9% to ¥211.2 billion compared with the same period a year earlier. The segment posted core operating income of ¥11.8 billion, an improvement of ¥13.7 billion from the same period a year earlier.

Environment & Engineering

In the water treatment business, demand products grew strongly and facilities that performance.

for reverse osmosis membranes and other newly started operations contributed to the

Among domestic subsidiaries in the segment, an engineering subsidiary experienced increases in the shipment of lithium-ion secondary battery-related equipment.

As a result, revenue of overall Environment & Engineering segment increased 16.0% to ¥156.2 billion compared with the same period a year earlier and core operating income rose 18.1% to ¥12.9 billion.

Life Science

In the pharmaceutical business, sales of pruritus treatment REMITCH® (Note 2) were affected by the introduction of its generic versions as well as by a NHI drug price revision.

In the medical devices business, shipment of dialyzers for hemodiafiltration grew strongly in Japan, but the business was affected by the soaring prices of raw materials and fuels.

As a result, revenue of overall Life Science segment increased 4.2% to ¥40.2 billion compared with the previous fiscal year, while core operating income decreased 63.0% to ¥0.6 billion.

Notes:

1. Core operating income is calculated by excluding income and expenses due to non- recurring factors from operating income.
2. REMITCH® is a registered trademark of Torii Pharmaceutical Co., Ltd.