140120120801088831

Teijin Limited

August 2, 2012

Flash Report

-1Q Results and FY12 Outlook-

Outline of FY12 1Q Results

2

Sales Operating income Net income

Quarterly Movement

6.3

2.9

5.9

-3.1

-1.6

-1.3

-5

0

5

10

1Q 2Q 3Q 4Q 1Q

189.6

204.0

201.9

258.9

174.3

195.6

0

50

100

150

200

250

300

1Q 2Q 3Q 4Q 1Q

11.0

9.6

9.7

3.7 3.0

4.9

0

10

20

1Q 2Q 3Q 4Q 1Q

（¥ bn）

1. Outline of FY12 1Q Results

Note: The dotted lines in the graphs above do not include the impact of the standardization of accounting periods

(1) Consolidated Results Highlights

-13.2

-3.4

1.2

34.0

4.9

-20

0

20

40

60

1Q 2Q 3Q 4Q 1Q

FCF

3

FY11

1Q

FY12

1Q Difference

(¥ bn)

Net sales 189.6 174.3 -15.2

Operating income 11.0 3.0 -8.1

OP margin 5.8% 1.7% ―

Nonoperating items (net) 1.8 (0.8) -2.5

Ordinary income 12.8 2.2 -10.6 Extraordinary items

(net) (0.1) (2.5) -2.4

Income (loss) before income

taxes 12.7 (0.3) -13.0

Income taxes 5.9 1.6 -4.3 Minority interests in income

(loss) 0.5 (0.2) -0.7

Net income (loss) 6.3 (1.6) -7.9

EPS (¥) 6.38 (1.66) -8.04

EBITDA *1 22.5 14.3 -8.2

CAPEX *2 5.0 8.0 +3.0

Depreciation & amortization 11.4 11.4 -0.1

R&D expenses 7.2 7.6 +0.4

FCF (13.2) 4.9 +18.2

◆ Operating Results

*1 EBITDA = Operating income + Depreciation & amortization

*2 CAPEX includes investments in intangible assets

◇PL exchange rate

FY11

1Q (January – March)*

FY12

1Q (April – June)

¥/US$ 82 80

¥/€ 113 103

US$/€ 1.37 1.28


Net sales and operating income: Down from the first quarter of FY11, owing to the impact of the European sovereign debt crisis, intensified competition and the revision of drug reimbursement prices

Ordinary income: Down, reflecting a decline in equity in earnings of affiliates

Net loss: Primarily a result of the further deterioration of net extraordinary items

* Rates used for FY11 1Q are for the three months ended March 31, 2012, to account for the impact of the standardization of accounting periods

4

(¥ bn)

FY11

1Q

FY12

1Q Difference

Gain on sales of property, plant

and equipment 0.0 0.1 +0.0

Gain on sales of investment

securities 0.7 — -0.7

Others 0.2 0.0 -0.2

Extraordinary income, total 0.9 0.1 -0.8 Loss on sales and retirement of

noncurrent assets 0.0 0.2 +0.1

Loss on valuation of investment

securities — 0.8 +0.8

Impairment loss 0.0 0.7 +0.6 Provision for allowance for

doubtful receivables 0.4 — -0.4

Earthquake-related expenses 0.4 — -0.4

Flood-related expenses — 0.9 +0.9

Others 0.1 0.0 -0.1

Extraordinary losses, total 1.0 2.6 +1.6

Extraordinary items, total (0.1) (2.5) -2.4

Income taxes 5.9 1.6 -4.3

Minority interests in income (loss) 0.5 (0.2) -0.7

◆ Extraordinary items


Extraordinary items: Net extraordinary items were a loss of ¥2.5 billion, compared with a loss of ¥0.1 billion in fiscal 2011

• Flood-related expenses: Loss of ¥0.9 billion due to severe flooding in Thailand (primarily costs for the restoration of production equipment)

• Loss on valuation of investment securities: ¥0.8 billion

Income taxes, others

• Loss before income taxes: ¥0.3 billion

However, amortization of goodwill and equity in earnings of affiliates, among others, are not tax deductible

Accordingly, income was positive for income tax purposes ⇒ Liable for income taxes

5

March 31,

2012

June 30,

2012 Difference

(Impact of foreign

exchange rate) (¥ bn)

Total assets 762.1 739.7 -22.4 -13.7

Shareholders’

equity 292.0 279.8 -12.3 -5.1

Interest-bearing

debt 261.0 254.7 -6.3 -5.3

D/E ratio 0.89 0.91 +0.02

Shareholders’

equity ratio 38.3% 37.8% -0.5%

◆ Financial Position

◆ Cash Flows March 31,

2012

June 30,

2012

¥/US$ 82 79

¥/€ 110 99

US$/€ 1.34 1.24

◇BS exchange rate

(¥ bn) Operating

activities

Investing

activities FCF

Financing

activities

Cash & cash

equivalents

FY12 1Q +14.0 -9.1 +4.9 -3.7 +1.3

FY11 1Q -8.0 -5.3 -13.2 +9.3 -3.9

Note: Cash flows fall outside the scope of quarterly results reporting under the Financial

Instruments and Exchange Act.


Total assets: Down, a consequence of

• Decreases in trades notes and accounts receivable

• Decline in fixed assets, reflecting the progress of depreciation and amortization

Shareholders’ equity: Down, owing to

• Net loss for the quarter and the payment of cash dividends

Interest-bearing debt: Down, a result of

• Decrease in the yen value of liabilities denominated in other currencies, owing to the strength of the Japanese currency

6

’11.4Q ’12.1Q

◇ Operating income (¥ bn)

-1.9 ¥bn

-22.4 ¥bn

(¥ bn)

-12.3 ¥bn

-6.3 ¥bn

’12.3 ’12.6

’12.3 ’12.6 ’12.3 ’12.6

◆Analysis of Changes in Operating Results and Financial Position

◇Shareholders’ equity

◇Total assets ◇Interest-bearing debt

3.0

4.9

Sales volume down –4.0

Differences in raw materials and fuel prices +1.0 Sales prices

down and sales mix - 1.0

Head office costs down and others +2.0

Net loss -1.6

Dividends paid -3.0

Foreign currency translation adjustments -5.1

279.8

292.0

Valuation difference on

available-for-sale securities

and others -2.6

739.7

CAPEX +8.0

Working capital down

and others -5.3

Depreciation & Amortization -11.4

Investments in securities

-13.7

762.1

Commercial paper

+2.0 254.7

261.0

Loans

-9.6

Bonds and others

+1.3


* Calculations exclude the impact of accounting period change for some Group companies

7

(¥ bn)

Sales Operating income

FY11 1Q

FY12 1Q

Difference %

Change FY11 1Q

FY12 1Q

Difference %

Change

Advanced Fibers and

Composites 35.5 26.1 -9.3 -26.3% 2.4 (0.3) -2.7 ―

Electronics Materials and

Performance Polymer Products 46.9 43.7 -3.1 -6.7% 3.2 1.6 -1.5 -49.1%

Healthcare 34.9 31.2 -3.7 -10.7% 7.2 3.8 -3.4 -47.5%

Trading and Retail 56.0 54.9 -1.1 -2.0% 1.1 0.7 -0.3 -30.9%

Total 173.3 156.0 -17.3 -10.0% 13.8 5.8 -8.0 -57.8%

Others 16.3 18.4 +2.1 +12.8% 0.3 0.4 +0.1 +36.3%

Elimination and Corporate ― ― ― ― (3.1) (3.2) -0.2 ―

Total 189.6 174.3 -15.2 -8.0% 11.0 3.0 -8.1 -73.0%

(2) Operating Results by Segment (Comparison with FY11 1Q)


8

2.4

-0.3

-5.0

-2.5

0.0

2.5

5.0

11/1Q 12/1Q

35.5

26.1

0

20

40

60

11/1Q 12/1Q

(¥ bn)

◆ Summary & Actions


(¥ bn) 11/1Q 12/1Q Difference Change

Sales 35.5 26.1 -9.3 26.3%

Operating income 2.4 (0.3) -2.7 —


-26.3%

-2.7¥bn

◇ Aramid Fibers:

Para-aramid fibers:

• Demand was solid for use in friction materials, tire reinforcement materials and fiber optic cables

• Demand for use in ballistic protection products and protective clothing entered an adjustment phase

Meta-aramid fibers:

• Exports were sluggish, a consequence of the strong yen and the economic downturn in Europe

◇ Carbon Fibers and Composites:

• Demand was favorable for use in aircraft and firm for use in compounds

• Demand for use in pressure vessels rose in North America, thanks to the expansion of shale gas development

• Demand in Asia softened for use in sports and leisure equipment and others

◇ Polyester Fibers for Industrial Applications

• Demand for automotive applications was solid

① Advanced Fibers and Composites (Formerly High-Performance Fibers, now also includes Polyester Fibers for Industrial Applications)

9

② Electronics Materials and Performance Polymer Products (Formerly Films and Plastics)




Sales 46.9 43.7 -3.1 -6.7%

Operating income 3.2 1.6 -1.5 -49.1%

3.2

1.6

0.0

2.5

5.0

11/1Q 12/1Q

-49.1%

46.9 43.7

0

20

40

60

11/1Q 12/1Q

(¥ bn)


-6.7% ◇ Resin and Plastics Processing:

Shipments for use in electrical and electronics equipment and for use in automotive components recovered favorably. To enhance profitability, we are shifting our focus toward compounds

Polycarbonate resin:

• We continued to implement sales price revisions in response to persistently high prices for key raw materials

Processed plastics products:

• Sales were favorable for automotive applications • We pressed forward with efforts to market reverse-

dispersion solvent-cast retardation film for use in OELDs • Sales of transparent electroconductive film rallied strongly

for use in touch screens

◇ Films:

PET film (Japan): Demand from electronics-related markets showed signs of a gradual recovery, although the pace of improvement was gentle

PET film (overseas): Disruptions to the supply–demand balance fueled pricing competition

10

③ Healthcare (Formerly Pharmaceuticals and Home Health Care)


* Bonalon® is the registered trademark of Merck Sharp & Dohme Corp., Whitehouse Station, NJ, U.S.A.



Sales 34.9 31.2 -3.7 -10.7%


7.2

3.8

0.0

2.5

5.0

7.5

11/1Q 12/1Q

34.9 31.2

0

20

40

60

11/1Q 12/1Q

(¥ bn)


-10.7%

-47.5%

◇ Pharmaceuticals:

Results reflected the revision of drug reimbursement prices in Japan and increasingly intense competition in the market for osteoporosis treatments

• Febuxostat (treatment for hyperuricemia and gout):

In Japan, regulatory approval for long-term prescription contributed to a favorable increase in sales; overseas, we continued to expand availability, launching the drug—already available in North America, Europe and the ROK—in Taiwan

• Bonalon®* (treatment for osteoporosis):

We released Japan’s first intravenous drip–form osteoporosis treatment (May 2012)

◇ Home Healthcare:

Fiscal 2012 started on a positive note with increased rental volume for mainstay equipment

• HOT: We marketed a new model

• CPAP: We introduced NemLink monitoring system, which uses mobile phone networks

11

④ Trading and Retail (Now also includes Polyester Fibers for Apparel)




Sales 56.0 54.9 -1.1 -2.0%


1.1

0.7

0.0

2.5

5.0

11/1Q 12/1Q

56.0 54.9

0

20

40

60

11/1Q 12/1Q

(¥ bn)


-2.0%

-30.9%

◇ Products Converting:

Textiles and apparel:

• Brisk shipments of knits, men’s suits and formal wear for spring and summer supported firm results in the Tokyo metropolitan area in the first three months of fiscal 2012, although overall sales declined, owing to dwindling sales of apparel in the Nagoya–Gifu area and of filaments and textiles

Industrial textiles and materials:

• Sales of products for automotive applications remained robust, while sales of general-purpose products, including materials for construction/civil engineering applications and nonwoven materials, were firm

◇ Polyester Fibers for Apparel:

Owing to persistently soft markets, we were forced to engage in intense pricing competition

-3

-2

-1

0

1

2

Fibers (advanced and polyester fibers) Films and plastics

◆ Quarterly operating income and loss trends * For the purpose of comparison, figures for January–March 2012 are presented as aggregates of results of domestic and

overseas consolidated subsidiaries excluding the impact of the standardization of accounting periods

In all our materials businesses, particularly plastics, income began to recover from April 2012,

in tandem with rising operating rates, thanks to actions taken in fiscal 2011 to shrink

inventories

(¥ bn)

October–Decembe

r 2011

12


January–March

2012

April–June

2012

January–

March 2012

October–

December 2011

April–June

2012

FY12 Outlook

14

• Protracted financial crisis in Europe

Shrinking national budgets, revision or postponement of public works projects

⇒ Expected to affect aramid fibers (for use in ballistic protection products and protective clothing), carbon fibers (for use in pressure vessels and wind turbine blades) and film (for use in solar cells)

• Slowing economic growth in the PRC

Falling exports to Europe, a sixth consecutive quarter of slowing economic growth

⇒ Expected to affect films and plastics, electronics materials and carbon fibers (for use in sports and leisure equipment)

With the supply–demand balance again likely to soften, pricing competition is expected

to intensify

Sources: International Monetary Fund; National Bureau of Statistics (PRC); The Japan Research Institute, Limited

(1) Assessment of the operating environment

Economic growth is expected to flag noticeably worldwide, including in the PRC and other emerging economies

1. Outlook for FY2012

Percent change

2011

(Actual)

2012 2013

(Forecast) January–March April–June Annual

(Forecast)

United States 1.7 1.9 1.8 2.1 ⇒ 2.0 2.4 ⇒ 2.3

Europe 1.5 - 0.0 - 2.1 - 0.3 0.9 ⇒ 0.7

PRC 9.2 8.1 7.6 8.2 ⇒ 8.0 8.8 ⇒ 8.5

Japan - 0.7 4.7 1.6 2.0 ⇒ 2.4 1.7 ⇒ 1.5

In July 2012, the IMF revised its economic outlook for several countries

15

(¥ bn)

Operating income

Net income

Annual Sales 2H Operating income

1H Operating income

Annual net income Sales

18.0 13.4

48.6

34.0 [35.3] 35.0

-43.0 -35.7

25.2 12.0 [13.8]

12.0

-50

-25

0

25

50

75

15.1 2.8

20.5 20.7

7.0

943.4

765.8 815.7

854.4 800.0

[791.0]

0

250

500

750

1,000

2.9

10.7

28.0

13.4 27.0

(2) Movement of Results

2. Outlook for FY12

FY08 Actual

FY09 Actual

FY10 Actual FY11 Actual FY12 Outlook

Note: Figures in square brackets in the graphs above exclude the impact of the standardization of accounting periods

16

(¥ bn) FY11

FY12

Outlook

Difference

Amount %

Net sales 854.4

[791.0] 800.0

-54.4 [+9.0]

-6.4% [+1.1%]

Operating income 34.0

[35.3] 35.0

+1.0 [-0.3]

+2.8% [-0.9%]

Operating margin 4.0%

[4.5%] 4.4% ―

+0.4% [-0.1%]

Ordinary income 34.3

[35.9] 33.0

-1.3 [-2.9]

-3.7% [-8.0%]

Net income 12.0

[13.8] 12.0

+0.0 [-1.8]

+0.2% [-13.0%]

EBITDA *1 86.3 85.0 -1.3

CAPEX *2 32.3 50.0 +17.7

Depreciation &

amortization 52.3 50.0 -2.3

R&D expenses 31.8 34.0 +2.2

FCF 18.5 15.0 -3.5

JPY per USD : 80 JPY per EUR : 97

Dubai crude oil price : US$105/barrel

2. Outlook for FY12

(3) Summary of Outlook for FY12

◆Exchange rate and Crude Oil Price Forecast for FY12

（¥ bn）

Mar. 31,

’12

Mar. 31,

’13 Difference

Assets:

Inventories 109.0 110.0 +1.0

Total 762.1 780.0 +17.9

Interest-bearing debt 261.0 250.0 -11.0

*1 EBITDA = (Operating income + Depreciation & amortization)

*2 CAPEX includes investments in intangible assets

（¥/share） FY11

FY12

Outlook Difference

Interim 3.0 3.0 ―

Year-end 3.0 3.0 ―

Annual

dividends 6.0 6.0 ―

◆ Dividends Declared for Fiscal 2011 and Forecast for Fiscal 2012

Note: Figures in square brackets in the graphs above exclude the impact of the standardization of accounting periods

17

(¥ bn)

FY11 Annual

Total

FY12 (Outlook) Annual

Total 1H 2H Subtotal Additional

period * 1H 2H

Net S

ales

Advanced Fibers and

Composites 71.9 63.9 135.8 17.4 153.2 55.0 65.0 120.0


Performance Polymer Products 93.0 87.7 180.6 34.7 215.4 90.0 95.0 185.0

Healthcare 68.0 71.5 139.5 3.5 143.0 65.0 85.0 150.0

Trading and Retail 123.1 131.9 255.0 7.7 262.7 120.0 135.0 255.0

Total 356.0 354.9 711.0 63.3 774.3 330.0 380.0 710.0

Others 37.5 42.5 80.1 0.0 80.1 40.0 50.0 90.0

Total 393.6 397.5 791.0 63.3 854.4 370.0 430.0 800.0

Op

erating

Inco

me

Advanced Fibers and

Composites 5.5 1.1 6.6 0.6 7.2 0.5 2.5 3.0


Performance Polymer Products 5.7 (0.8) 4.9 (1.2) 3.7 2.0 6.0 8.0

Healthcare 11.9 14.5 26.4 (0.5) 25.9 9.0 19.0 28.0

Trading and Retail 2.8 3.8 6.6 (0.0) 6.6 2.0 5.0 7.0

Total 25.9 18.6 44.5 (1.1) 43.4 13.5 32.5 46.0

Others 1.3 2.4 3.7 0.0 3.7 1.5 3.0 4.5

Elimination and Corporate (6.6) (6.3) (13.0) (0.2) (13.1) (8.0) (7.5) (15.5)

Total 20.7 14.6 35.3 (1.3) 34.0 7.0 28.0 35.0

(4) Changes in Net Sales and Operating Income for FY11-FY12

* The impact of the standardization of accounting periods

2. Outlook for FY12

Note: Figures for FY2011, the fiscal year ended March 31, 2012, have been restated to conform with the Company‘s revised segmentation. Revised figures are unaudited.

18

(¥ bn)

FY12 Previous Outllook* FY12 Revised Outlook Difference

1H 2H Total 1H 2H Total

Net S

ales

Advanced Fibers and

Composites 70.0 75.0 145.0 55.0 65.0 120.0 -25.0


Performance Polymer Products 95.0 100.0 195.0 90.0 95.0 185.0 -10.0

Healthcare 70.0 80.0 150.0 65.0 85.0 150.0 ―

Trading and Retail 125.0 135.0 260.0 120.0 135.0 255.0 -5.0

Total 360.0 390.0 750.0 330.0 380.0 710.0 -40.0

Others 40.0 50.0 90.0 40.0 50.0 90.0 ―

Total 400.0 440.0 840.0 370.0 430.0 800.0 -40.0

Op

erating

Inco

me

Advanced Fibers and

Composites 5.0 6.0 11.0 0.5 2.5 3.0 -8.0


Performance Polymer Products 3.0 5.0 8.0 2.0 6.0 8.0 ―

Healthcare 12.0 16.0 28.0 9.0 19.0 28.0 ―

Trading and Retail 2.5 4.5 7.0 2.0 5.0 7.0 ―

Total 22.5 31.5 54.0 13.5 32.5 46.0 -8.0

Others 1.5 3.0 4.5 1.5 3.0 4.5 ―

Elimination and Corporate (8.0) (7.5) (15.5) (8.0) (7.5) (15.5) ―

Total 16.0 27.0 43.0 7.0 28.0 35.0 -8.0

*Announced on May 9,2012

2. Outlook for FY12

◆ Outlook by Segment

19

2. Outlook for FY12

◆ Comparison with FY11

◆ Comparison with Previous Forecast

35.3 +11.0 +8.0

+9.0 -15.0

-13.3 35.0

35.0

43.0 +5.0 +2.0 -8.0

-7.0

* Calculations exclude the impact of accounting period change for some Group companies

(5) Analysis of Changes in Operating Income Forecast

FY12 (Forecast)

FY11

(¥ bn)

Sales volume increases

Sales volume decrease

Cost reductions

Cost reductions

Decrease in raw materials costs

Decrease in raw materials costs

Changes in sales prices and

product mix

Changes in sales prices and

product mix

Advance development costs, others

Includes ¥4.0 billion attributable to reduction

of procurement costs

Includes ¥2.0 billion attributable to reduction

of procurement costs

Previous forecast Current forecast

(6) Factors contributing to anticipated improvement in operating income in the fiscal 2012 second half, compared with the first half

20

Despite slowing macroeconomic growth, we still expect results to begin improving gradually toward the end of the second half of fiscal 2012

Measures implemented in each segment are also projected to contribute to further improvements in the second half

FY 1H

FY 2H Increase Principal contributing factors

Advanced Fibers and

Composites 0.5 2.5 2.0

Expanded

sales For automotive applications and to emerging economies for use in fiber optic cables

Reduced

costs

Completion of major regular maintenance of aramid fibers production facilities in the

first half, full restoration of production at flood-damaged facilities in Thailand, making use of recycled pulp (aramid fibers)

Electronics Materials

and Performance

Polymer Products

2.0 6.0 4.0

Expanded

sales

Films: For use in reflective film for LED-backlit LCD televisions and highly durable

solar cell back sheets

Plastics: Owing to accelerated shift of focus to compounds, efforts to bolster sales of

processed plastics products (electroconductive film, reverse-dispersion solvent-cast retardation film)

Reduced

costs

Completion of major regular maintenance of resin production facilities in the first half,

improvement in cost per unit of production

Healthcare 9.0 19.0 10.0

Expanded

sales Febuxostat (Japan and overseas), new formulations of Bonalon, CPAP ventilators

Reduced

costs

Costs for materials used in home healthcare equipment, sales and administrative

costs

Trading and Retail 2.0 5.0 3.0 Seasonal factors, cost reductions (streamlining of organization, others)

Others 1.5 3.0 1.5 Seasonal factors influencing performance of the IT business


(¥ bn)

We will take steps to cut costs related to technological development, production, procurement and logistics, as well as SG&A expenses—guided by the newly established Group Cost Structure Reform Promotion Subcommittee—and

implement crucial Group structural reforms, with the aim of reducing costs Groupwide.

Business Current operating environment Medium- to long-term trends

Advanced Fibers and Composites

• The European sovereign debt crisis has provoked stagnation and slowing growth at the macroeconomic level

• Needs remains strong for materials that reduce the weight of finished products, thus helping to lower energy consumption, and for materials that contribute to greater safety and security, underscoring projections that growth will remain high

High-performance fibers (aramid fibers, others)

• Owing to fiscal austerity in Europe and the United States, demand for certain applications, including ballistic protection products and protective clothing, has entered an adjustment phase

• Demand is forecast to increase substantially in emerging economies (for use in fiber optic cables, ballistic protection products and protective clothing, as well as for infrastructure-related applications)

• Growth in demand for automotive applications is expected to remain stable

• Efforts to develop new products and expand applications will proceed (e.g., offshore oilfield related applications, ultrahigh-molecular-weight polyethylene products)

Carbon fibers and composites

• Competition is intensifying, owing to a steady stream of new market entrants

• Stable growth in demand and high profitability is forecast to continue for use in aircraft

• The adoption of CFRP by automakers is expected to accelerate

• Demand looks set to strengthen for general industrial applications, including wind turbine blades and pressure vessels for natural gas–related applications

Healthcare • The aging of society and the increasing prevalence of lifestyle-related diseases are likely to remain key factors

Pharmaceuticals • Competition in the market for osteoporosis treatments is intensifying

• Febuxostat has been approved for long-term prescription (Japan)

• New formulations of Bonalon are expected to help maintain and eventually expand market share

• Sales of febuxostat are forecast to increase favorably both in Japan and overseas

Home healthcare • Guidelines for diagnosing SAS in cardiovascular disease have been revised (Japan)

⇒ CPAP equipment is increasingly prescribed by cardiovascular specialists

• Growth in the market for CPAP devices is projected to remain high (bolstered by launch of models with new functions and increase in the number of sleep labs)

21

We continue to see these and other promising growth businesses as key income drivers over the medium to long term


(7) Analysis of the operating environment and outlook for performance in key businesses Fiscal 2012 is the first year of CHANGE for 2016. Guided by this, we are implementing basic strategies for transforming our four fundamental portfolios

22

FY08

Actual

FY09

Actual

FY10

Actual

FY11

Actual

FY12

Outlook

ROA *1 1.9% 1.6% 6.1% 4.5% 5%

ROE *2 -12.3% -12.4% 9.1% 4.2% 4%

Operating margin 1.9% 1.8% 6.0% 4.0% 4.4%

D/E ratio 1.18 1.18 0.94 0.89 0.9

Shareholders’ equity ratio 35.0% 33.0% 37.3% 38.3% 37%

Earnings per share (¥) (43.7) (36.3) 25.6 12.2 12.2

Dividends per share (¥) 5.0 2.0 5.0 6.0 6.0

Total assets（¥ bn） 874.2 823.1 761.5 762.1 780.0

Interest-bearing debt （¥ bn） 361.3 320.3 267.4 261.0 250.0

EBITDA（¥ bn）*3 85.3 75.3 105.0 86.3 85.0

*1 ROA= Operating income/Total assets

*2 ROE= Net income/Shareholders’ equity

*3 EBITDA = Operating income + Depreciation & amortization

(7) Financial Highlights

2. Outlook for FY12

23 All product names in this document are registered trademarks.

Disclaimer

Any statements in this document, other than those of historical fact, are forward-looking statements about the future

performance of Teijin and its Group companies, which are based on management’s assumptions and beliefs in light of

information currently available, and involve risks and uncertainties. Actual results may differ materially from these forecasts.

Business Risks

The Teijin Group recognizes certain risks as having the potential to affect its operating results and/or financial position. As of the

date of this document, these risks included, but were not limited to, the risks listed below.

(1) Market-related risk

The Teijin Group manufactures and sells products, the sales of which may be affected by market conditions, competition with other companies and price fluctuations arising thereof, as well as fluctuations in raw materials prices and fuel costs, and such market factors as fluctuations in foreign exchange and interest rates.

(2) Product quality risk

Teijin’s pharmaceuticals and home health care businesses manufacture and sell products that may affect the lives of users. Accordingly, quality issues relating to such products have the potential to negatively affect, among others, the Group’s operating results, financial position and public reputation.

(3) R&D-related risk in the pharmaceuticals business

R&D in the pharmaceuticals business is characterized by significant investments of funds and time. Pharmaceuticals discovery research has a high incidence of failure to discover promising drugs. There are also risks that plans to apply for regulatory approval may be abandoned or that approval may be rescinded.

(4) Risks related to overseas operations

The Teijin Group has operations overseas. These operations are vulnerable to the impact of fluctuations in foreign exchange rates, as well as enforcement of new or unexpected changes to existing laws, regulations or tax systems that exert an adverse impact on the Group; economic fluctuations; or social unrest triggered by acts of terror or war.

(5) Risks related to accidents and disasters

In the event of a major natural disaster or unforeseen accident that results in damage to the Teijin Group’s production facilities or significantly impedes the Group’s supply chain, such developments may have a negative impact on the Group’s operating results and/or financial position.

Disclaimer Regarding Forward-Looking Statements and Business Risks

This material is based on the consolidated results for FY12 1Q announced at 11:30 A.M. on August 2, 2012 (local time in Japan).

24

Consolidated Balance Sheets

Mar. 31, ’11

Jun. 30, ’11

Sep. 30, ’11

Dec. 31, ’11

Mar. 31, ’12

Jun. 30, ’12 (¥ bn)

Total assets 761.5 782.0 784.5 775.8 762.1 739.7

Current assets 336.9 358.3 369.4 375.6 361.8 352.1

Fixed assets 424.6 423.8 415.1 400.2 400.3 387.7

Total liabilities and net assets 761.5 782.0 784.5 775.8 762.1 739.7

Liabilities 453.8 468.3 474.2 469.7 449.9 440.2

（Interest-bearing debt） 267.4 284.6 288.0 285.0 261.0 254.7

Net assets 307.7 313.8 310.3 306.0 312.2 299.5

（Supplementary Information）

Note: For more information, see Teijin’s quarterly results report (Consolidated Financial Results for the First Quarter of FY12).

25

FY11 FY12 FY11 1Q vs

FY12 1Q （¥ bn） 1Q 2Q 3Q 4Q 1Q

Net Sales 189.6 204.0 201.9 258.9 174.3 -15.2

Cost of sales 133.9 147.9 147.8 199.6 127.5 -6.4

Gross profit 55.7 56.1 54.1 59.3 46.8 -8.9

SG & A 44.7 46.5 44.4 55.7 43.9 -0.8

Operating income 11.0 9.6 9.7 3.7 3.0 -8.1

Nonoperating items (net) 1.8 (0.8) 0.2 (0.9) (0.8) -2.5

(Balance of financial expenses) (0.4) (0.9) (0.7) (1.5) (0.3) +0.1 (Equity on gains and losses of

unconsolidated subsidiaries and affiliates) 2.6 1.3 0.8 0.6 0.4 -2.2

Ordinary income 12.8 8.9 9.9 2.7 2.2 -10.6

Extraordinary items(net) (0.1) (1.9) (1.8) (2.7) (2.5) -2.4

Income (loss) before income taxes 12.7 7.0 8.1 0.0 (0.3) -13.0

Income taxes 5.9 3.5 2.2 3.2 1.6 -4.3

Minority interests (net) 0.5 0.6 (0.0) (0.0) (0.2) -0.7

Net income (loss) 6.3 2.9 5.9 (3.1) (1.6) -7.9

Consolidated Statements of Income


Note: For more information, see Teijin’s quarterly results report (Consolidated Financial Results for the First Quarter of FY12).

26

(¥ bn) FY11

FY12 1Q

Interest income 0.6 0.1

Dividend income 0.7 0.4

Equity in earnings of affiliates 5.3 0.4

Foreign exchange gain 0.2 ―

Other income 1.1 0.4

Nonoperating revenues, total 8.0 1.3

Interest expense 4.9 0.9

Foreign exchange loss ― 0.8

Other expenses 2.8 0.5

Nonoperating expenses, total 7.7 2.1

Nonoperating items, total 0.2 (0.8)

◆ Nonoperating items ◆ Extraordinary items


(¥ bn) FY11

FY12 1Q

Gain on sales of property, plant and

equipment 0.3 0.1

Gain on sales of investment securities 1.3 ―

Gain on sales of subsidiaries and

affiliates' stocks 0.7 ―

Net gain related to flooding 0.3 ―

Others 0.3 0.0

Extraordinary income, total 2.9 0.1 Loss on sales and retirement of

noncurrent assets 1.0 0.2

Loss on valuation of investment

securities 0.2 0.8

Loss on impairment 2.6 0.7

Earthquake-related expenses 0.3 ―

Flood-related expenses ― 0.9

Loss on revision of retirement benefit plan 3.3 ―

Others 2.0 0.0

Extraordinary losses, total 9.4 2.6

Extraordinary items, total (6.5) (2.5)

27

(¥ bn)

FY11 FY12 (Outlook)

1Q 2Q 3Q 4Q Annual

Total 1Q 2Q 2H

Annual

Total

Net sales 189.6 204.0 201.9 258.9 854.4 174.3 195.7 430.0 800.0

Operating income 11.0 9.6 9.7 3.7 34.0 3.0 4.0 28.0 35.0

Ordinary income 12.8 8.9 9.9 2.7 34.3 2.2 3.8 27.0 33.0

Net income (loss) 6.3 2.9 5.9 (3.1) 12.0 (1.6) 1.6 12.0 12.0

EBITDA * 22.5 21.4 21.4 21.1 86.3 14.3 85.0

Depreciation &

amortization 11.4 11.7 11.7 17.5 52.3 11.4 50.0

R&D expenses 7.2 8.0 7.4 9.3 31.8 7.6 34.0

FCF (13.2) (3.4) 1.2 34.0 18.5 4.9 15.0

*EBITDA = Operating income + Depreciation & amortization


◆ Outlook for FY12

28

Dubai Crude Oil Prices Benzene Prices

【Source: Teijin estimates based on data published by Platt’s】【Source: Teijin estimates based on data published by Dewitt】


0

20

40

60

80

100

120

140

($/BL) ’09 ’10 ’11 ’12

0

50

100

150

200

250

300

350

400

450

500

(Cent/gal) ’09 ’10 ’11 ’12

Dubai Crude oil

prices Benzene

1

1.1

1.2

1.3

1.4

1.5

1.6

1.7’08 ’09 ’10 ’11 ’12

50

60

70

80

90

100

110

120

130

140

150

160

170’08 ’09 ’10 ’11 ’12

29

($/EUR) (¥/$) (¥/EUR)

Yen/Dollar, Yen/Euro Exchange Rates Dollar/Euro Exchange Rates

Jul. 2008

¥107/ $1.00

Jul. 2008

¥168/ €1.00

¥/$ 3-month average

¥/€ 3-month average

¥/€ Month-end

TTM

¥/$ Month-end

TTM Jun. 2012

¥79/ $1.00

Jun. 2012

¥99/ €1.00

Jul. 2008

$1.56/ €1.00

$/€ Month-end

TTM

$/€ 3-month average

Jun. 2012

$1.24/ €1.00


0

100

200

300

400

500

(Cent/kg)

SF 1.5D

SPREAD EG

PTA

’09 ’10 ’11 ’12

Cotton Price

0

50

100

150

200

250

POY 150D

PTA

’09 ’10 ’11 ’12

30

(Cent/kg)

Polyester Fibers Prices, Raw Materials Prices

Filament yarn Staple Fibers

【Source: Teijin estimates based on data published by PCI】


SPREAD EG

31

(¥ bn)

Product Target disease

FY11 FY12

1Q 2Q 3Q 4Q Annual

Total 1Q

Bonalon®* Osteoporosis 5.2 5.2 5.4 4.7 20.5 3.3

Onealfa® Osteoporosis 2.7 2.7 3.0 2.7 11.1 1.8

Osteoporosis total 7.9 7.9 8.4 7.4 31.6 5.1

Mucosolvan® Expectorant 2.4 2.1 3.0 2.4 9.9 2.1

Venilon® Severe infection 2.3 2.2 2.6 2.3 9.4 2.4

Laxoberon® Laxative 1.0 1.0 1.1 1.0 4.2 1.0

Synvisc DispoTM Osteoarthritis pain in the knee 0.4 0.4 0.5 0.3 1.7 0.4

Tricor® Hyperlipidemia 0.3 0.4 0.6 0.2 1.5 0.4

Bonalfa® Psoriasis 0.3 0.3 0.4 0.3 1.4 0.4

Alvesco® Asthma 0.3 0.3 0.3 0.4 1.3 0.3

Spiropent® Bronchodilator 0.2 0.2 0.3 0.2 1.0 0.2

Feburic® Hyperuricemia and gout 0.5 0.0 0.1 0.3 0.9 0.7

* Bonalon® is the registered trademark of Merck Sharp & Dohme Corp., Whitehouse Station, NJ, U.S.A. Note: Drugs shown are those with annual sales in excess of ¥1.0 billion

Sales of Principal Pharmaceuticals


32

Phase of Clinical Trials

Phase I Phase II Phase III Filed Approved/New

Launch

Bone and joint

disease ITM-058 *2 GTH-42J

[Bonalon® ]

GTH-42V *1

[Bonalon® ]

Respiratory

disease NA872ET

[Mucosolvan®]

Cardio-vascular

and metabolic

disease

ITM-077

NTC-801 ITM-014 *3

[Somatuline® ]

Other

GGS [Venilon® ]

(New indication for

microscopic

polyangiitis)

TV-02H

[Bonalfa® Ointment]

(PRC)

◆ Development Status by Therapeutic Area (As of June 30, 2012)

*1 GTH-42V was approved for manufacture and marketing in Japan in January 2012 and Commenced sales in Japan in May 2012.

*2 Phase II clinical trials for ITM-058 began in May 2012.

*3 ITM-014 was approved for manufacture and marketing in Japan in June 2012.

Notes: Bonalon® is the registered trademark of Merck Sharp & Dohme Corp., Whitehouse Station, NJ, USA.

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


33

◆ Status of New Products

Brand name (Generic name) Target disease Medical properties/characteristics Dosage

form Remarks

Bonalon® Bag for I.V. Infusion

900 µg

(alendronate sodium hydrate)

Osteoporosis Intravenous form of Bonalon, currently sold as an osteoporosis drug; holds promise as an alternative prescription in cases where patients are unable to take oral medications or where patient noncompliance is an issue; also promising because less likely than oral drugs to cause side effects in the upper gastrointestinal tract.

Injection Licensed in from Merck & Co., Inc. (USA)

Commenced sales in Japan on May 10, 2012


(As of June 30, 2012)

◆ Approved

Brand name (Generic name) Target disease Medical properties/characteristics Dosage

form Remarks

Somatuline® Subcutaneous

Injection

(lanreotide acetate)

Acromegaly

Pituitary Gigantism

Suppresses the excessive secretion of growth hormones associated with acromegaly; pharmaceutical formulation facilitates sustained release and extended pharmaceutical action, while prefilled syringe format makes it more convenient than existing acromegaly drugs and thus more conducive to patient compliance.

Injection Licensed in from Ipsen Pharma SAS (France)

Received approval in June, 2012

Notes: Bonalon® is the registered trademark of Merck Sharp & Dohme Corp., Whitehouse Station, NJ, USA.

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

(As of June 30, 2012)

34

◆ Newly Developed Pharmaceutical Candidates

【 Filed 】


(As of June 30, 2012)

Code No. (Generic

name)

Target disease Medical properties/characteristics Dosage

form

Remarks

TV-02H

(tacalcitol monohydrate)

Psoriasis vulgaris Licensing-out of Bonalfa high ointment 20µg/g to China; This product will offer an additional treatment option for psoriasis in China. Although two strengths (2µg/g and 20µg/g) of Bonalfa ointment are available in Japan, only Bonalfa ointment 2µg/g is available in China at present.

Topical ointment

Filed with PRC’s State Food and Drug Administration in September 2010

(Supplemental NDA to Bonalfa ointment 2µg/g )

GTH-42J

(alendronate sodium hydrate)

Osteoporosis Oral jelly formulation of Bonalon (alendronate sodium hydrate), currently sold as an osteoporosis drug; intended as the world’s first jelly-form osteoporosis treatment; offers promise as an alternative for osteoporosis patients who dislike taking pills because it is easy to swallow and moderately firm, so holds shape; also promising because it is easily managed by elderly individuals.

Oral jelly Licensed in from Merck & Co., Inc. (USA)

Filed in Japan in August 2011.

35

【Phase II】

Code No. (Generic name) Target disease Medical properties/characteristics Dosage

form

Remarks

ITM-077

(taspoglutide)

Type II diabetes Consists glycemic control with low risk of hypoglycemia, which stimulating glucose-dependent insulin secretion; Has body weight loss effect; once-weekly dosage is possible, enhancing convenience; Also expecting it protects and promotes regeneration of pancreatic beta cells, which secrete insulin.


NTC-801 Atrial fibrillation and flutter

Promising atrial selective anti-arrhythmic drug for the treatment and prevention of atrial fibrillation and flutter; expecting that it does not cause ventricular side effects, such as arrhythmogenic or negative inotropic action, a problem with existing anti-arrhythmic drugs.

Oral Developing jointly with Nissan Chemical Industries, Ltd.

GGS (freeze-dried sulfonated human immunoglobulin)

Microscopic polyangiitis

Drug’s anti-inflammatory and immunoregulatory actions mitigate autoimmune vasculitis; also promising as a treatment for mononeuritis multiplex, a neuropathic disorder that is not alleviated by standard therapies.

Injection Developing jointly with Kaketsuken (New indication)

ITM-058 Osteoporosis Promising for the treatment of osteoporosis due to potency in promoting bone formation, resulting in a rapid increase in bone density and reduction in the risk of fracture. Superior to existing PTH derived drugs in its ability to increase bone density and its safety (minimal risk of hypercalcemia).



36

Code No. (Generic name) Target disease Medical properties/characteristics Dosage

form

Remarks

NA872ET

(ambroxol hydrochloride)

Expectorant Small, sustained-release tablet-form version of Mucosolvan (ambroxol hydrochloride) that is smaller than Mucosolvan L Capsule and thus easier to take. This version is promising because it allows easier apportioning of single doses

Oral Licensed in from Boehringher Ingelheim GmbH (Gernany)

【Phase I】


37

37.6

33.4 31.5 31.8

34.0

0

20

40

'08 '09 '10 '11 '12

75.8

36.3

29.2 32.3

50.0

67.4 61.9

56.4 52.3

50.0

0

20

40

60

80

100

'08 '09 '10 '11 '12

Depreciation &

Amortization

CAPEX

(¥ bn)

CAPEX/Depreciation &

Amortization R&D Expenses

CAPEX, Depreciation & Amortization, and R&D Expenses


(¥ bn)

Outlook Outlook

140120120801088831

Technology

q 1q1q

q note

q results2

extraordinary income

income net income fcf

q resultsanalysis of

income loss0

bn sales