INVESTORS

Review of Operations: Specialty Group


Forward-Looking Statements: Annual reports contain estimates, projections, and other forward-looking statements, which are subject to unforeseeable risks and uncertainties. Readers should understand that Tosoh’s business and financial results could differ significantly from management’s estimates and projections.

For reference purposes only, US dollar amounts have been translated, unless otherwise indicated, from yen at the rate of ¥112.68 = US$1, the prevailing exchange rate at the end of the fiscal year under review.

Tosoh Corporation’s 2016 fiscal year covers the period from April 1, 2015, to March 31, 2016.

 

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Snapshot

The Specialty Group meets the needs of its varied customers for high-value-added bioscience, organic chemicals, and advanced material products and technologies. Its extensive offerings are solidly positioned in stable and expanding niche markets and drive Tosoh’s profitability.

The Specialty Group’s clients span the globe and include companies in the pharmaceutical, health care, semiconductor, consumer electronics, and automobile industries. Among them are emerging businesses whose successes hinge on the Specialty Group’s development of solutions to fuel their progress. Innovative products and technologies from the Specialty Group align Tosoh with market opportunities and offer potential for sustainable expansion strategies.

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Group Performance and Markets

Tosoh fiscal 2016 Specialty figures


Results Overview

In fiscal 2016, Specialty Group net sales decreased 0.2% from a year earlier, to ¥174.5 billion (US$1.5 billion). That constituted 23.2% of Tosoh’s consolidated net sales, up from 21.6% in fiscal 2015. Group operating income climbed 9.1%, to ¥32.7 billion (US$290.2 million), and accounted for 47.1% of Tosoh’s consolidated operating income, compared with 58.3% a year earlier. The group’s operating margin was 18.7%, an increase from 17.1% in fiscal 2015.

Shipments of ethyleneamines by the Specialty Group decreased in fiscal 2016 as Tosoh’s competitors expanded their ethyleneamine production capacity, exacerbating an imbalance in favor of supply over demand. Overseas, the group also faced increased prices for its ethyleneamine products because of a weak yen.

Among the group’s separation-related products, shipments of liquid chromatography packing materials rose. The group’s diagnostic-related products experienced a similar increase in shipments of in vitro diagnostic reagents. Its shipments of high-silica zeolites (HSZ) likewise increased, thanks to a boost in production capacity in fall 2014, as did its shipments of zirconia for dental applications.

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Developments

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Strategies and Outlook

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Medium-term Business Plan