Toyo Ink SC : Consolidated Quarterly Financial Results (Japanese Accounting Standards)for the First Three Quarters of the Fiscal Year Ending December 31, 2022

(Percentages indicate year-on-yearchanges)

TRANSLATION:

This is an English translation of Consolidated Quarterly Financial Results (Japanese Accounting Standards) for the First Three Quarters of the Fiscal Year Ending December 31, 2022. This is an English translation of the Japanese original, prepared only for the convenience of shareholders residing outside Japan. The original Japanese version will prevail should there be any difference in the meaning between the English version and the Japanese version.

Consolidated Quarterly Financial Results (Japanese Accounting Standards) for the First Three Quarters of the Fiscal Year Ending December 31, 2022

Name of Listed Company: TOYO INK SC HOLDINGS CO., LTD.	November 11, 2022
Listings: Tokyo Stock Exchange
Code:	4634	URL: https://schd.toyoinkgroup.com
Representative:	Satoru Takashima, President and Representative Director, Group CEO
Contact:	Takeshi Arimura, Operating Officer and General Manager of Finance & Accounting Department
	Tel: [phone]

Scheduled date of submission of quarterly report:	November 11, 2022
Scheduled date of commencement of dividend payments:	-
Supplementary documents for quarterly results:	Yes
Quarterly results briefing:	None
	(Amounts of less than million yen are omitted.)

1. Consolidated business results for the first three quarters of fiscal 2022 ending December 31, 2022 (From January 1, 2022 to September 30, 2022)

(1) Business results (cumulative totals)

	Net sales			Operating profit		Ordinary profit	Profit attributable to
				owners of parent
	Million yen		%		Million yen	%		Million yen		%	Million yen	%
First three quarters, fiscal 2022	235,006		11.4		5,309	-45.5		7,235		-35.2	8,758	25.4
First three quarters, fiscal 2021	210,965		12.6		9,746	15.5		11,159		49.5	6,985	65.7
(Note) Comprehensive income:	First three quarters, fiscal 2022: 20,430 million yen (38.1%)
	First three quarters, fiscal 2021: 14,790 million yen (-%)
	Profit per share (Basic)		Profit per share (Diluted)
					Yen				Yen
First three quarters, fiscal 2022			160.09				159.90
First three quarters, fiscal 2021			124.47				124.26

• The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) and other standards were adopted at the beginning of the first quarter of the fiscal year and have been applied to the results of the third quarter of the fiscal year ending December 31, 2022, but they have not been taken into account when evaluating year-on-year change due to the negligible impact of these standards.

(2) Financial position

		Total assets		Net assets		Net worth/Total assets
			Million yen		Million yen		%
First three quarters, fiscal 2022		412,021		236,607		55.1
Fiscal 2021			406,896		226,947		53.7
(Note) Net worth:	First three quarters, fiscal 2022: 227,145 million yen	Fiscal 2021: 218,449 million yen

• From the beginning of the first quarter of the fiscal year ending December 31, 2022, the Company began adopting the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29. March 31, 2020), etc. The figures for the third quarter of the fiscal year ending December 31, 2022 are the figures after the application of the relevant accounting standards.

2. Dividends

						Dividends per share
			End of Q1	End of Q2		End of Q3	Year-end	Annual
			Yen	Yen		Yen	Yen	Yen
	Fiscal 2021		-	45.00		-	45.00		90.00
	Fiscal 2022		-	45.00		-
	Fiscal 2022 (Forecast)						45.00		90.00

(Note) Revision to dividend forecasts published most recently: None

3. Forecasts for the year ending December 31, 2022 (From January 1, 2022 to December 31, 2022)

							(Figures in percentages denote the year-on-yearchange.)
	Net sales		Operating profit	Ordinary profit		Profit attributable to	Profit per share
			owners of parent
	Million yen		%	Million yen	%	Million yen	%		Million yen	%	Yen
Full-year	315,000		9.4	7,000	-46.2	8,500	-45.0		9,000	-5.2	165.82
(Note) Revision to consolidated business performance forecasts published most recently: Yes

• The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) and other standards were adopted at the beginning of the first quarter of the fiscal year and have been applied to the forecasts for consolidated results for the fiscal year ending December 31, 2022, but they have not been taken into account when evaluating year-on-year change due to the negligible impact of these standards.

* Notes
(1) Important changes of subsidiaries during the term
(changes in specific subsidiaries accompanied by a change in the scope of consolidation):	No

1. Application of special accounting treatment to the preparation of quarterly consolidated financial statements: No
2. Changes in accounting policies and changes or restatement of accounting estimates

(i)	Changes in accounting policies due to the modification in accounting methods:	Yes
(ii)	Changes in accounting policies other than (i):	No
(iii)	Changes in accounting estimates:	No
(iv)	Restatement:	No

1. Numbers of shares issued (ordinary shares)
2. 1. Numbers of shares issued at the end of the terms (including treasury shares):

First three quarters of fiscal 2022:	58,286,544 shares
Fiscal 2021:	60,621,744 shares

1. Numbers of treasury shares at the end of the terms:

First three quarters of fiscal 2022:	5,303,053 shares
Fiscal 2021:	4,775,558 shares

1. Average numbers of shares issued during the terms (consolidated accumulation periods):

First three quarters of fiscal 2022:	54,707,680 shares
First three quarters of fiscal 2021:	56,116,835 shares

• These quarterly financial results are not subject to quarterly audits by certified public accountants or audit corporations.
• Explanations about the proper use of financial forecasts and other important note

1. The above forecasts are based on the information available on the date these materials are released and incorporate assumptions about uncertainties that may affect future earnings. The forecasts do not constitute an assurance that the Company promises to achieve the earnings. Actual earnings could differ materially from these forecasts due to various factors in the future. For notes about assumptions of earnings forecasts and the use of earnings forecasts, refer to "(3) Information on the consolidated earnings forecasts and other future forecasts" of "1. Qualitative Information on Financial Results, etc., for the First Three Quarters Ended September 30, 2022" on page 4 of the accompanying materials.
2. Supplementary documents for financial results will be posted on the Company's website on November 11, 2022 (Friday).

TOYO INK SC HOLDINGS CO., LTD. (4634) Financial Results for the First Three Quarters of FY2022

Accompanying Materials - Contents
1. Qualitative Information on Financial Results, etc., for the First Three Quarters Ended September 30, 2022	..... 2
(1)	Details of operating results ........................................................................................................................	2
(2)	Details of financial position.......................................................................................................................	4
(3)	Information on the consolidated earnings forecasts and other future forecasts .........................................	4
2. Consolidated Financial Statements and Primary Notes .......................................................................................	5
(1)	Consolidated balance sheet........................................................................................................................	5
(2)	Consolidated statements of income and consolidated statements of comprehensive income....................	7
(3)	Notes to consolidated quarterly financial statements.................................................................................	9
	(Notes on assumption of going business) ..................................................................................................	9
	(Notes on significant changes in the amount of shareholders' equity) ......................................................	9
	(Changes in accounting policies)...............................................................................................................	9
	(Additional information)..........................................................................................................................	10
	(Segment information, etc.) .....................................................................................................................	11

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TOYO INK SC HOLDINGS CO., LTD. (4634) Financial Results for the First Three Quarters of FY2022

1. Qualitative Information on Financial Results, etc., for the First Three Quarters Ended September 30, 2022

(1) Details of operating results

During the first three quarters of the fiscal year under review, the global economy was affected by sharp rises in the prices of raw materials and energy and supply constraints chiefly due to the prolonged state of affairs in Ukraine and restrictions on economic activities in China. In addition, there were downside risks due to worldwide monetary tightening and violent exchange rate fluctuations. Meanwhile, the COVID-19 pandemic was entering a new phase where people live with COVID-19, and there were signs of recovery in the global economy. In the display industry, one of the main markets of the Toyo Ink Group, inventory adjustments progressed rapidly, which had significant adverse effects on corporate activities.

In this environment, the Toyo Ink Group worked to achieve its policies for the year of enhancing the profitability of its businesses, creating and expanding priority development areas, and enhancing the value of management resources for sustainable growth.

As a result, net sales in the first three quarters of the fiscal year under review increased to 235,006 million yen (up 11.4% year on year), operating profit decreased to 5,309 million yen (down 45.5% year on year), and ordinary profit fell to 7,235 million yen (down 35.2% year on year). Profit attributable to owners of parent rose to 8,758 million yen (up 25.4% year on year).

Due to the application of the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc., net sales were 678 million yen less, and operating profit and ordinary profit were 96 million yen and 66 million yen less each, compared with values calculated by applying the previous method.

Results by segment are as follows.

(i) Colorants and Functional Materials Related Business

Shipments of LCD color filter materials were sluggish in the latter half of the first three quarters under review as production of large and small and medium-sized liquid crystal panels was reduced sharply due to a decline in demand for liquid crystal panels for large television sets and smartphones.

Sales of plastic colorants, particularly those for foods containers, remained strong; however, growth in sales of plastic colorants for automobiles and office equipment slowed due to the impact of shortages of semiconductors and other components and lockdowns in China.

Sales of inkjet inks, particularly those for commercial printing and signage, were firm. The Group made progress in the improvement of production facilities for lithium-ion battery materials for automotive applications in the U.S. and Europe, and supply of lithium-ion battery materials expanded as demand increased.

As a result, net sales for this segment as a whole increased to 59,025 million yen (up 6.3% year on year) while operating profit decreased to 1,357 million yen (down 66.4% year on year) due to a steep rise in raw materials and energy costs.

With the application of the Accounting Standard for Revenue Recognition, etc., net sales decreased 399 million yen and operating profit decreased 15 million yen.

(ii) Polymers and Coatings Related Business

Among functional films and tapes, sales of conductive adhesive sheets and electromagnetic shielding films were affected by a market slump of smartphones in the latter half of the first three quarters under review. Sales of heat durable and low adhesive films for liquid crystal panels and automobiles were slow due to sharp production adjustments in the market.

Domestic sales of adhesives for the packaging of snack foods and pet foods remained strong. Meanwhile, domestic sales of pressure sensitive adhesives for labels and displays were affected by sluggish demand. Overseas sales of pressure sensitive adhesives grew thanks to facility extensions in the US and India and sales of adhesives for food products and pharmaceuticals also increased.

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TOYO INK SC HOLDINGS CO., LTD. (4634) Financial Results for the First Three Quarters of FY2022

Domestic sales of new can coatings with added functionality increased, but overall domestic sales saw sluggish growth. Overseas sales of can coatings for alcohol and other beverage cans grew.

As a result, net sales for this segment as a whole increased to 56,756 million yen (up 9.8% year on year) while operating profit decreased to 1,794 million yen (down 33.2% year on year) due to the lag of selling price revisions and cost reductions behind continuing steep rises in raw materials and energy costs.

With the application of the Accounting Standard for Revenue Recognition, etc., net sales decreased 195 million yen and operating profit decreased 46 million yen.

(iii) Packaging Materials Related Business

In Japan, sales of liquid inks, particularly mainstay products for packaging materials, remained strong thanks to firm demand for liquid inks for food products such as frozen foods, labels for beverages, and noodles, based on the continued movement of customers toward increasing inventory in preparation for the disruption of the supply of materials and price increases. Overseas, sales in China were adversely affected by lockdowns. However, sales were firm in other regions, reflecting a recovery in economic activity and progress in expansion of sales.

In the gravure cylinder platemaking business, demand for new plates in the packaging segment was low. Sales of precision platemaking related to electronics saw sluggish growth.

As a result, net sales for this segment as a whole increased to 62,148 million yen (up 16.0% year on year) while operating profit decreased to 640 million yen (down 56.6% year on year) due to difficulty in the procurement of raw materials, a steep rise in their prices, and an increase in energy prices on a global scale.

With the application of the Accounting Standard for Revenue Recognition, etc., net sales decreased 49 million yen and operating profit decreased 20 million yen.

(iv) Printing and Information Related Business

While domestic sales of products for flyers, advertising, and publishing were sluggish due to the structural contraction of the information-related printing market, sales of products for paper containers and metal printing for beverage cans remained strong. In response to the difficulty in procuring raw materials, the increase of prices and surging energy and other costs, the Group collaborated with competitors and implemented the structural reform of its business to reduce costs.

In overseas markets, the market was weak in Europe and China due to the affairs in Ukraine and the impact of COVID-19. However, in other regions, sales were firm, reflecting a recovery in economic activities and progress in the expansion of sales.

As a result, net sales for this segment as a whole increased to 55,750 million yen (up 14.1% year on year), but operating profit decreased to 737 million yen (down 25.9% year on year).

With the application of the Accounting Standard for Revenue Recognition, etc., net sales decreased 34 million yen and operating profit decreased 13 million yen.

(v) Other

This Other segment includes businesses not included in the above segments, services provided by Toyo Ink SC Holdings Co. Ltd., etc., and other businesses. Net sales decreased to 3,704 million yen (down 17.2% year on year), but operating profit increased to 776 million yen (up 36.3% year on year) due to a decrease in retirement benefit expenses and other factors.

With the application of the Accounting Standard for Revenue Recognition, etc., net sales decreased 0 million yen and operating profit decreased 0 million yen.

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