Teijin fy2011 q2_results

Teijin Limited

November 1, 2011

Flash Report-2Q Results and FY11 Outlook-

Outline of FY11 2Q Results

2

(1) Consolidated Results Highlights

9.2

11.5

0

10

20

30

10/1H 11/1H

393.6399.9

0

100

200

300

400

500

10/1H 11/1H

20.720.5

0

20

40

60

10/1H 11/1H

Operating Movement

SalesSales OPOP Net incomeNet income

--2%2%

++1%1% --20%20%

SalesSales OPOP Net incomeNet income

Quarterly Movement（1Q ’10 –2Q ’11）

FCFFCF

5.2

8.5

7.5

4.0

2.9

6.3

0

5

10

1Q 2Q 3Q 4Q

209.5206.3207.3

192.6204.0

189.6

150

200

250

1Q 2Q 3Q 4Q

12.2

15.9

12.4

8.1

9.6

11.0

0

10

20

1Q 2Q 3Q 4Q

FY11FY10（Compared with FY10 1H）

(16.6)

8.3

(20)

(10)

0

10

10/1H 11/1H

（¥bn）

--24.924.9 ¥¥bnbn

1.Outline of FY11 2Q Results

3

8.3

15.3

28.0

11.7

48.5

11.74

11.5

0.8

6.9

19.2

(1.3)

20.5

(0.0)

5.1%

20.5

399.9

FY101H

-0.215.2R&D expenses

(16.6)

23.2

12.9

43.8

9.33

9.2

1.2

9.4

19.7

(2.0)

21.7

1.0

5.2%

20.7

393.6

FY111H

-24.9

-4.8

+1.2

-4.7

-2.40

-2.4

+0.4

+2.5

+0.5

-0.6

+1.2

+1.0

-

+0.1

-6.3

Diff.

Income before income taxes

Minority interest in income

Income taxes

FCF

EPS (¥)

(¥bn)

Depreciation & amortization

Extraordinary items(net)

Nonoperating items (net)

EBITDA *1

Net income

OP margin

Net sales

OP

Ordinary income

CAPEX *2


◆ Operating Results

*1 EBITDA = Operating income + Depreciation & amortization

*2 CAPEX includes investments in intangible assets

◇PL exchange rate

1.33

121

91

FY101H

115¥/€

1.40

82

FY111H

US$/€

¥/US$

Note: 1H for overseas companies is Jan.1 to June 30.

Net sales and operating income: Essentiallylevel with FY10 1H, reflecting:

• A decline in sales and operating income inthe Films and Plastics segment, owing tothe impact of the earthquake, together withstagnating demand for electronicsequipment

• Firm sales and operating income in theHigh-Performance Fibers and the PolyesterFibers segments

Ordinary income: Up, reflecting better results atunconsolidated affiliates accounted for by theequity method

Net income: Down, owing to increase in incometaxes resulting from an adjustment of deferredincome taxes

4

-0.3%

+0.05

+20.6

+5.8

+23.0

Diff.

+3.4

+1.6

+7.0

(Impact offoreign

exchange rate)

37.0%37.3%ShareholdersShareholders’’equity ratioequity ratio

Sep. 30, ‘11Mar. 31, ‘11(¥bn)

0.99

288.0

290.1

784.5

0.94

267.4

284.2

761.5

D/E ratio

Interest-bearingdebt

Total assets

Shareholders’equity

◆Financial Position

◆ Cash Flows

1.32

108

81

Dec. 31, ‘10

117¥/€

June. 30, ‘11

1.45US$/€

81¥/US$

◇BS exchange rate


-2.114.5-16.6-18.31.6FY11 1H

2.7-5.68.3-12.821.1FY10 1H

(¥bn)

Cash & cashCash & cashequivalentsequivalents

FinancingFinancingactivitiesactivities

OperatingOperatingactivitiesactivities

InvestingInvestingactivitiesactivities

FCFFCF

Note: 1H for overseas companies is Jan.1 to June 30.

Total assets: Up

• Increase in inventories

Shareholders’ equity: Up

• Owing to quarterly net income

• Despite decline in valuationdifference on available-for-salesecurities

Interest-bearing debt: Up

• Attributable to increase in workingcapital

5

’’10.910.9 ’’11.911.9

20.720.720.520.5

784.5784.5

◇◇ OPOP

◇◇ Total assetsTotal assets

+0.1+0.1 ¥¥bnbn

◆ Analysis of Changes in Operating Results and Financial Position

+23.0+23.0 ¥¥bnbnCommercial

paper-6.0

288.0288.0267.4267.4

◇◇ InterestInterest--bearing debtbearing debt

Loans+30.5

Bonds, etc-3.9

Netincome

+9.2

Dividendspaid-3.0

◇◇ ShareholdersShareholders’’ equityequity+5.8+5.8 ¥¥bnbn

+20.6+20.6 ¥¥bnbn

Workingcapital up

+37.2

CAPEX+12.9

Depreciation &Amortization

-23.2

290.1290.1284.2284.2

’’11.311.3 ’’11.911.9

761.5761.5

’’11.311.3 ’’11.911.9 ’’11.311.3 ’’11.911.9

Valuationand

translationadjustmentsand others

–0.4

Investmentsin securities,

etc.-3.9

（¥bn）（¥bn）

Salesprices up

+17.0

Sales volumeup (High-

performancefibers and

Pharma.&H.H.C)+7.0

Differencesin raw

materialsand fuelprices-15.0

Sales volumedown (Plastics& Films)–6.5 Others

-2.4


6

+1.6%+0.426.225.8-2.0%-7.8374.7382.5Total

-+2.02.0(0.0)+6.0%+3.153.950.9Polyester Fibers

+0.7%

-

+21.0%

+22.9%

+0.9%

-47.7%

+265.1%

%%

ChangeChange

-1.6%

-

+8.6%

+3.1%

+2.4%

-16.1%

+4.4%

%%

ChangeChange

+0.120.720.5-6.3393.6399.9Total

-0.5(6.7)(6.2)---Elimination & corporate

+0.21.10.9+1.518.917.4Others

+0.42.41.9+3.2105.4102.2Trading & Retail

+0.111.911.8+1.668.066.5Pharma. & H.H.C.

-5.25.710.9-17.993.0110.8Films & Plastics

+3.14.21.2+2.354.452.1High-Performance Fibers

Diff.FY11

1H

FY10

1HDiff.

FY11

1H

FY10

1H

OPOPSalesSales

（¥bn）

(2) Operating Results by Segment (Comparison with FY10 1H)


7

25.6 26.9

26.527.5

0

20

40

60

80

10/1H 11/1H

1.1

0.0

2.0

2.2

0

5

10

10/1H 11/1H

2Q

1Q

52.1

4.2

+4.4%+4.4%

54.4

1.2

+265.1%+3.14.21.2OP

+4.4%+2.354.452.1Sales

ChangeDiff.11/1H10/1H(¥bn)

◆ Summary & Actions

◇Aramid Fibers:

Para-aramid fibers: Demand was robust from allindustries

Meta-aramid fibers: Demand was firm for use inprotective clothing

Pushed ahead with efforts to cultivate new applications

◇Carbon Fibers and Composites:

Demand was brisk for use in aircraft

Demand was solid for use in natural energy industries,as well as in civil engineering

Demand for use in pressure vessels was hampered bythe economic downturn in Europe

In Asia, sales for use in compounds and in sports andleisure equipment were sluggish

Actively marketed new thermoplastic CFRP to theautomotive industry

++265.1%265.1%

① High-Performance Fibers: Increase in sales and operating income

(¥bn)

SalesSales OPOP


8

24.7 23.8

26.2 30.2

0

20

40

60

80

10/1H 11/1H

0.5

(0.0)

1.5

(2)

0

2

4

6

10/1H 11/1H

2Q

1Q

50.9

2.0

+6.0%+6.0%

53.9


-+2.02.0(0.0)OP

+6.0%+3.153.950.9Sales


++2.02.0¥¥bnbn

(¥bn)

SalesSales OPOP

② Polyester Fibers: Increase in sales, return to profitability

◇ Polyester Fibers:

Profit structure continued to improve steadily, thanks to theshift of production of certain products overseas

Demand for automotive applications flagged in theimmediate aftermath of the earthquake, but rallied sharplyfrom the summer forward

Sales were robust due to efforts to capitalize on demandassociated with official energy saving initiatives andmeasures to promote cooler business attire, as well as ondemand for materials for civil engineering and constructionapplications related to post-quake reconstruction


9

③ Films and Plastics: Decline in sales and operating income

59.1

46.1

51.846.9

0

20

40

60

80

100

120

140

10/1H 11/1H

3.6 3.2

7.3

2.6

0

5

10

15

20

10/1H 11/1H

10.9

93.0

5.7

--16.1%16.1%

--47.7%47.7%

2Q

1Q

110.8◆ Summary & Actions

-47.7%-5.25.710.9OP

-16.1%-17.993.0110.8Sales


◇Plastics:

Polycarbonate resin: Sales volume declined, owing to the impact of the

earthquake, together with stagnating demand for use inLCD televisions, computers and other electronicsequipment

Raw materials prices remained high

Processed polycarbonate resin products: Sales of polycarbonate retardation film for use in 3D

glasses for movie theaters were sluggish◇Films: Demand was robust in the first half (Jan. to June) for use as

FPD reflective film and in solar cell back sheets, butsoftened toward the end of the second quarter

Forced to suspend production at two facilities followingearthquake (resumed production at the Ibaraki Factory at theend of March 2011 and at the Utsunomiya Factory in mid-June)

(¥bn)

SalesSales OPOP


10

32.8 33.1

34.933.7

0

20

40

60

80

10/1H 11/1H

4.9 4.7

7.26.9

0

10

20

30

10/1H 11/1H

11.9

68.0

11.8

+2.4%+2.4%

+0.9%+0.9%

2Q

1Q

66.5◆ Summary & Actions

◇Pharmaceuticals:

Japan: Sales of new drugs continued to expand favorably FEBURIC (treatment for hyperuricemia and gout)Synvisc Dispo 2ml (intra-articular injection-form drug for

treating pain associated with osteoarthritis of the knee)

Sales of osteoporosis treatment Bonalon were steady

Overseas: Expanded geographical scale of marketing effortsfor hyperuricemia treatment

Launched in ROK in July 2011Signed exclusive distributorship agreements for Mexico,

Middle East and North Africa, India, Southeast Asia andothers

◇Home Health Care:

HOT: Rental volume remained firm

CPAP/SAFHS: Rental volume continued to climb

Overseas: Took steps to expand rental volume and reinforceearnings base

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

+0.9%+0.111.911.8OP

+2.4%+1.668.066.5Sales


(¥bn)

SalesSales OPOP

④ Pharmaceuticals & Home Health Care: Increase in sales, slight increase in operating income


11

53.5 57.2

48.7 48.2

0

20

40

60

80

100

120

140

10/1H 11/1H

1.2

1.3

1.00.7

0

1

2

3

4

5

10/1H 11/1H

105.4

2.4

102.2

1.9

+3.1%+3.1%

+22.9%+22.9%

2Q

1Q

◇Trading and Retail:

Textiles and Apparel Sales of sportswear, everyday apparel and men’s suits

rose, reflecting efforts to expand our mainstay OEMapparel business

Profit structure improved gradually, augmented by stepstaken to reduce costs through greater productionefficiency and the integration of production facilities

Industrial Textiles and Materials

Sales of products for automotive-related applicationsflagged early in the first half, owing to the earthquake, butdemand rallied toward the end of the period

Sales of industrial fabrics, nonwoven materials, filters andmaterials for civil engineering and fisheries-relatedapplications were firm

Sales of heat-insulating films rose, bolstered by demandrelated to efforts to reduce energy consumption

+22.9%+0.42.41.9OP

+3.1%+3.2105.4102.2Sales


(¥bn)

SalesSales OPOP


⑤ Trading and Retail: Increase in sales and operating income


12

◆ Changes in Net Sales and Operating Income for FY10-FY11

20.7

(6.7)

1.1

26.2

2.4

11.9

5.7

2.0

4.2

393.6

18.9

374.7

105.4

68.0

93.0

53.9

54.4

11HH

12.313.925.814.611.3Total

194.1180.6382.5198.0184.5Total

11.0

(3.2)

0.3

1.0

7.2

3.2

0.5

2.0

189.6

9.0

48.2

34.9

46.9

23.8

26.9

11QQ

2.21.21.10.0High-Performance Fibers

27.552.126.525.6High-Performance Fibers

9.6

(3.5)

0.8

1.3

4.7

2.6

1.5

204.0

9.9

57.2

33.1

46.1

30.2

22QQ

FY11FY11

20.5

(6.2)

0.9

1.9

11.8

10.9

(0.0)

399.9

17.4

102.2

66.5

110.8

50.9

11HH

12.4

(3.1)

1.0

1.2

4.9

7.3

(0.0)

207.3

9.3

53.5

32.8

59.1

26.2

22QQ

8.1

(3.1)

(0.1)

0.7

6.9

3.6

0.0

192.6

8.1

48.7

33.7

51.8

24.7

11QQ

FY10FY10

Elimination & corporate

Trading & Retail

Pharma. & H.H.C.

Others

Trading & Retail

Total

Total

Op

erating

Inco

me

Op

erating

Inco

me

（¥bn）

Polyester Fibers

Films & Plastics

Others

Pharma. & H.H.C.

Films & Plastics

Polyester Fibers

Net

Sales

Net

Sales


Outlook for FY11

14

The European sovereign debt and financial crises have triggered a global economic slowdown

Economic growth in the PRC—until recently the principal driving force behind the global economy—hasslowed as a consequence of monetary restraint

Despite having largely recovered from the impact of the Great East Japan Earthquake, the Japaneseeconomy continues to be hampered by a record-high yen, which impedes the profitability of exports

Results remain firm in the Pharmaceuticals and Home Health Care segment, bolstered by favorable salesof new drugs, and in the aramid fibers business, owing to robust demand

As a consequence of flagging demand from and prolonged inventory adjustments by manufacturers ofLCD televisions, computers and solar cells, the Films and Plastics segment is on a downward swing

Our polyester fibers subsidiaries in Thailand have had to suspend operations temporarily as a result ofthe recent severe flooding

2. Outlook for FY11

(1) Assessment of the operating environment

GDP Growth (PRC)

0

2

4

6

8

10

12

10-12

’10

1-3

’11

4-6 7-9 10-12 1-3

’12

GDP Growth (USA and Europe)

0

0.5

1

1.5

2

2.5

3

3.5

10-12

’10

1-3

’11

4-6 7-9 10-12 1-3

’12

USA

Europe

GDP Growth (Japan)

-4

-3

-2

-1

0

1

2

3

4

5

10-12

’10

1-3

’11

4-6 7-9 10-12 1-3

’12

(%) (%) (%)

*Source: Teijin estimates based on data published by JRI, JCER and others

15

(2) Movement of Results

OPNet income

Annual SalesAnnual Sales 2H OP2H OP

1H OP1H OP

Annual net incomeAnnual net income

(43.0)(35.7)

25.2 20.5

3.5

9,500

7,6588,157

8,687

-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

-50

-25

0

25

50

75

20.7

28.0 23.8

5.5

18.013.4

48.6

15.12.8

20.510.7

2.9

50.0

943.4

765.8815.7

890.0

(400)

(200)

0

200

400

600

800

1,000

(50)

(25)

0

25

50

75

Impact ofstandardization

of fiscal years

Sales

24.0

FY08Actual

FY09Actual

FY10 Actual FY11 Outlook

(¥bn)

2．Outlook for FY11

16

33.0

55.0

45.0

32.0

61.0

6.6%

61.0

920.0

FY11 PreviousOutlook*2

0.0

0.0

0.0

-8.0

-11.0

-

-11.0

-30.0

Difference(Amount)

31.5

56.4

29.2

25.2

50.3

6.0%

48.6

815.7

FY10FY10

-0.3%-5.6%Operating marginOperating margin

+4.8%

-2.5%

+53.9%

-4.7%

-0.7%

+3.0%

+9.1%

%%

+1.5

-1.4

+15.8

-1.2

-0.3

+1.4

+74.3

AmountAmount

DifferenceDifference

45.0CAPEXCAPEX *1*1

33.0R&D expensesR&D expenses

890.0Net salesNet sales

50.0Operating incomeOperating income

50.0Ordinary incomeOrdinary income

55.0

24.0

FY11FY11

OutlookOutlook

Net incomeNet income

Depreciation &Depreciation &amortizationamortization

（¥bn）


(3) Summary of Outlook for FY11

3.0Year-end

6.0Annual dividends

3.0Interim

◆Forecast for Fiscal 2011(Yen/share) ◆Exchange rate and Crude Oil Price Forecast for FY11

US$109/barrelUS$109/barrelDubai crude oil price

111115JPY per EUR

7981JPY per USD

FY11 Current OutlookFY11 Current OutlookFY11 Previous OutlookFY11 Previous Outlook*2

*2 Announced on August 1, 2011

No change from previous outlookNo change from previous outlook*2*2

*1 CAPEX includes investments in intangible assets

17

TCT

TPL

TJT

TNI Textile plantTNI Dyeing plantBangkok

(4) Impact of Flooding on Thai Operations

Ⓒ 2011 Google –

Map data Ⓒ2011Tele Atlas


Operating normally

Operation suspendedon Oct. 16



Current status

Manufacture and sales of polyestertextile

Manufacture and sales of polyesterfilament yarn, staple fiber andindustrial fiber

Manufacture and sales of polyesterfilament yarn and staple fiber

Manufacture and sales of corematerials used in the carcasses oftransmission belts for productionmachinery

Main business

Textile plant: Wellgrow IndustrialEstate in Chachoengsao Province

Dyeing plant: Samut Prakan Province

Pathum Thani Province

Bang Pa-in Industrial Estate inAyutthaya Province

Rojana Industrial Park in AyutthayaProvince

Location

Thai Namsiri Intertex Co.,Ltd. (TNI)

Teijin Polyester (Thailand)Limited (TPL)

Teijin (Thailand) Limited(TJT)

Teijin Cord (Thailand) Co.,Ltd. (TCT)

Company name

18

Estimated impacton FY11 results

Operating income

Loss of earnings due to suspension ofoperations at Teijin Group’s and customers’facilities – ¥1.0 billionIncrease in costs resulting from need to shiftproduction to alternate sites

Extraordinaryloss

Cost to restore damaged facilities, net ofinsurance settlements

Not reflected incurrent forecasts

The estimated impact on full-term fiscal 2011 operating income is as of the date of our resultsannouncement for the first half. Depending on the time required before production facilitiescan resume operations, and other factors, this figure may change

We will formulate an estimate for extraordinary loss once entry into the damaged facilitiesbecomes possible

Should it be determined that results will diverge from our current forecasts,we will release new forecasts as soon as possible

2. Outlook for FY11

(5) Impact of severe flooding in Thailand

19

(6) Outlook by Segment

20.7

(6.7)

1.1

26.2

2.4

11.9

5.7

2.0

4.2

393.6

18.9

374.7

105.4

68.0

93.0

53.9

54.4

11HH

FY11FY11 Revised OutlookRevised Outlook *2*2

23.8

(6.9)

2.0

28.8

2.6

16.1

4.8

1.5

3.8

421.4

21.1

400.3

114.6

77.0

97.0

56.1

55.6

22HH

44.5

(13.5)

3.0

55.0

5.0

28.0

10.5

3.5

8.0

815.0

40.0

775.0

220.0

145.0

190.0

110.0

110.0

SubSub--totaltotal

5.5

0.0

0.0

5.5

0.0

0.0

2.0

0.0

3.5

75.0

0.0

75.0

5.0

5.0

35.0

10.0

20.0

AdditionalAdditionalperiodperiod

50.0

(13.5)

3.0

60.5

5.0

28.0

12.5

3.5

11.5

890.0

40.0

850.0

225.0

150.0

225.0

120.0

130.0

TotalTotal

71.07.064.036.527.5Total

880.080.0800.0425.0375.0Total

61.0

(13.0)

3.0

5.0

28.0

20.0

4.0

14.0

920.0

40.0

225.0

150.0

245.0

120.0

140.0

TotalTotal

7.0

0.0

0.0

0.0

0.0

3.0

0.5

3.5

80.0

0.0

5.0

5.0

40.0

10.0

20.0

AdditionalAdditionalperiodperiod

10.55.55.0High-Performance Fibers

120.065.055.0High-Performance Fibers

54.0

(13.0)

3.0

5.0

28.0

17.0

3.5

840.0

40.0

220.0

145.0

205.0

110.0

SubSub--totaltotal

32.0

(6.5)

2.0

3.0

15.5

10.5

2.0

445.0

20.0

120.0

75.0

110.0

55.0

22HH

22.0

(6.5)

1.0

2.0

12.5

6.5

1.5

395.0

20.0

100.0

70.0

95.0

55.0

11HH

FY11 Previous OutlookFY11 Previous Outlook *1*1

Elimination & corporate

Trading & Retail

Pharma. & H.H.C.

Others

Trading & Retail

Total

Total

Op

erating

Inco

me

（¥bn）

Polyester Fibers

Films & Plastics

Others

Pharma. & H.H.C.

Films & Plastics

Polyester Fibers

Net

Sales

*1 Announced on August 1, 2011*2 Announced on November 1, 2011


20

50.050.0

61.061.0

Fall in rawmaterials and

fuel prices+ 4.0

Decline insales

volume– 12.0

Costreductions

+ 2.0

Reductionof salesprices– 4.0

Previous forecastPrevious forecast Current forecastCurrent forecast

¥ bn

Breakdown of revision of operating income forecastBreakdown of revision of operating income forecast

Foreignexchange

adjustment–1.0

・ Owing to a deterioration of market conditions, sales volume is expected to decline,particularly in the Films and Plastics segment

・ Forecasts incorporate an estimate of the impact of flooding in Thailand on ourbusiness, based on information currently available

・ We are stepping up short-term efforts to reduce costs

2. Outlook for FY11

(7) Factors behind revision of operating income forecast

21

20.049.447.0(75.9)(25.5)FCFFCF（（¥¥bnbn））

105.0

260.0

760.0

6.0

24.4

39%

0.9

5.6%

8.2%

6.6%

FY11FY11OutlookOutlook

105.0

267.4

761.5

5.0

25.6

37.3%

0.94

6.0%

9.1%

6.1%

FY10FY10ActualActual

75.3

320.3

823.1

2.0

(36.3)

33.0%

1.18

1.8%

(12.4%)

1.6%


85.3127.8EBITDAEBITDA（（¥¥bnbn））*3*3

361.3325.2InterestInterest--bearing debtbearing debt （（¥¥bnbn））

874.2

5.0

(43.7)

35.0%

1.18

1.9%

(12.3%)

1.9%


13.2Earnings per share (Earnings per share (¥¥))

8.0Dividends per share (Dividends per share (¥¥))

1,016.0Total assetsTotal assets（（¥¥bnbn））

38.5%ShareholdersShareholders’’ equity ratioequity ratio

0.83D/E ratioD/E ratio

6.3%

3.3%

6.5%


Operating marginOperating margin

ROEROE *2*2

ROAROA *1*1

**11 ROA= Operating income/Total assetsROA= Operating income/Total assets

*2 ROE= Net income/Shareholders*2 ROE= Net income/Shareholders’’ equityequity

*3 EBITDA = Operating income + Depreciation & amortization*3 EBITDA = Operating income + Depreciation & amortization

(8) Financial Highlights


22All product names in this document are registered trademarks.

DisclaimerAny statements in this document, other than those of historical fact, are forward-looking statements about the future performanceof Teijin and its Group companies, which are based on management’s assumptions and beliefs in light of information currentlyavailable, and involve risks and uncertainties. Actual results may differ materially from these forecasts.

Business RisksThe Teijin Group recognizes certain risks as having the potential to affect its operating results and/or financial position. As of thedate of this document, these risks included, but were not limited to, the risks listed below.

(1) Market-related riskThe Teijin Group manufactures and sells products, the sales of which may be affected by market conditions, competition withother companies and price fluctuations arising thereof, as well as fluctuations in raw materials prices and fuel costs, and suchmarket 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 operatingresults, financial position and public reputation.

(3) R&D-related risk in the pharmaceuticals businessR&D in the pharmaceuticals business is characterized by significant investments of funds and time. Pharmaceuticals discoveryresearch has a high incidence of failure to discover promising drugs. There are also risks that plans to apply for regulatoryapproval may be abandoned or that approval may be rescinded.

(4) Risks related to overseas operationsThe 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 onthe Group; economic fluctuations; or social unrest triggered by acts of terror or war.

(5) Risks related to accidents and disastersIn the event of a major natural disaster or unforeseen accident that results in damage to the Teijin Group’s production facilities orsignificantly impedes the Group’s supply chain, such developments may have a negative impact on the Group’s operating resultsand/or financial position.

Disclaimer Regarding Forward-Looking Statements and Business Risks

This material is based on the consolidated results for FY11 2Q announced at 11:30 A.M. on November 1, 2011 (local time in Japan).

23

Consolidated Balance Sheets

313.8

284.6

468.3

782.0

423.8

358.3

782.0

Jun. 30,Jun. 30,’’1111

288.0267.4293.2305.9329.9320.3（ Interest-bearing debt ）

310.3307.7305.6294.3295.7295.3Net assets

474.2453.8486.3482.5509.8527.8Liabilities

784.5761.5791.9776.7805.5823.1Total liabilities and net assets

415.1

369.4

784.5

Sep. 30,Sep. 30,’’1111

424.6

336.9

761.5

Mar. 31,Mar. 31,’’1111

474.1

331.5

805.5

Jun. 30,Jun. 30,’’1010

490.3

332.7

823.1

Mar. 31,Mar. 31,’’1010

450.3

326.4

776.7

Sep. 30,Sep. 30,’’1010(¥bn)

Dec. 31,Dec. 31,’’1010

446.9Fixed assets

791.9Total assets

345.0Current assets

Note: For more information, see Teijin’s quarterly results report (Consolidated Financial Results for the Second Quarter of FY11).

（Supplementary Information）

24

Consolidated Statements of Income

6.3

0.5

5.9

12.7(0.1)12.8

2.6

(0.4)

1.8

11.0

44.7

55.7133.9

189.61Q

FY11

4.0

0.2

2.4

6.7(1.1)7.8

0.9

(0.6)

(0.3)

8.1

44.0

52.0140.6

192.6

1QFY10

7.5

0.5

4.5

12.5(0.2)12.7

1.7

(0.9)

0.3

12.4

45.4

57.8149.5

207.3

2Q

8.5

1.5

6.5

16.4(0.5)16.9

2.2

(0.7)

1.0

15.9

44.9

60.8145.4

206.3

3Q 2Q4Q（¥bn）

2.9

0.6

3.5

7.0(1.9)8.9

1.3

(0.9)

(0.8)

9.6

46.5

56.1147.9

204.0

2.8Income taxes

0.9Minority interest (net)

5.2Net income

8.9(4.0)12.9

1.5

(0.9)

0.8

12.2

46.6

58.7150.8

209.5

Cost of sales

Nonoperating items (net)

Extraordinary items(net)

Ordinary income

（Equity on gains and losses of

unconsolidated subsidiaries and affiliates)

( Balance of financial expenses)

Operating income

SG & A

Income before income taxes

Gross profit

Net Sales

Note: For more information, see Teijin’s quarterly results report (Consolidated Financial Results for the Second Quarter of FY11).


25

1.21.2Other expenses

3.92.6Equity in earnings of affiliates

1.0

4.1

0.8

2.1

5.1

0.5

0.5

0.3

FY111H

0.4Other income

FY101H（¥bn）

(0.0)

3.7

0.3

2.3

3.7

0.5

0.2

Foreign exchange loss

Nonoperating expenses total

Interest income

Nonoperating items total

Interest expense

Nonoperating revenues total

Dividend income

◆ Nonoperating items

0.70.2Write-down of investmentsecurities

0.4-Provision for allowance fordoubtful accounts

0.7-Gain on sales of subsidiariesand affiliates' stocks

0.4-Earthquake-related expenses

-1.0Restructuring costs

-1.2Gain on sales of investmentsecurities

(2.0)

2.9

0.3

1.0

0.2

1.0

0.2

FY111H

FY101H（¥bn）

0.1Loss on impairment

1.4Others

(1.3)Extraordinary items total

0.2Loss on disposal and sales offixed assets

1.5Extraordinary income total

2.8Extraordinary losses total

0.3Others

◆Extraordinary items


26

33.032.0

33.4

37.636.3

0

20

40

84.6

75.8

36.3

29.2

45.0

55.056.461.9

67.4

62.7

0

20

40

60

80

100

’07 ’08 ’09 ’10 ’11

Depreciation &Amortization

CAPEX

’07 ’08 ’09 ’10 ’11Outlook Outlook

CAPEX, Depreciation & Amortization, and R&D Expenses

CAPEX /CAPEX /Depreciation & AmortizationDepreciation & Amortization R&D ExpensesR&D Expenses

(¥bn) (¥bn)


27

2.6

3.24.43.6

7.38.1

(2)

0

2

4

6

8

1Q 2Q 3Q 4Q 1Q 2Q

◆◆ Films & PlasticsFilms & Plastics

27.5

26.9

26.6

25.6

26.5

24.7

0

20

40

60

1Q 2Q 3Q 4Q 1Q 2Q

1.2

1.10.0 2.1 2.0

2.2

(2)

0

2

4

6

8

1Q 2Q 3Q 4Q 1Q 2Q

◆◆HighHigh--PerformancePerformanceFibersFibers

33.1

34.9

34.2

33.7

32.8

35.7

0

20

40

60

1Q 2Q 3Q 4Q 1Q 2Q

30.2

23.8

27.7

24.7

26.2

24.9

0

20

40

60

1Q 2Q 3Q 4Q 1Q 2Q

◆◆ Pharma. & H.H.C.Pharma. & H.H.C.◆◆ Polyester FibersPolyester Fibers

(¥bn)

’10 ’11

46.146.9

51.5

51.8

59.154.8

0

20

40

60

1Q 2Q 3Q 4Q 1Q 2Q

1.4

(0.0)

0.0 1.6

0.5

1.5

(2)

0

2

4

6

8

1Q 2Q 3Q 4Q 1Q 2Q

4.7

7.2

4.3

6.9

4.9

6.8

(2)

0

2

4

6

8

1Q 2Q 3Q 4Q 1Q 2Q

’10 ’11

’10 ’11 ’10 ’11

’10 ’11

’10 ’11 ’10 ’11

’10 ’11

◆ Changes in Operating Income by Business Segment

Net SalesNet Sales

Operating IncomeOperating Income


28

0

50

100

150

200

250

300

350

400

450

500

Jan. Apr. Jul. Oct. Jan. Apr. Jul. Oct. Jan. Apr. Jul.

((Cent/gal)Cent/gal)

0

20

40

60

80

100

120

140

Jan. Apr. Jul. Oct. Jan. Apr. Jul. Oct. Jan. Apr. Jul.

($/($/BL)BL)’09

Dubai Crude Oil Prices Benzene Prices

’09 ’10’10 ’11 ’11

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


Dubai Crude oilprices

Dubai Crude oilprices

BenzeneBenzene

29

1

1.1

1.2

1.3

1.4

1.5

1.6

1.7

Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep.

($/($/EUR)EUR)

50

60

70

80

90

100

110

120

130

140

150

160

170

Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep.

((¥¥/$/$)) ’08((¥¥//EUR)EUR)

’08 ’09’09 ’10 ’10’11 ’11

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

¥ / €

3-month

average

¥ / €

3-month

average

¥/ €

Month-end

TTM

¥/ €

Month-end

TTM

¥/ $

Month-end

TTM

¥/ $

Month-end

TTMSep. 2011

¥77 / $1.00

Sep. 2011

¥104 / €1.00

Jul. 2008

$1.56 / €1.00

$ / €

Month-end

TTM

$ / €

Month-end

TTM

$ / €

3-month

average

$ / €

3-month

average

Sep. 2011

$1.36 / €1.00


30

0

20

40

60

80

100

120

140

160

180

200

220

240

Jan.Apr.Jul. Oct.Jan.Apr.Jul. Oct.Jan.Apr.Jul.

((Cent/kg)Cent/kg)

Polyester Fibers Prices, Raw Materials Prices

EGEG

POY 150DPOY 150D

PTAPTA

’09 ’10

0

100

200

300

400

500

Jan.Apr. Jul. Oct. Jan.Apr. Jul. Oct. Jan.Apr. Jul.

((Cent/kg)Cent/kg)

Cotton PriceCotton Price

SF 1.5DSF 1.5D

SPREADSPREAD

’09 ’10

EGEG

PTAPTA

Filament yarnFilament yarn Staple FibersStaple Fibers

’11 ’11

SPREADSPREAD

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


31

0.5

0.4

0.2

0.3

0.3

0.3

1.0

2.3

2.4

7.9

2.7

5.2

1Q

FY11

0.0

0.4

0.2

0.3

0.3

0.4

1.0

2.2

2.1

7.9

2.7

5.2

2Q

-----HyperuricemiaHyperuricemia andandgoutgout

FeburicFeburic

0.70.50.2--OsteoarthritisOsteoarthritis pain inpain inthe kneethe knee

Synvisc DispoSynvisc Dispo

1.60.30.50.40.4PsoriasisPsoriasisBonalfaBonalfa

1.80.50.40.40.4HyperlipidemiaHyperlipidemiaTricorTricor

4.41.01.21.11.1LaxativeLaxativeLaxoberonLaxoberon

1.20.30.40.30.3AsthmaAsthmaAlvescoAlvesco

1.0

9.1

10.0

32.4

11.4

21.0

AnnualAnnualTotalTotal

0.2

2.0

2.4

7.3

2.6

4.8

4Q

0.3

2.4

2.9

8.9

3.1

5.8

3Q

0.2

2.3

2.1

8.0

2.8

5.2

2Q

FY10

0.3

2.4

2.5

8.1

2.9

5.2

1Q

BronchodilatorBronchodilator

Severe infectionSevere infection

ExpectorantExpectorant

OsteoporosisOsteoporosis

OsteoporosisOsteoporosis

IndicationIndication

OnealfaOnealfa

Osteoporosis totalOsteoporosis total

MucosolvanMucosolvan

VenilonVenilon

BonalonBonalon**

SpiropentSpiropent

ProductProduct

（¥bn）

* 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

*1 Teijin filed for approval to manufacture and market GTH-42V in Japan in February 2011.

*2 Teijin filed for approval to manufacture and market GTH-42J in Japan in August 2011.

*3 Phase I clinical trials for NA872ET began in September 2011.

*4 Teijin filed for approval to manufacture and market ITM-014 in Japan in September 2011.*5 Teijin commenced clinical testing of GGS （Venilon®®）for microscopic polyangiitis, a new indication.

TMX-67[[Feburic®® ]]

BTR-15K[[Alvesco®® ]]

(New indication: asthma(New indication: asthmain children)in children)

Approved/NewLaunch

TV-02H[[BonalfaBonalfa®® Ointment]Ointment]

(PRC)(PRC)

GGS[[VenilonVenilon®® ]]

(New indication for(New indication formultiple sclerosis)multiple sclerosis)

GGS *5

[[VenilonVenilon®® ]](New indication for(New indication for

microscopicmicroscopicpolyangiitispolyangiitis))

Other

ITM-014 *4ITM-077NTC-801

Cardio-vascular and

metabolicdisease

NA872ET *3

[[Mucosolvan®® ]]

Respiratorydisease

GTH-42V *1

GTH-42J *2

[[Bonalon®® ]]

ITM-058Bone and

joint disease

FiledPhaseⅢPhaseⅡPhaseⅠ

Phase of Clinical Trials

◆ Development Status by Therapeutic Area(As of September 30, 2011)


33

◆ Status of New Products

Licensed in fromNycomed Group(Switzerland)

Approved for newindication (asthma inchildren) on January 21,2011

Commenced sales inJapan on April 7, 2011

InhaledA new indication for Alvesco, an inhaledsteroid for treating asthma already on themarket, for children; this is the first drugof its kind in Japan that is taken once daily;equally or more efficacious than otherinhaled steroids, and less likely to causeeither systemic or localized side effects.

Asthma in childrenAlvesco 100μg Inhaler 56 Puff(ciclesonide)

RemarksDosage

formMedical properties/characteristicsTarget diseaseBrand name (Generic name)

Developed in-house

Commenced sales inJapan on May 17, 2011

OralA novel non-purine drug that inhibitssynthesis of uric acid; taken once daily, itreduces serum uric acid levels to thetarget level and keeps it low; noadjustment of dosage is required forpatients with mild to moderate renalimpairment, thereby offering hope to asignificantly broader group of patients.

Gout andhyperuricemia

Feburic

(febuxostat)

Licensed in fromGenzyme Corporation(U.S.A.)

Commenced sales inJapan on December 14,2010

InjectionTreatment for pain associated with OA ofthe knee. Because molecular weight ofsodium hyaluronate closely matches thatof healthy synovial fluid, direct injectioninto the knee causes a temporary increasein synovial fluid viscosity, improvingresistance to joint damage and relievingpain. Doses are smaller and fewerinjections are needed to achieve extendedpain relief, compared with otherviscosupplements.

Pain inosteoarthritis (OA)of the knee

Synvisc Dispo 2ml

(Sodium hyaluronate cross-linked polymer, cross-linkedwith vinyl sulfone）


(As of September 30, 2011)

34

Licensed in from IpsenPharma SAS (France)

InjectionSuppresses the excessive secretion of growthhormones associated with acromegaly;pharmaceutical formulation facilitates sustainedrelease and extended pharmaceutical action, whileprefilled syringe format makes it more convenientthan existing acromegaly drugs and thus moreconducive to patient compliance.

AcromegalyITM-014

（Lanreotide acetate）

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

Oral jellyOral jelly formulation of Bonalon (alendronatesodium hydrate), currently sold as an osteoporosisdrug; intended as the world’s first jelly-formosteoporosis treatment; offers promise as analternative for osteoporosis patients who disliketaking pills because it is easy to swallow andmoderately firm, so holds shape; also promisingbecause it is easily managed by elderly individuals.

OsteoporosisGTH-42J (alendronatesodium hydrate)

RemarksDosageform

Medical properties/characteristicsTarget diseaseCode No. (Generic name)

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

Filed in Japan inFebruary 2011.

InjectionIntravenous form of Bonalon, currently sold as anosteporosis drug; holds promise as an alternativeprescription in cases where patients are unable totake oral medications or where patientnoncompliance is an issue; also promising becauseless likely than oral drugs to cause side effects inthe upper gastrointestinal tract.

OsteoporosisGTH-42V (alendronatesodium hydrate)

Filed with PRC’s StateFood and DrugAdministration inSeptember 2010

(Supplemental NDA toBonalfa ointment2µg/g )

Topicalointment

Licensing-out of Bonalfa high ointment 20µg/g toChina; This product will offer an additionaltreatment option for psoriasis in China. Althoughtwo strengths (2µg/g and 20µg/g) of Bonalfaointment are available in Japan, only Bonalfaointment 2µg/g is available in China at present.

Psoriasis vulgarisTV-02H

(tacalcitol monohydrate)

◆ Newly Developed Pharmaceutical Candidates（As of September 30, 2011）【 Filed 】


35

【Phase III】

GGS (freeze-driedsulfonated humanimmunoglobulin)

Developing jointly withKaketsuken (Newindication)

InjectionElicits an immune response that lowers thefrequency of neurological manifestations ofmultiple sclerosis; holds promise as the first-choice alternative in cases where side effectsand/or patient noncompliance mean existing drugsare unviable.

Multiple sclerosis

RemarksDosage

form

Medical properties/characteristicsTarget diseaseCode No. (Generic name)

【Phase II】

Developing jointly withKaketsuken (Newindication)

InjectionDrug’s anti-inflammatory and immunoregulatoryactions mitigate autoimmune vasculitis; alsopromising as a treatment for mononeuritismultiplex, a neuropathic disorder that is notalleviated by standard therapies.

Microscopicpolyangiitis

GGS (freeze-driedsulfonated humanimmunoglobulin)

Developing jointly withNissan ChemicalIndustries, Ltd.

OralPromising atrial selective anti-arrhythmic drug forthe treatment and prevention of atrial fibrillationand flutter; expecting that it does not causeventricular side effects, such as arrhythmogenic ornegative inotropic action, a problem with existinganti-arrhythmic drugs.

Atrial fibrillationand flutter

NTC-801

Type II diabetes

Target disease


InjectionConsists glycemic control with low risk ofhypoglycemia, which stimulating glucose-dependent insulin secretion; Has body weight losseffect; once-weekly dosage is possible, enhancingconvenience; Also expecting it protects andpromotes regeneration of pancreatic beta cells,which secrete insulin.

ITM-077

（Taspoglutide）

RemarksDosage

form

Medical properties/characteristicsCode No. (Generic name)


36

Licensed in fromBoehringher IngelheimGmbH (Gernany)

OralSmall, sustained-release tablet-form version ofMucosolvan (ambroxol hydrochloride) that issmaller than Mucosolvan L Capsule and thus easierto take. This version is promising because it allowseasier apportioning of single doses

ExpectorantNA872ET


InjectionPromising for the treatment of osteoporosis due topotency in promoting bone formation, resulting in arapid increase in bone density and reduction in therisk of fracture. Superior to existing PTH deriveddrugs in its ability to increase bone density and itssafety (minimal risk of hypercalcemia).

OsteoporosisITM-058

Target disease RemarksDosage

form

Medical properties/characteristicsCode No. (Generic name)

【Phase I】


Teijin fy2011 q2_results

Technology

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