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
1.Outline of FY11 2Q Results
◆ 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
1.Outline of FY11 2Q Results
-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
1.Outline of FY11 2Q Results
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)
1.Outline of FY11 2Q Results
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
1.Outline of FY11 2Q Results
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
◆ Summary & Actions
-+2.02.0(0.0)OP
+6.0%+3.153.950.9Sales
ChangeDiff.11/1H10/1H(¥bn)
++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
1.Outline of FY11 2Q Results
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
ChangeDiff.11/1H10/1H(¥bn)
◇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
1.Outline of FY11 2Q Results
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
ChangeDiff.11/1H10/1H(¥bn)
(¥bn)
SalesSales OPOP
④ Pharmaceuticals & Home Health Care: Increase in sales, slight increase in operating income
1.Outline of FY11 2Q Results
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
ChangeDiff.11/1H10/1H(¥bn)
(¥bn)
SalesSales OPOP
◆ Summary & Actions
⑤ Trading and Retail: Increase in sales and operating income
1.Outline of FY11 2Q Results
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
1.Outline of FY11 2Q Results
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)
2.Outlook for FY11
(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
2.Outlook for FY11
Operating normally
Operation suspendedon Oct. 16
Operation suspendedon Oct. 12
Operation suspendedon Oct. 8
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
2.Outlook for FY11
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%
FY09FY09ActualActual
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%
FY08FY08ActualActual
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%
FY07FY07ActualActual
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
2.Outlook for FY11
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).
(Supplementary Information)
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
(Supplementary Information)
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)
(Supplementary Information)
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
(Supplementary Information)
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.
($/($/BL)BL)’09
Dubai Crude Oil Prices Benzene Prices
’09 ’10’10 ’11 ’11
【Source: Teijin estimates based on data published by Platt’s】 【Source: Teijin estimates based on data published by Dewitt】
(Supplementary Information)
Dubai Crude oilprices
Dubai Crude oilprices
BenzeneBenzene
29
1
1.1
1.2
1.3
1.4
1.5
1.6
1.7
Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep.
($/($/EUR)EUR)
50
60
70
80
90
100
110
120
130
140
150
160
170
Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep.
((¥¥/$/$)) ’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
(Supplementary Information)
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】
(Supplementary Information)
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
(Supplementary Information)
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)
(Supplementary Information)
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)
(Supplementary Information)
(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 】
(Supplementary Information)
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
Licensed in from IpsenPharma SAS (France)
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)
(Supplementary Information)
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
Licensed in from IpsenPharma SAS (France)
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】
(Supplementary Information)
37
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