Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2023
<Under Japanese GAAP>

February 8, 2023

These financial statements have been prepared for reference only in accordance with accounting principles and practices generally accepted in Japan.

Stock exchange listing: Tokyo (Prime Market)
NAGASE & CO., LTD.
Code number:8012
URL (https://www.nagase.co.jp/english/)Representative:
Kenji Asakura, Representative Director and President
Contact:
Yoshihisa Shimizu, Executive Officer, General Manager, Corporate Management Department
TEL:+81-3-3665-3103
Filing of quarterly report (scheduled): February 10, 2023
Start of distribution of dividends (scheduled): Supplementary documents of quarterly financial results: Yes
Quarterly investors' meeting: No(Note: Amounts have been rounded down to the nearest million yen.)

1. Consolidated Results for the Third Quarter of the Fiscal Year Ending March 31, 2023
(April 1, 2022 to December 31, 2022)(1) Consolidated Operating Results
Net sales
For the third quarter ended Millions of yen
December 31, 2022
695,680
December 31, 2021
574,139

Gross profit
%

21.2
26.5

(Note) Comprehensive income

Millions of yen

118,476
104,107

Operating income
%

13.8
24.4

Millions of yen

Profit attributable toowners of the parent

Ordinary income%

27,43828,151(% = year-on-year change)

-2.5
75.2

Millions of yen

27,44530,170

%

-9.0
75.8

Millions of yen

20,037
22,230Third quarter ended December 31, 2022: ¥45,427 million (66.1%)
Third quarter ended December 31, 2021: ¥27,354 million (9.1% decrease)
Earnings per share

For the third quarter ended
December 31, 2022
December 31, 2021

Earnings per share (diluted)
Yen

Yen

168.78182.40−−(2) Consolidated Financial Position
Total assets
December 31, 2022
March 31, 2022

Net assets

Millions of yen

Millions of yen

801,429
739,720(Reference) Equity capital

Shareholders’equity ratio

Net assets per share%

387,236
355,092

Yen

47.0
46.5

3,199.33
2,868.22

As of December 31, 2022: ¥ 376,319 million
As of March 31, 2022: ¥ 344,261 million

2. Dividends
1Q
For the year ended (or ending)
Yen
March 2022−
March 2023−
March 2023 (forecast)(Note) Revisions to the latest dividends forecast: No

2Q

Annual Dividends per Share
3Q
Fiscal year end
Yen

24.00
30.00

Yen

−
−

Yen

Annual
Yen

30.00

54.00

30.00

60.00

%

-9.9
34.3

3. Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2023
(April 1, 2022 to March 31, 2023)(% = year-on-year change)

Gross profit

Full fiscal year

Millions of yen

159,000

Operating income%

14.0

Millions of yen

38,000

Profit attributable toowners of the parent

Ordinary income%

7.8

Millions of yen

39,000%

6.9

Millions of yen

28,500Earnings per
share

%

9.9

Yen

241.35(Note) Revisions to the latest consolidated earnings forecast: No* Notes(1) Changes in major subsidiaries during the period (changes in specified subsidiaries accompanying changes in the scopeof consolidation): No
New: ― (Company name:)
Excluded: ― (Company name:)(2) Application of special accounting methods to the preparation of quarterly financial statements: Yes(Note) For details, please refer to 2. Quarterly Consolidated Financial Statements and Notes, (3) Notes Related to Quarterly Consolidated
Financial Statements (Special Accounting Treatment Applied in the Preparation of Quarterly Consolidated Financial Statements),
on P.10 of this document.

(3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
after error correctionsi.
Changes in accordance with revisions to accounting and other standards: No
ii. Changes in items other than (i) above: Noiii. Changes in accounting estimates: No
iv. Restatement of prior period financial statements after error corrections: No(4) Number of shares issued and outstanding (common stock)i.
Number of shares issued and outstanding as of the fiscal period end (including treasury stock)120,908,285 shares March 31, 2022
120,908,285 shares
December 31, 2022
ii.

iii.

Number of treasury stock as of the fiscal period end
3,283,731 shares
December 31, 2022

March 31, 2022

Average number of shares during the period
118,717,386 shares
December 31, 2022

December 31, 2021

881,767 shares

121,878,419 shares* Quarterly financial statements are not subject to quarterly review.
* Cautionary Statement with Respect to Forecasts of Consolidated Business Results
The earnings forecasts presented in this document are based upon currently available information and assumptions deemed rational. A
variety of factors could cause actual results to differ materially from forecasts.
For matters related to earnings forecasts, please refer to 1. Qualitative Information, (3) Qualitative Information Related to Consolidated
Earnings Forecasts, on P.5 of this document.

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2023

Attachments
1． Qualitative Information

2(1) Review of Business Performance2(2) Review of Financial Position

5(3) Qualitative Information Related to Consolidated Earnings Forecasts

5

2． Quarterly Consolidated Financial Statements and Notes

6(1) Quarterly Consolidated Balance Sheets

6(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income

8

Quarterly Consolidated Statements of Income
Nine-month periods ended December 31, 2022 and 2021

8

Quarterly Consolidated Statements of Comprehensive Income
Nine-month periods ended December 31, 2022 and 2021

(3) Notes Related to Quarterly Consolidated Financial Statements

910(Assumption for Going Concern)

10(Significant Fluctuations in Shareholders’ Equity)

10(Special Accounting Treatment Applied in Preparing Quarterly Consolidated Financial Statements)

10(Segment Information, etc.)

11(Significant Subsequent Events)

121

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2023

1. Qualitative Information(1) Review of Business Performancea.

General Summary of Results

While the turmoil in global logistics began resolving gradually, continued monetary tightening policies in the U.S. and othercountries during the cumulative consolidated third quarter increased the sense of caution regarding slowdowns in the global
economy.
As an overview of the regions in which our group does business, economic activity slowed in Greater China under zero-COVID
policies, and infections spread rapidly after the lifting of the policy, resulting in a weakening economy in the region. In theAmericas, consumer price inflation slowed; however, concerns remained of an economic slowdown due to rising corporate costs
caused by continued interest rate hikes, as well as reticence related to housing and capital investment. In ASEAN, both domestic
and foreign demand rose steadily due to the normalization of economic activities in the wake of relaxed activity restrictions. In
Japan, we are seeing a correction in exchange rates in response to foreign exchange intervention by the government and the Bankof Japan and revisions in monetary easing measures. However, the outlook remains uncertain due to the global economic
downturn and continued high resource prices that may depress the Japanese economy.
In this environment, earnings for the cumulative consolidated third quarter of the current fiscal year are as follows.
(Millions of yen)
Nine-month period

Nine-month period

ended
December 31, 2021

ended
December 31, 2022

Net sales

574,139695,680

121,541

21.2

Gross profit

104,107

118,476

14,369

13.8

Operating income

28,151

27,438

(713)

(2.5)

Ordinary income

30,17027,445(2,725)(9.0)

Profit before income taxes
Profit attributable to owners

31,831

27,822(4,008)(12.6)

ChangeChange (%)

22,23020,037(2,193)(9.9)
of the parent
・ Despite the weakening of the yen, operating income fell, mainly due to a decline in gross profit margin and an increase in
selling, general and administrative expenses.
・ In terms of segment performance, the Life & Healthcare segment recorded a significant increase in profit, driven by the
Prinova Group, while the Functional Materials and Mobility segments also recorded strong results. In contrast, the Advanced
Materials & Processing and Electronics & Energy segments recorded a decline in profits. For details, see b. Segment
Summary.
・ Profit attributable to owners of the parent decreased ¥2.1 billion to ¥20.0 billion, mainly due to the decrease in operating
income. Higher interest expenses resulting from an increase in borrowings stemming from an increase in working capital andhigher interest rates also contributed to this result.

2

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2023b.

Segment Summary

The following describes performance by segment.
Functional Materials(Millions of yen)
Nine-month period
ended

Nine-month period
ended

December 31, 2021

December 31, 2022

Net sales

74,41285,871

11,45815.4

Gross profit

14,721

17,183

2,461

16.7

Operating income

5,956

6,751

794

13.3

ChangeChange (%)

・ Sales increased for coating and urethane raw materials, due in part to soaring market prices and the weakening of the yen
・ Sales increased for raw materials for industrial oil solutions and resins
・ Sales increased for raw materials for the electronics industry, including semiconductor-related products
・ Operating income increased due to an increase in gross profit
Advanced Materials & Processing(Millions of yen)
Nine-month period

Nine-month period

ended
December 31, 2021

ended
December 31, 2022

Net sales

191,861

204,480

12,6196.6

Gross profit

24,53924,55313

0.1

Operating income

8,894

7,654

(1,240)(13.9)

ChangeChange (%)

・ Despite the positive impact of the weak yen on sales, profitability decreased for resin sales to the office equipment, appliance,and video game device market due to a reactionary decline stemming from increased profit ratios in connection with soaring
market conditions in the year-ago period
・ Sales trended strong in areas like dyes and additives, and resins for industrial and packaging applications
・ Sales decreased for conductive materials and digital print processing materials
・ Operating income decreased due to higher selling, general and administrative expenses
Electronics & Energy(Millions of yen)
Nine-month period
ended

Nine-month period
ended

December 31, 2021

December 31, 2022

Net sales

95,643103,826

8,183

8.6

Gross profit

22,531

23,275743

3.3

Operating income

7,945

7,287

(657)

(8.3)

ChangeChange (%)

・ Sales increased for materials related to semiconductors
・ Sales of photolithography materials for displays were slow
・ Sales of formulated epoxy resins were strong for semiconductor applications, but slow for mobile devices
・ Although gross profit increased, operating income decreased due to higher selling, general and administrative expenses

3

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2023

Mobility(Millions of yen)
Nine-month period

Nine-month period

ended
December 31, 2021

ended
December 31, 2022

Net sales

73,89096,551

22,66030.7

Gross profit

9,321

11,113

1,792

19.2

Operating income

3,109

3,797

688

22.1

ChangeChange (%)

・ Sales increased for resins due to the boosted automobile production and the weaker yen, etc.
・ Sales increased for functional materials and functional components for interior and exterior fittings and electrification
・ Operating income increased due to an increase in gross profit
Life & Healthcare(Millions of yen)
Nine-month period

Nine-month period

ended
December 31, 2021

ended
December 31, 2022

Net sales

138,150

204,886

66,73648.3

Gross profit

32,91542,214

9,299

28.3

Operating income

7,365

8,580

1,214

16.5

ChangeChange (%)

・ Prinova Group performance remained firm as a whole, due in part to particularly strong sales of food materials in the firsthalf of the year.
・ Sales increased for Hayashibara’s food materials, primarily TREHA™, while sales of cosmetics materials, primarily for
AA2G™ , decreased due to lower demand, mainly overseas
・ Sales increased for pharmaceutical raw materials and intermediates
・ Operating income increased due to an increase in gross profit
OthersNo special matters to disclose.

4

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2023

(2) Review of Financial Positiona. Assets, Liabilities and Net Assets(Millions of yen)
Prior Consolidated
Fiscal Year
(March 31, 2022)

Third Quarter,
Current Consolidated
Fiscal Year

ChangeChange (%)(December 31, 2022)

Current assets

514,286

568,21453,927

10.5

Non-current assets

225,434

233,215

7,780

3.5

Net assets

739,720

801,429

61,7088.3

Liabilities

384,628

414,192

29,563

7.7

Net assets

355,092

387,236

32,144

9.1

46.5

47.0

+ 0.5 p－Shareholders’ equity ratio (%)

・ Current assets increased mainly due to an increase in inventories and accounts receivable, despite a decrease in cash anddeposits
・ Non-current assets increased slightly due to an increase in property, plant and equipment and intangible fixed assets, despitea decrease from sales of investments in securities
・ Liabilities increased mainly due to an increase in commercial paper and accounts payable
・ Net assets increased mainly due to the recording of quarterly profit attributable to owners of the parent and an increase intranslation adjustments, despite decreases from purchases of treasury stock and payments of dividends
・ As a result, the Company recorded a shareholders’ equity ratio of 47.0%, up 0.5 points compared to 46.5% from the end of
the prior consolidated fiscal year(3) Qualitative Information Related to Consolidated Earnings Forecasts
We made no changes to the consolidated earnings forecast for the current fiscal year (April 1, 2022 to March 31, 2023) from thefigures announced on May 10, 2022. We have also made no changes to segment earnings forecasts from those announced on
November 4, 2022.

5

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2023

2. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets
Prior Consolidated Fiscal Year
(March 31, 2022)
ASSETS
Current assets
Cash and time deposits
Notes and accounts receivable
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Less allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Intangible fixed assets
Goodwill
Technology-based assets
Other
Total intangible fixed assets
Investments and other assets
Investments in securities
Long-term loans receivable
Retirement benefit asset
Deferred tax assets
Other
Less allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

6(Millions of yen)
Third Quarter, Current
Consolidated Fiscal Year
(December 31, 2022)

54,211
289,862
142,5902,401
12,533
13,935(1,248)514,286

43,956
324,014
163,578
2,521
16,594
18,792(1,243)568,21472,55475,62629,492
5,912
29,66465,07030,742
4,731
38,47073,94475,600
24
3,139
3,572
5,583
(112)
87,809225,434
739,720

71,128
17
3,393
3,540
5,662
(98)
83,644233,215
801,429NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2023

Prior Consolidated Fiscal Year
(March 31, 2022)
LIABILITIESCurrent liabilities
Notes and accounts payable
Short-term loans
Current portion of long-term loans
Commercial paper
Current portion of bonds
Accrued income taxes
Accrued bonuses for employees
Accrued bonuses for directors
Other
Total current liabilities
Long-term liabilities
Bonds
Long-term loans
Deferred tax liabilities
Retirement benefit liability
Other
Total long-term liabilities
Total liabilities
NET ASSETS
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized holding gain on securities
Deferred gain on hedges
Translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeNon-controlling interests
Total net assets
Total liabilities and net assets

7(Millions of yen)
Third Quarter, Current
Consolidated Fiscal Year
(December 31, 2022)

149,036
73,121
8,752
25,00010,000
7,100
7,648
497
26,678307,836

158,791
70,977
4,055
53,000
－
2,827
5,344
291
27,232
322,519

20,00028,244
12,31013,2382,998
76,791
384,628

30,00033,6698,920
13,3305,752
91,672
414,192

9,699
10,639280,015(1,534)
298,820

9,699
10,636292,668(6,154)
306,849

31,732
178
13,690(161)

29,11534
40,345(25)

45,441

69,46910,830355,092
739,720

10,917387,236
801,429NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2023

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive
Income(Quarterly Consolidated Statements of Income)Nine-month periods ended December 31, 2022 and 2021

(Millions of yen)

Nine-month period ended
December 31, 2021

Nine-month period ended
December 31, 2022

(April 1, 2021 – December 31, 2021)(April 1, 2022 – December 31, 2022)

574,139
470,031
104,10775,95528,151

695,680
577,204
118,476
91,03827,438

108
1,240
206
118
964
561
3,199

74
1,401
184
402
115
332
2,510

861
319
1,181
30,170

2,144
359
2,503
27,445

12
2,324

140
2,617

－

52

42

－

304
2,684

1
2,812

176
407
6
171

38
487
7
1,349

59

466

201
1,023
31,831
8,544
23,286
1,056
22,23085
2,435
27,822
7,193
20,628591
20,037

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Rent income
Equity in earnings of affiliates
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on sales of shares of subsidiaries andaffiliates
Gain on sales of investments in capital ofsubsidiaries and affiliates
Other
Total extraordinary gains
Extraordinary losses
Loss on sales of non-current assets
Loss on disposal of non-current assets
Loss on sales of investment securities
Loss on valuation of investment securities
Loss on sales of shares of subsidiaries andaffiliates
Other
Total extraordinary losses
Income before income taxes
Income taxes
Profit for the period
Profit attributable to non-controlling interests
Profit attributable to owners of the parent

8

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2023

(Quarterly Consolidated Statements of Comprehensive Income)Nine-month periods ended December 31, 2022 and 2021

(Millions of yen)
Nine-month period ended
December 31, 2021

Nine-month period ended
December 31, 2022

23,286

20,628(3,849)
(33)
7,919
(208)

(2,606)(144)
26,944
135

240

468

4,067
27,354

24,79845,42725,596
1,758

44,065
1,361(April 1, 2021 – December 31, 2021) (April 1, 2022 – December 31, 2022)

Profit for the period
Other comprehensive income
Net unrealized holding loss on securities
Deferred loss on hedges
Translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of affiliates
accounted for by the equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:Shareholders of the parent
Non-controlling interests

9

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2023

(3) Notes Related to Quarterly Consolidated Financial Statements(Assumption for Going Concern)
No matters to report.
(Significant Fluctuations in Shareholders’ Equity)
Following a resolution by the Company’s board of directors at a meeting held February 9, 2022, the Company acquired 2,401,600
shares of treasury stock in the cumulative third quarter of the current consolidated fiscal year. As a result, treasury stock increasedby ¥4,619 million, with treasury stock holdings of ¥6,154 million as of the end of the consolidated third quarter.
(Special Accounting Treatment Applied in the Preparation of Quarterly Consolidated Financial Statements)(Calculation of Tax Expenses)
Tax expenses are calculated by rationally estimating an effective tax rate after applying tax effect accounting to profit before
income taxes for the consolidated fiscal year, including the current third quarter, and multiplying profit before income taxes forthe third quarter by the estimated effective tax rate.
In the event that the calculated tax expenses using this estimated effective tax rate lead to significantly unreasonable results, thisshall be calculated by multiplying the statutory effective tax rate after adjusting significant non-temporary differences by the
profit before income taxes.
Deferred income taxes are included in income tax.

10

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2023

(Segment Information, etc.)
Segment Information
I Nine-month period ended December 31, 2021 (consolidated)
1. Information related to net sales and income (loss) by reportable segment
Reportable Segments
Advanced
Functional
Electronics &Life &
Materials &Mobility
EnergyMaterials
Healthcare
Processing

Total(Millions of yen)
Others(Note) 1

Total

Corporate Adjustments Consolidated(Note) 2(Note) 3(Note) 4

Net sales
Sales tocustomers
Intersegment
sales/transfers

74,412

191,861

95,64373,890138,150

573,958180

574,139－－

574,139

528

570

1,789

1,752

333

4,974

3,443

8,418

－

(8,418)－

Total

74,940

192,431

97,43375,643

138,483

578,933

3,624

582,557－(8,418)574,139

Segment income(loss)

5,956

8,894

7,945

3,109

7,365

33,271

139

33,411(5,517)258

28,151(Note) 1. “Others” is a business segment consisting of businesses not included in Reportable Segments, and includes information
processing services and professional services.
2. Corporate segment income (loss) represents expenses not allocated to Reportable Segments or Others.
3. Adjustments are eliminations of intersegment transactions.
4. The sum of segment income (loss) Total, Corporate, and Adjustments is equivalent to operating income as presented in“Consolidated”.

II Nine-month period ended December 31, 2022 (consolidated)
1.

Information related to net sales and income (loss) by reportable segment
Reportable Segments
Advanced
Functional
Electronics &Life &
Materials &Mobility
EnergyMaterials
Healthcare
Processing

Total(Millions of yen)
Others(Note) 1

Total

Corporate Adjustments Consolidated(Note) 2(Note) 3(Note) 4

Net sales
Sales tocustomers
Intersegment
sales/transfers

85,871

204,480

103,826

96,551

204,886

695,61664

695,680－－

695,680

692

594

3,058

1,602

369

6,317

5,427

11,744－(11,744)－

Total

86,563205,074

106,885

98,153

205,255

701,933

5,491

707,425－(11,744)695,680

Segment income(loss)

6,751

7,654

7,287

3,797

8,580

34,071

114

34,185(7,058)311

27,438(Note) 1. “Others” is a business segment consisting of businesses not included in Reportable Segments, and includes information
processing services and professional services.
2. Corporate segment income (loss) represents expenses not allocated to Reportable Segments or Others.
3. Adjustments are eliminations of intersegment transactions.
4. The sum of segment income (loss) Total, Corporate, and Adjustments is equivalent to operating income as presented in“Consolidated”.

11

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2023

(Significant Subsequent Events)(Cancellation of Treasury Stock)
At a meeting held February 8, 2023, the Company's board of directors resolved to cancel treasury stock based on the provisionsof Article 178 of the Companies Act.
a. Class of shares to be canceled

Common sharesb. Number of shares to be canceled

3,000,000 shares(Equivalent to 2.48% of outstanding shares,
including treasury stock)
February 28, 2023

c. Effective date of the cancellation*Reference: Total number of shares issued and outstanding after the cancellation

12

117,908,285 shares