FYE March 2023
Third Quarter
Financial Highlights
NAGASE&CO.,LTD.
February 8, 2023

Copyright © 2023 NAGASE & CO., LTD.

Contents■ Consolidated Statements Income

P3■ Gross Profit by Region

P4■ Gross Profit by Business & Segment

P5■ Operating Income by Business & Segment

P6■ Segment Operating Income Overview

P7～P11■ State of Major Manufacturing Subsidiaries

P12■ Consolidated Balance Sheets

P13■ FYE March 2023 Earnings Projection■ Shareholder Returns

Copyright © 2023 NAGASE & CO., LTD.

P14～P15
P16

Consolidated statements income▶ Gross profit
・ Overall profit increased, despite lower gross profit margin due to lower profitability at certain manufacturing subsidiaries, etc.
▶ Operating income
・ Profit decreased due to an increase in selling, general and administrative expenses in connection with higher distribution costs andincreased activities▶ Profit Attributable to owners of the parent
・ Income decreased due to the decrease in ordinary income stemming from higher interest expenses, etc.

100 millions of yen

21/12

22/12

ChangeVs.PY

ForecastAchievement

Sales

5,741

6,956+ 1,215

121%ーーGross profit

1,041

1,184+ 143114%

1,59075%<GP ratio>

18.1%

17.0%

(1.1pt)－ー－

SG&A expenses

759

910

+ 150

120%

1,210－

281

274(7)

97%

38072%

301274(27)

91%

390

70%

222200(21)

90%

285

70%

@ 111.1@ 136.5@ 25.4 Weak yen@140.0@ 17.3@ 19.9@ 2.6 Weak yen@20.0

OperatingincomeOrdinary
incomeProfit Attributableto owners of theparent
US$ Exchange rate
(period average)
RMB Exchange rate
(period average)※ Offset to sales and cost of sales from revenue recognition standards: December 2021, -¥181.7 billion; December 2022, -¥203.8 billion※ Impact from foreign exchange: Gross profit, +¥9.6 billion; Operating income, +¥2.6 billion

Copyright © 2023 NAGASE & CO., LTD.

3

Gross Profit By Region▶ Higher profit both domestic and overseas▶ Profit increased due to higher sales of raw materials and materials to the semiconductor industry in Japan and overseas▶ Profit increased significantly in the Americas and Europe due to expansion in the Prinova Group businesses▶ Profit increased in Greater China, despite the lockdowns, due to the weaker yen

Overseas gross profit By Region(100 millions of yen)Domestic & Overseas Gross profit(100 millions of yen)

Total 644
Total 1,184

1,200
Total 1,041
1,000

800

600

Overseas644

Europe84600
90%
Total 502

Overseas502

Overseasgross profit
ratio
48.3%

100%

80%
Overseasgross profit
ratio
54.4%

500
Europe
59

70%
400
60%
50%

30%
Domestic
538

Domestic
540

200

10010%00%
21/12

22/12

Americas
254

300

20%

200

Other
8

Americas
174

40%
400

Other
10

ASEAN
93

ASEAN
112

Greater
China
166

GreaterChina
180

21/1222/120※Domestic figures under Domestic & Overseas Gross Profit include inter-regional adjustments
Copyright © 2023 NAGASE & CO., LTD.

4

Gross Profit By Business & Segment▶ General increase in sales in Functional Materials, including sales of coating and urethane raw materials, as well as sales of raw
materials for semiconductor-related products and other electronics industry products▶ Advanced Materials & Processing performance remained unchanged due to the weaker yen, even while profitability decreased due tolower sales volume for resins and a reactionary decline from higher profit margins year on year due to soaring market prices▶ Electronics & Energy sales increased for materials used in semiconductors▶ Life & Healthcare recorded an increase in food ingredients business in the Prinova Group
Change in Gross Profit By Segment (100 millions of yen)

Gross Profit By Business & Segment (100 millions of yen)
Total 1,184

1,200
Total 1,041

900

Manufacturing408

Total 1,041
Manufacturing473

Life &Healthcare
329

Mobility
93600
Electronics &Energy
225

300

Trading &
Other
633

Life & Healthcare
92

Total 1,184

Trading &Other710

Advanced
Materials &Processing
0

Mobility
111

Advanced
Materials& Processing
245

22/12

2１/12
Electronics &Energy
232

Advanced
Materials& Processing
245
Functional
Materials
171

By Business

By Business

By Segment

By Segment

21/12

22/12

21/12

22/12

Copyright © 2023 NAGASE & CO., LTD.

1,041

History of Gross Profit(100 millions of yen)399
400

Functional
Materials
147

0Life &Healthcare
422

Corporate&Others
0Electronics Mobility
17& Energy
7

Functional
Materials
24

1,184

345

394

390
353

341

353

300
200
100001Q

2Q
22/03

3Q

4Q

23/03

5Operating Income by Business & Segment▶ Profit decreased overall due to an increase in selling, general and administrative expenses in connection with higher distribution costs
and increased activities▶ Advanced Materials & Processing recorded lower profit, partly due to a reactionary decline from the stemming from increased profit
ratios in connection with soaring market conditions in the year-ago period, as well as higher selling, general and administrativeexpenses▶ Life & Healthcare profit increased especially due to strong performance of food ingredients sales in the Prinova Group▶ We continue to invest for sustainable future growth, including in DX-related areas
Operating Income by Business & Segment(100 millions of yen)Total 281

300240Total 281

Manufacturing
93

Total 274

Manufacturing81

Life &Healthcare
73

Total 274
Functional
Materials
7Life &Healthcare
85Life & Healthcare
12281
Mobility
6

Mobility
31
Electronics &Energy
79

180

Change in Operating Income By Segment (100 millions of yen)

Mobility37

274

Advanced
Materials &Processing(12)
Electronics& Energy(6)Electronics &Energy
72

Corporate&Others
(15)

2１/12
120
Trading &Other
187

Trading &Other
193

Advanced
Materials& Processing
88

Advanced
Materials& Processing
76

Functional
Materials
59

Functional
Materials
67

Coporate&Others(51)

Coporate&Others
(66)

120

By Segment
21/12

By Segment
22/12

10897

97908675

807160400(60)

History of Operating Income(100 millions of yen)

10060

22/12

By Business
21/12

By Business
22/12

Copyright © 2023 NAGASE & CO., LTD.

2000１Q

２Q
22/03

３Q

４Q

23/03

6

Functional Materials Segment Operating Income Overview▶ Sales of coating and urethane raw materials for the automobile and other industries increased, due in part to soaring market prices
and the weaker yen▶ Sales increased for raw materials for semiconductor-related products and other electronics industry products, as did sales of raw
materials for industrial oil solutions and plastic materials▶ Performance remained strong overall, and profit increased year on year

History of operating income （100 millions of yen）

Operating income by business（100 millions of yen）
Total 67

60

Total 59

2523

Manufacturing
7

Manufacturing
922
21
2020

1918

18

45
1530
Trading &Other50

Trading &Other
60

1015

5

0

00
21/12

22/12

１Q

２Q
22/03

Copyright © 2023 NAGASE & CO., LTD.

３Q

４Q

23/03

7

Advanced Materials & Processing Segment Operating Income Overview▶ Despite the impact of the weak yen on resin sales to the office equipment, appliance, and video game device market, profitability
decreased due to a reactionary decline stemming from increased profit ratios in connection with soaring market conditionsin the year-ago period▶ Sales of digital print processing materials continued to be weak in manufacturing businesses▶ Profit was lower year on year due to a decrease in resin sales, lower profitability in manufacturing businesses, and an increase in
selling, general and administrative expenses
Operating income by business（100 millions of yen）

History of operating income （100 millions of yen）

Total 88
Manufacturing
378

32
31
Total 76302625242458
1938

Trading &Other85

Trading &Other
78

1518
Manufacturing
(1)
0-2

0
21/12

22/12

１Q

２Q
22/03

Copyright © 2023 NAGASE & CO., LTD.

３Q

４Q

23/03

8

Eｌectronics & Energy Segment Operating Income Overview▶ Sales increased for materials for semiconductors▶ Sales of formulated epoxy resins was strong for semiconductor applications, but slow for mobile devices▶ Profit decreased year on year due to the significant impact of weak sales in manufacturing businesses in connection with formulated
epoxy resin-related products for mobile devices

History of operating income （100 millions of yen）

Operating income by business（100 millions of yen）
80

30

Total 79

29Total 72
Manufacturing27

26
25

Manufacturing
1325
24
2360

21
2040

Trading &Other
52

Trading &Other
59

1020

0
00
21/12

22/12

１Q

２Q

３Q
22/03

Copyright © 2023 NAGASE & CO., LTD.

４Q

23/03

9Mobility Segment Operating Income Overview▶ Sales increased for resins, mainly due to an increase in automobile production and the impact of the weakening yen▶ Sales increased in functional materials and functional components for interior and exterior fittings and electrification▶ Profit increased year on year due to generally strong sales

History of operating income （100 millions of yen）

Operating income by business（100 millions of yen）
40
Total 37

16151413

Total 3130

1211101010920
Trading &Other
31

Trading &Other
37

98610

4

200
21/12

22/12

0１Q

２Q
22/03

Copyright © 2023 NAGASE & CO., LTD.

３Q

４Q

23/03

10Life & Healthcare Segment Operating Income Overview▶ Prinova Group sales of food ingredients were particularly strong in the first quarter, and remained strong overall in the second quarterand later, despite some adjustments in supply and demand▶ Prinova Group manufacturing and processing business profitability declined due to increased costs associated with the start up of anew plant▶ Hayashibara ｓales of food ingredients (mainly TREHATM) increased; however, sales of cosmetics materials (mainly AA2GTM) decreased
due to lower demand overseas and other factors▶ Profit Increased year on year due to Prinova Group profit growth
History of operating income （100 millions of yen）

Operating income by business（100 millions of yen）
Total 85

414080Total 73

3060

Manufacturing
54

27

Manufacturing
63

25
23

20

40

20

20

10
Trading &Other
19

22
18

Trading &Other
22
000
21/12

Copyright © 2023 NAGASE & CO., LTD.

22/12

１Q

２Q
22/03

３Q
23/03

４Q

11

State of Major Manufacturing Subsidiaries▶ Nagase ChemteX: Lower profit, despite strong semiconductor-related sales, due to weak sales of formulated epoxy resins for use inmobile devices▶ Hayashibara: Lower profit due to lower sales of cosmetic material AA2GTM and lower profitability of food material TREHATM, stemmingfrom higher raw materials and energy prices▶ Prinova Group: Higher profit due to ongoing strong materials sales, even as manufacturing and processing business profitability
declined due in part to costs associated with the start up of a new plant

100 millions of yen

21/12
Nagase ChemteX
Corporation

Prinova Group

Copyright © 2023 NAGASE & CO., LTD.

ChangeVs.PY

Sales

221

195(25)88%

Gross profit

6952(16)76%

Operating income3213(19)41%

20021211106%

Gross profit

8179(2)98%

Operating income3429(4)

86%

Goodwill amortization etc.

2323-100%

Operating income after
amortization burden

116(4)

59%

Sales

857

1,453

596

169%

Gross profit

160

242

82152%

Operating income

55

7015128%

Goodwill amortization etc.

14172118%

Operating income after
amortization burden

4053

12132%

Sales

HayashibaraCo.,Ltd.

22/1212Consolidated Balance Sheets▶ Current assets: Working capital remained high due to strong overall sales, but inventories peaked at the end of September 2022
▶ Net assets: Increase, despite dividend payments and share buyback, due to profit for the period and an increase in foreign currencytranslation adjustments due to the weaker yen▶ NET D/E ratio: Increased to 0.40 times due to an increase in interest-bearing debt resulting from higher demand for cash inconnection with an increase in working capital

100 millions of yen

22/03

22/12

ChangeDetailesTotal Current Assets

5,142

5,682

539

(Cash&deposits)

542

439

(102)

(Trade account receivbable)

2,898

3,240

341

(Inventories)

1,575

1,826

251

2,254

2,332

77

756711(44)Total assets

7,397

8,014

617

Current Liab.

3,078

3,225

146

1,490

1,587

97767

916

Total Liab.

3,846

4,141

295

Shareholders' equity

2,988

3,068

80

Accum. Other Comprehensive Income

454

694

240

Non-controlling interest

108

109

0

Total net assets

3,550

3,872

321

Working capital

2,983

3,479

495

Shareholders' equity ratio

46.5%

47.0%

0.5%

0.33

0.40

0.07

Total non-current assets(Investments in security)(Trade account payable)
Non-current Liab.

NET D/E ratio

Copyright © 2023 NAGASE & CO., LTD.

Short-term loans/CP+258,
Current Portion of Bonds(100)148 Corporate Bonds+100

Translation adjustment+266,
Appraisal Loss on Investment Securities(26)13

FYE March 2023 Earnings Projection (No Change)▶ We reviewed full-year forecasts and rate assumptions at the time of our second quarter earnings announcement, but we did not makeany revisions for the third quarter▶ In addition to crude oil prices and related chemical market conditions, we expect utility costs such as electricity and gas to remain high▶ Formulated epoxy resin sales declined due to lower demand for mobile devices, and we do not expect performance to recover for thefull year
▶ The automotive-related business remained strong as a whole, but Prinova Group performance is slowing due to economic sluggishness,and certain semiconductor-related products are entering an adjustment phase▶ While the business environment remains uncertain and challenging, we will continue to aim for a second consecutive year of record
profits
100 millions of yen

22/03
Actual23/03
Forecast

ChangeVs.PY

Gross profit

1,394

1,590

195

114%

SG&A expenses

1,042

1,210

167

116%

Operating income352

38027108%

Ordinary income

364

390

25107%

Profit attributable toowners of the parent

259

285

25110%

US$ Exchange rate
(period average)@ 112.4@ 140.0

RMB Exchange rate
(period average)@ 17.5@ 20.0※Impact on operating income of 1 yen change in exchange rate: US$ approx. 100 million yen, RMB approx. 400 million yen

Copyright © 2023 NAGASE & CO., LTD.

14

FYE March 2023 Earnings Projection By segment (No Change)▶ We modified our breakdown of segment profits at the time of our second quarter earnings announcement, but we did not make any
revisions for the third quarter▶ With the yen strengthening more than expected in the second quarter, we expect foreign exchange effects to have a negative impact
on profits, mainly in Life & Healthcare, of which the Prinova Group is a consolidated entity▶ We expect Functional Materials and Mobility sales to remain strong overall▶ We expect sales of formulated epoxy resin sales for mobile devices in Electronics & Energy to be sluggish, while certain
semiconductor-related products are entering an adjustment phase▶ Life & Healthcare slowed due to lower profitability in manufacturing businesses caused by higher labor costs in the Prinova Group andsoftening market conditions caused by the economic slowdown▶ The business environment remains uncertain and challenging despite some differences among businesses, we aim to achieve record-high profits for a second consecutive fiscal year

100 millions of yen

22/03 Actual
Functional Materials

23/03 Forecast(22/09 Revised)

ChangeVs.PY

Gross profit

198

229

30116%

Operating income

7895

16121%

Advanced Materials& Processing

Gross profit

323

330

6102%

Operating income

108105(3)97%Electronics& Energy

Gross profit

297

310

12104%

Operating income

1021030100%

Gross profit

127

149

21117%

4155

13133%

447

571

123

128%

94117

22124%

11(0)

84%

(72)

(95)

(22)

ー1,394

1,590

195

114%

352

380

27108%

MobilityLife & Healthcare
Corporate&Others
Total

Copyright © 2023 NAGASE & CO., LTD.

Operating income
Gross profit
Operating income
Gross profit
Operating income
Gross profit
Operating income

15

Shareholder Returns▶ We plan to pay an interim dividend of ¥30 per share and a year-end dividend of ¥30 per share for an annual dividend of ¥60 per sharefor fiscal 2022 (expected 13th consecutive fiscal year of dividend increases)▶ The repurchase of ¥6 billion in treasury stock, resolved in February 2022, is on schedule(The cumulative total to ¥5.5 billion as of December 31, 2022)

Total Dividend

Stock buy-backTotal Payout ratio%

51.0

millions of yen

48.3

50.0

15,00042.4
12,52039.5
12,000

35.6
33.7

36.0

12,085

40.0

35.2

33.0

30.5
6,006

9,000
6,799
6,000

5,269
3,811

3,557

4,064

7,186
5,456

952

5,023

5,230

5,456

5,691

20.0

1,107

3,000

6,514

7,044

3,557

3,811

4,064

4,162

14/03

15/03

16/03

17/03

18/03

19/03

20/03

21/03

22/03

23/03
（Forecast）

¥２8

¥30

¥32

¥33

¥40

¥42

¥44

¥46

¥54

¥60

10.0

0.0

0

Dividend pershare

30.0

6,643

1,956

1,776

5,041

※ 2３/03 year-end dividend to be submitted for approval to the 108th general meeting of shareholders scheduled for June 202３.

Copyright © 2023 NAGASE & CO., LTD.

16

https://www.nagase.co.jp/english/

These presentation materials contain projections based on forward-looking
assumptions, forecasts, and plans as of February 8, 2023.
Actual earnings may differ from projections due to risks and uncertainties in
the future global economy, competitive landscape, currency exchange rates,
etc.

Copyright © 2023 NAGASE & CO., LTD.