Note: This document has been translated from the Japanese original for reference purposes only. In the event of any
discrepancy between this translated document and the Japanese original, the original shall prevail.

October 28, 2022

Consolidated Financial Results for the Six Months Ended September 30,
2022 (Japanese GAAP)
Company name:NIPPON FINE CHEMICAL CO., LTD.
Listing:
Tokyo
Securities Code: 4362
URL:
https://www.nipponseika.co.jp/en/
Representative:
Hiroshi Yano, Representative Director, President
Inquiries:
Yoshihiro Okura, General Manager Corporate Planning OfficeTEL:+81-6 -6231-4781
Scheduled date to file quarterly securities report:
November 11, 2022
Scheduled date to commence dividend payments:
December 1, 2022
Preparation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results meeting:Yes(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the six months ended September 30, 2022 (from April 1, 2022 toSeptember 30, 2022)(1) Consolidated operating results (cumulative)
Net sales
Six months ended
September 30, 2022
September 30, 2021

Operating profit

Millions of yen% Millions of yen

18,677
16,218

Note: Comprehensive income

15.2
12.6

2,727
2,387

Profit attributable toowners of parent

Ordinary profit% Millions of yen

14.2
26.9

2,905
2,517

% Millions of yen

15.4
26.2

1,956
1,698

%

15.2
29.1

For the six months ended September 30, 2022 ¥1,958 million [(5.6)%]
For the six months ended September 30, 2021 ¥2,074 million [(5.5)%]

Basic earnings per
share
Six months ended
September 30, 2022
September 30, 2021

(Percentages indicate year-on-year changes.)

Diluted earnings per
share

Yen

82.84
71.54

Yen

–
–

(2) Consolidated financial position
Total assets
As of
September 30, 2022
March 31, 2022
Reference:

EquityAs of September 30, 2022
As of March 31, 2022

Net assets

Equity-to-asset ratio

Millions of yen

Millions of yen

57,81654,80745,82744,560¥44,946 million¥43,732 million

%

77.7
79.8

2. Status of dividends
Annual dividends per shareFirst quarter-end

Second quarter-end

Third quarter-end

Yen

Yen

Yen

Fiscal year ended
March 31, 2022
Fiscal year ending
March 31, 2023

–

25.00

–

28.00

Fiscal year ending
March 31, 2023
(Forecast)Fiscal year-end

Total

Yen

Yen

–

29.00

54.00

–

28.00

56.00

Note: Revisions to the forecast of cash dividends most recently announced: None

3. Consolidated earnings forecasts for the year ending March 31, 2023 (from April 1, 2022 to March
31, 2023)
Net sales
Millions ofyen(Percentages indicate year-on-year changes.)
Basic
Profit attributable toOrdinary profit
earnings perowners of parent
share

Operating profit%

Millions ofyen%Millions ofyenFull year
37,400
11.8
5,200
6.5
5,550
Note: Revisions to the earnings forecasts most recently announced: Yes%

Millions of
yen

%

Yen

8.2

3,750

8.0

158.69

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in thechange in scope of consolidation): None
Newly included: - (company name) Excluded: - (company name)(2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial
statements: None
(3) Changes in accounting policies, changes in accounting estimates, and restatement(i) Changes in accounting policies due to revisions to accounting standards, etc.: None(ii) Changes in accounting policies other than (i): Yes(iii) Changes in accounting estimates: Yes(iv) Restatement: None
Note: For details, please refer to the attached document on page 8 “2. Quarterly consolidated
financial statements and main notes (4) Notes to quarterly consolidated financial statements(Changes in accounting policies that are difficult to distinguish from changes in accounting
estimates).”(4) Number of issued shares (common shares)(i) Total number of issued shares at the end of the period (including treasury shares)
As of September 30, 2022

25,372,447 shares

As of March 31, 2022

25,372,447 shares(ii) Number of treasury shares at the end of the period
As of September 30, 2022

1,741,854 shares

As of March 31, 2022

1,756,940 shares(iii) Average number of shares outstanding during the period (cumulative from the beginning of the
fiscal year)
Six months ended September 30, 2022

23,621,814 shares

Six months ended September 30, 2021

23,746,773 shares* Quarterly financial results reports are exempt from quarterly review conducted by certified public
accountants or an audit corporation.
* Proper use of earnings forecasts, and other special matters
The forward-looking statements of the earnings outlook, etc. described in this document are based on theinformation currently obtained by the Company and certain assumptions that it deems reasonable, andare not intended to promise the achievement of such information. In addition, actual business results may
differ significantly due to various factors. Please refer to page 3 of the attached materials “1. Qualitative
information on financial results for the period under review (3) Explanation of consolidated earnings
forecasts and other forward-looking statements” for the conditions that are the premise of the earnings
forecasts and cautions when using the earnings forecasts.
The Company plans to hold a briefing session for institutional investors and analysts on Monday,
November 14, 2022. The financial results presentation materials to be distributed at this briefing session
will be posted on the Company’s website on the same day.

NIPPON FINE CHEMICAL CO., LTD. (4362)○ Table of contents of attached materials
Index
1. Qualitative information on financial results for the period under review ................................................. 2(1) Explanation of operating results ......................................................................................................... 2(2) Explanation of financial position........................................................................................................ 2(3) Explanation of consolidated earnings forecasts and other forward-looking statements ..................... 3
2. Quarterly consolidated financial statements and main notes .................................................................... 4(1) Quarterly consolidated balance sheet ................................................................................................. 4(2) Quarterly consolidated statement of income and comprehensive income (cumulative) .................... 6(3) Quarterly consolidated statement of cash flows ................................................................................. 7(4) Notes to quarterly consolidated financial statements ......................................................................... 8(Notes on premise of going concern) ................................................................................................. 8(Notes when there are significant changes in amounts of shareholders’ equity) ................................ 8(Changes in accounting policies that are difficult to distinguish from changes in accounting
estimates) ............................................................................................................................................ 8(Segment information) ....................................................................................................................... 9-1-

NIPPON FINE CHEMICAL CO., LTD. (4362)

1. Qualitative information on financial results for the period under review(1) Explanation of operating results
During the six months ended September 30, 2022, COVID-19 case numbers rose temporarily due to theseventh wave of infections, but economic activities headed towards normalization thanks toprogressing vaccinations. Moreover, despite the rapid depreciation of the yen and the rise of raw
material prices due to increasing resource prices, corporate earnings were overall on an upward trend
and the gradual recovery continued. However, the increased cost of living due to the further
depreciation of the yen, concerns over downturns in the economies of the United States and China, theintensification of the situation in Ukraine, and the impact of the reemergence of COVID-19, among
other factors, mean that the outlook remains uncertain.
In this business environment, the Group has been working to further strengthen its management baseand develop products that contribute to the expansion of earnings and expand sales.
As a result, net sales for the first six months of the fiscal year under review increased to ¥18,677
million (up 15.2% year-on-year). In terms of profit, operating profit was ¥2,727 million (up 14.2%
year-on-year), and ordinary profit was ¥2,905 million (up 15.4% year-on-year). Profit attributable toowners of parent was ¥1,956 million (up 15.2% year-on-year).
Operating results for each segment are as follows.
(i) Industrial products businessIn this segment, the background was characterized by a gradual domestic and overseas economic
recovery. By business field, in the cosmetic ingredients business, sales grew due to cosmetic
ingredients newly used in products by customers and the gradual domestic and overseas recovery inthe cosmetics market. Moreover, in part due to an increase in export prices due to yen depreciation
as well as passing on surging import raw materials costs in sales prices, net sales of cosmetic
ingredients and lanolin and cholesterol increased. In the fine chemicals business, net sales
increased as we passed on surging raw material prices for fatty acid amides to our sales prices. As aresult, net sales was ¥13,944 million (up 21.8% year-on-year). Segment profit (operating profit)
was ¥2,139 million (up 19.3% year-on-year) due to increased quantities of cosmetic ingredients andimprovements in merchandise category composition, as well as positive effects of the yen
depreciation.
(ii) Household products businessIn this segment, despite a temporary rise in COVID-19 case numbers due to the seventh wave of
infections, sales in the environmental hygiene field decreased as COVID-19 case numbers fell with
progressing vaccinations and corporate demand for infection-control products declined. As a result,net sales was ¥4,043 million (down 5.1% year-on-year) and segment profit (operating profit) was¥367 million (down 17.0% year-on-year).
(iii) Other
Net sales of other businesses was ¥689 million (up 34.9% year-on-year) and segment profit(operating profit) was ¥220 million (up 46.1% year-on-year).
(2) Explanation of financial position
Total assets at the end of the second quarter of the fiscal year under review increased by ¥3,009 million
from the end of the previous fiscal year (hereinafter referred to as “the previous fiscal year-end”) to¥57,816 million. This was mainly due to an increase in current assets by ¥1,709 million due mainly to-2-

NIPPON FINE CHEMICAL CO., LTD. (4362)

an increase in raw materials and supplies, and a ¥1,299 million increase in non-current assets due to anincrease in buildings and structures.
Liabilities at the end of the second quarter of the fiscal year under review increased by ¥1,742 million
from the previous fiscal year-end to ¥11,989 million. This was mainly due to an increase in current
liabilities by ¥1,866 million, mainly due to an increase in accounts payable - facilities, while noncurrent liabilities decreased by ¥123 million, mainly due to a decrease in provision for environmental
measures.
The net assets at the end of the second quarter of the fiscal year under review increased by ¥1,266
million from the previous fiscal year-end to ¥45,827 million. This was mainly due to an increase inshareholders’ equity by ¥1,301 million, due to recording ¥1,956 million in profit attributable to ownersof parent and ¥684 million in dividends paid, while accumulated other comprehensive income
decreased by ¥87 million, mainly due to a decrease in valuation difference on available-for-salesecurities.
(3) Explanation of consolidated earnings forecasts and other forward-looking statements
We revised the consolidated earnings forecasts for the year ending March 31, 2023 from the forecasts
announced on April 28, 2022, due to the strong business performance in the industrial products
business segment as of the second quarter. The main exchange rates used in the earnings forecasts are¥130 per US$ and ¥135 per EUR.
Earnings forecasts are created based on information available at the time, and actual performance mayvary from forecasted values due to a variety of future factors.

-3-

NIPPON FINE CHEMICAL CO., LTD. (4362)

2. Quarterly consolidated financial statements and main notes(1) Quarterly consolidated balance sheet(Thousands of yen)Previous fiscal year
(As of March 31, 2022)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
LandConstruction in progress
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Retirement benefit asset
Other
Total investments and other assets
Total non-current assets
Total assets-4-

Current second quarter(As of September 30, 2022)

12,862,645
8,703,595
3,087,092
2,116,475
3,216,976
239,580(2,095)30,224,271

12,013,730
9,239,992
3,282,540
2,231,913
4,242,096
924,166(191)
31,934,247

3,505,334
1,315,673
3,644,767
3,775,146
532,008
12,772,930
307,314

6,905,666
1,353,141
3,645,367
1,695,365
643,332
14,242,873
476,962

11,205,190
26,889271,010
11,503,089
24,583,335
54,807,607

10,844,506
56,667
261,740
11,162,915
25,882,751
57,816,998

NIPPON FINE CHEMICAL CO., LTD. (4362)(Thousands of yen)

Liabilities
Current liabilities
Notes and accounts payable - trade
Accounts payable - other
Income taxes payable
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Provision for environmental measures
Accounts payable - facilities
Other
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Provision for environmental measures
Retirement benefit liability
Long-term accounts payable - other
Long-term guarantee deposits
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets-5-Previous fiscal year
(As of March 31, 2022)

Current second quarter(As of September 30, 2022)

3,928,700
757,375
985,079
778,695

3,916,638
739,918
746,473809,200

92,25955,416

61,332362,000
646,323
7,611,766

117,223
2,422,308
671,118
9,478,296

2,267,152
117,223
111,707
15,600103,2369,430
11,0772,635,427
10,247,193

2,215,467–
136,073
15,600103,619
9,430
31,3822,511,572
11,989,869

5,933,221
6,803,377
25,790,799(1,296,698)
37,230,699

5,933,221
6,821,920
27,062,821(1,285,614)
38,532,349

5,784,914
34,721
675,778
6,154
6,501,567
828,145
44,560,413
54,807,607

5,561,294
27,591
819,488
5,615
6,413,990
880,789
45,827,129
57,816,998

NIPPON FINE CHEMICAL CO., LTD. (4362)(2) Quarterly consolidated statement of income and comprehensive income (cumulative)(Thousands of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Miscellaneous losses
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on sale of investment securities
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable toProfit attributable to owners of parent
Profit attributable to non-controlling interests
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests-6-

Previous second quarter(Cumulative)(From April 1, 2021
to September 30, 2021)
16,218,857
11,203,949
5,014,908
2,627,281
2,387,626

Current second quarter(Cumulative)(From April 1, 2022
to September 30, 2022)
18,677,377
13,047,874
5,629,502
2,901,725
2,727,777

3,758
122,339–
16,774
142,872

6,407
149,120764
22,931
179,223567
11,89758
12,5232,517,976

645
–
1,227
1,872
2,905,128

226
226

2,247
2,247

44,992–
44,992
2,473,210
728,299
1,437
729,736
1,743,473

11,454
13,88925,3432,882,032
830,015
49,945879,960
2,002,072

1,698,997
44,475

1,956,872
45,200254,085(8,451)
88,492(3,182)
330,9432,074,416(223,619)(7,921)
188,787(538)(43,291)
1,958,780

2,009,623

1,869,295

64,79389,485NIPPON FINE CHEMICAL CO., LTD. (4362)(3) Quarterly consolidated statement of cash flows(Thousands of yen)Previous second quarter(Cumulative)(From April 1, 2021
to September 30, 2021)
Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in retirement benefit liability
Decrease (increase) in retirement benefit asset
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) on sale of investment securities
Loss (gain) on sale and retirement of property, plant andequipment
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in guarantee deposits received
Increase (decrease) in trade payables
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sale of investment securities
Net cash provided by (used in) investing activities
Cash flows from financing activities
Repayments of lease liabilities
Dividends paid
Dividends paid to non-controlling interests
Purchase of treasury shares
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period-7-

Current second quarter(Cumulative)(From April 1, 2022
to September 30, 2022)

2,473,210
509,222(50)(10,275)(4,373)(126,098)
567
(765)
–

2,882,032
445,586(1,903)24,365(29,778)(155,527)
645(11,792)
13,88944,765

9,206(169,100)(983,359)
1,179(141,893)(144,082)
1,448,946
126,098(567)(770,608)
803,869(506,876)(1,309,725)
382
48,147(241,632)
1,167,019
155,527(645)(1,063,208)
258,693–(641,323)
389(13,446)(792)–(655,173)

101,450(452,295)
2,600(84,778)(804)
25,125(408,703)(2,539)(439,315)(37,435)(346)–(479,637)(3,968)(684,849)(36,841)(76)
47(725,688)

20,85747,882(310,084)
13,187,098
12,877,014(827,815)
11,410,777
10,582,961

NIPPON FINE CHEMICAL CO., LTD. (4362)(4) Notes to quarterly consolidated financial statements(Notes on premise of going concern)
Not applicable.
(Notes when there are significant changes in amounts of shareholders’ equity)
Not applicable.
(Changes in accounting policies that are difficult to distinguish from changes in accounting
estimates)
Change in the depreciation method for property, plant and equipment
The Company and its domestic consolidated subsidiaries had used the declining balance method as thedepreciation method for property, plant and equipment (however, the straight-line method had been used
for buildings acquired on or after April 1, 1998 [excluding facilities attached to buildings] and forfacilities attached to buildings and structures acquired on or after April 1, 2016), but this has beenchanged to the straight-line method from the first quarter of the fiscal year under review.
In the stable business environment of recent years, the Group secured stable earnings while updating andrepairing facilities. However, with expectations for large growth in the nanomedicine field, which uses
phospholipids for pharmaceuticals, we have positioned this field as a growth pillar and decided on a
specific capital investment plan based on our Medium-term Management Plan (announced in April 2018).
Using this decision as an opportunity, as we will continue to pursue aggressive capital investment, wehave reevaluated how we use the Group’s property, plant and equipment.
As a result of this evaluation, given the reality of the Group’s product demand, we expect the Group’s
property, plant and equipment to operate mostly stably over the long term and for construction and real
operations to begin steadily for the above capital investment projects in the fiscal year under review(fiscal year ending March 31, 2023). As such, from the fiscal year under review, we believe that using
the straight-line method as the depreciation method for property, plant and equipment is reasonable fromthe standpoint of expense allocation. We also believe that it is more appropriate in reflecting the realityof business in terms of managing the Group’s performance, and have made the decision to change to thestraight-line method.
As a result of this change, operating profit, ordinary profit and profit before income taxes for the first six
months of the fiscal year under review increased by ¥73,655 thousand each, compared with the casewhere the previous method is used.

-8-

NIPPON FINE CHEMICAL CO., LTD. (4362)(Segment information)[Segment information]
I.

Previous second quarter (Cumulative) (From April 1, 2021 to September 30, 2021)
1. Information on net sales and profits or losses for each reporting segment, and information on
the decomposition of profits
Reporting segment

Other
Note: 1(Thousands of yen)
Quarterly
consolidated
statement of
Adjustment
income andamountcomprehensive income
amounts
Note: 2

Industrial
products
business

Householdproducts
business

Total

11,445,992

4,261,955

15,707,947

354,054

16,062,001–

16,062,001

–

–

–

156,856

156,856–

156,856

11,445,992

4,261,955

15,707,947

510,910

16,218,857–

16,218,857

77,101

25,421

102,522

22,149124,671(124,671)

–

Total

11,523,093

4,287,376

15,810,469

533,059

16,343,529(124,671)

16,218,857

Segment profit

1,793,713

442,8312,236,544

151,082

2,387,626–

2,387,626

Net sales
Revenue from contracts
with customers
Other revenue
Revenues from externalcustomers
Intersegment sales ortransfers

Total

Notes: 1. The “Other” segment is a business segment that is not included in the reporting segment, and includes the realestate business and the business of entrusting pharmacology and safety tests.
2. Segment profit is consistent with the operating profit in the quarterly consolidated statement of income andcomprehensive income.

-9-

NIPPON FINE CHEMICAL CO., LTD. (4362)

II. Current second quarter (Cumulative) (From April 1, 2022 to September 30, 2022)
1. Information on net sales and profits or losses for each reporting segment, and information on
the decomposition of profits
Reporting segment

Other
Note: 1(Thousands of yen)
Quarterly
consolidated
statement of
Adjustment
income andamountcomprehensive income
amounts
Note: 2

Industrial
products
business

Householdproducts
business

Total

13,944,941

4,043,184

17,988,126

531,608

18,519,734–

18,519,734

–

–

–

157,642

157,642–

157,642

13,944,941

4,043,184

17,988,126

689,251

18,677,377–

18,677,377

141,479

16,467

157,946

20,804

178,751(178,751)

–

Total

14,086,420

4,059,651

18,146,072

710,055

18,856,128(178,751)

18,677,377

Segment profit

2,139,357

367,7632,507,121

220,656

2,727,777–

2,727,777

Net sales
Revenue from contracts
with customers
Other revenue
Revenues from externalcustomers
Intersegment sales ortransfers

Total

Notes: 1. The “Other” segment is a business segment that is not included in the reporting segment, and includes the realestate business and the business of entrusting pharmacology and safety tests.
2. Segment profit is consistent with the operating profit in the quarterly consolidated statement of income andcomprehensive income.

2. Disclosure of changes, etc. in reportable segments
Change in the depreciation method for property, plant and equipment
As provided in “Changes in accounting policies that are difficult to distinguish from changes inaccounting estimates,” the Company and its domestic consolidated subsidiaries had used thedeclining balance method as the depreciation method for property, plant and equipment (however,the straight-line method had been used for buildings acquired on or after April 1, 1998 [excluding
facilities attached to buildings] and for facilities attached to buildings and structures acquired on orafter April 1, 2016), but this has been changed to the straight-line method from the first quarter ofthe fiscal year under review.
As a result of this change, compared to the previous method, segment profit for the first six monthsof the fiscal year under review increased by ¥60,484 thousand for the industrial products business,¥3,256 thousand for the household products business, and ¥9,914 thousand for the other business.

- 10 -