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.

January 30, 2023

Consolidated Financial Results for the Nine Months Ended December 31,
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:
February 13, 2023
Scheduled date to commence dividend payments:–
Preparation of supplementary material on quarterly financial results: None
Holding of quarterly financial results meeting:
None(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the nine months ended December 31, 2022 (from April 1, 2022
to December 31, 2022)(1) Consolidated operating results (cumulative)
Net sales
Nine months ended
December 31, 2022
December 31, 2021

Operating profit

Millions of yen% Millions of yen

27,762
24,789Note: Comprehensive income

12.0
10.7

4,117
3,756

Profit attributable toowners of parent

Ordinary profit% Millions of yen

9.6
25.6

4,413
3,980

% Millions of yen

10.9
24.9

3,152
2,682

%

17.5
9.5

For the nine months ended December 31, 2022 ¥3,294 million [29.5%]
For the nine months ended December 31, 2021 ¥2,543 million[(39.7)%]

Basic earnings per
share
Nine months ended
December 31, 2022
December 31, 2021

(Percentages indicate year-on-year changes.)

Diluted earnings per
share

Yen

133.69112.96Yen––(2) Consolidated financial position
Total assets
As ofDecember 31, 2022
March 31, 2022
Reference:

EquityAs of December 31, 2022
As of March 31, 2022

Net assets

Equity-to-asset ratio

Millions of yen

Millions of yen

56,31454,80744,61644,560¥43,769 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-end

Fiscal year ending
March 31, 2023
(Forecast)

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: None%

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
(4) Number of issued shares (common shares)(i) Total number of issued shares at the end of the period (including treasury shares)
As of December 31, 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 December 31, 2022

2,561,727 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)
Nine months ended December 31, 2022

23,578,535 shares

Nine months ended December 31, 2021

23,746,722 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.

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) Notes to quarterly consolidated financial statements ......................................................................... 7(Notes on premise of going concern) ................................................................................................. 7(Notes when there are significant changes in amounts of shareholders’ equity) ................................ 7(Changes in accounting policies that are difficult to distinguish from changes in accounting
estimates) ............................................................................................................................................ 7(Segment information) ....................................................................................................................... 8-1-

NIPPON FINE CHEMICAL CO., LTD. (4362)

1. Qualitative information on financial results for the period under review(1) Explanation of operating results
In the Japanese economy during the nine months ended December 31, 2022, COVID-19 case numbers
were on the rise, but economic activities headed towards normalization as New Normal lifestyles
during the COVID-19 pandemic were permeating society thanks to progressing 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, risks such as high global inflation, concerns over downturns in the economies of
the United States and China, and the intensification of the situation in Ukraine 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 nine months of the fiscal year under review increased to ¥27,762
million (up 12.0% year-on-year). In terms of profit, operating profit was ¥4,117 million (up 9.6% yearon-year), and ordinary profit was ¥4,413 million (up 10.9% year-on-year). Profit attributable to ownersof parent was ¥3,152 million (up 17.5% 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 ¥20,534 million (up 17.3% year-on-year). Segment profit (operating profit)
was ¥3,254 million (up 14.5% 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 the increasing trend of COVID-19 case numbers, sales in theenvironmental hygiene field decreased as corporate demand for infection-control products declinedwith the evolving permeation of New Normal lifestyles during the COVID-19 pandemic into
society thanks to progressing vaccinations. As a result, net sales was ¥6,233 million (down 2.8%
year-on-year) and segment profit (operating profit) was ¥555 million (down 16.5% year-on-year).
(iii) Other
Net sales of other businesses was ¥993 million (up 14.7% year-on-year) and segment profit(operating profit) was ¥307 million (up 24.2% year-on-year).
(2) Explanation of financial position
Total assets at the end of the third quarter of the fiscal year under review increased by ¥1,507 million
from the end of the previous fiscal year (hereinafter referred to as “the previous fiscal year-end”) to¥56,314 million. This was mainly due to a ¥1,636 million increase in non-current assets due to an-2-

NIPPON FINE CHEMICAL CO., LTD. (4362)

increase in buildings and structures, despite a decrease in current assets by ¥129 million due mainly toa decrease in cash and deposits.
Liabilities at the end of the third quarter of the fiscal year under review increased by ¥1,451 million
from the previous fiscal year-end to ¥11,698 million. This was mainly due to an increase in current
liabilities by ¥1,229 million due mainly to an increase in accounts payable - facilities, and a ¥221
million increase in non-current liabilities due to an increase in deferred tax liabilities.
The net assets at the end of the third quarter of the fiscal year under review increased by ¥55 million
from the previous fiscal year-end to ¥44,616 million. This was mainly due to a decrease inshareholders’ equity by ¥49 million, due to recording ¥3,152 million in profit attributable to owners ofparent, despite an increase of ¥1,873 million in treasury shares and ¥1,346 million in dividends paid,
while accumulated other comprehensive income increased by ¥86 million, mainly due to an increase invaluation difference on available-for-sale securities.
(3) Explanation of consolidated earnings forecasts and other forward-looking statements
There are no changes to our full-year earnings forecasts announced on October 28, 2022. Earnings
forecasts are created based on information available at the time, and actual performance may vary fromforecasted values due to a variety of future factors.

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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 third quarter(As of December 31, 2022)

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

9,035,371
9,693,179
3,867,183
2,461,054
4,322,718
715,507(475)
30,094,539

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

6,721,415
1,291,453
3,713,441
1,711,905
675,720
14,113,935
444,665

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

11,334,007
65,507262,137
11,661,652
26,220,253
56,314,793

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 third quarter(As of December 31, 2022)

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

4,705,710
733,594
404,863
379,30292,25973,484

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

117,223
1,434,818
992,422
8,841,418

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

2,559,501–
140,689
15,600102,7699,430
29,2762,857,267
11,698,686

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

5,933,221
6,821,920
27,596,706(3,170,492)
37,181,355

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

5,929,170(9,374)
663,255
5,346
6,588,398
846,353
44,616,107
56,314,793

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
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
Gain on sale of investment securities
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 third quarter(Cumulative)(From April 1, 2021
to December 31, 2021)
24,789,324
17,050,343
7,738,981
3,982,692
3,756,288

Current third quarter(Cumulative)(From April 1, 2022
to December 31, 2022)
27,762,076
19,301,855
8,460,220
4,342,573
4,117,647

27,079204,857
24,941
256,879

32,041
247,871
32,316
312,229749
31,57560
32,3853,980,782

836
10,318
5,583
16,737
4,413,139

233
0
233

80,207
150,600
230,80750,619324
50,9443,930,071
1,026,701
153,153
1,179,855
2,750,216

12,80916,88929,6994,614,247
1,163,818
234,305
1,398,124
3,216,123

2,682,476
67,7393,152,380
63,743(419,801)(7,078)224,464(4,773)(207,188)
2,543,027

144,256(49,002)(16,319)(807)
78,126
3,294,250

2,422,454

3,239,210

120,573

55,039NIPPON FINE CHEMICAL CO., LTD. (4362)(3) 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 firstnine months of the fiscal year under review increased by ¥120,208 thousand each, compared with thecase where the previous method is used.

-7-

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

Previous third quarter (Cumulative) (From April 1, 2021 to December 31, 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

17,511,167

6,412,413

23,923,580

631,594

24,555,175–

24,555,175

–

–

–

234,149

234,149–

234,149

17,511,167

6,412,413

23,923,580

865,744

24,789,324–

24,789,324

115,643

32,939148,582

31,813

180,396(180,396)

–

Total

17,626,810

6,445,352

24,072,162

897,558

24,969,720(180,396)

24,789,324

Segment profit

2,842,905

665,469

3,508,375

247,9133,756,288–

3,756,288

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.

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NIPPON FINE CHEMICAL CO., LTD. (4362)

II. Current third quarter (Cumulative) (From April 1, 2022 to December 31, 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

20,534,784

6,233,980

26,768,764

750,883

27,519,648–

27,519,648

–

–

–

242,428

242,428–

242,428

20,534,784

6,233,980

26,768,764

993,31127,762,076–

27,762,076

221,657

23,804245,461

30,115275,576(275,576)

–

Total

20,756,441

6,257,784

27,014,226

1,023,427

28,037,653(275,576)

27,762,076

Segment profit

3,254,258

555,423

3,809,681

307,965

4,117,647–

4,117,647

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 ninemonths of the fiscal year under review increased by ¥98,141 thousand for the industrial products
business, ¥6,584 thousand for the household products business, and ¥15,482 thousand for the otherbusiness.

-9-