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.

July 28, 2022

Consolidated Financial Results for the Three Months Ended June 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:
August 12, 2022
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 three months ended June 30, 2022 (from April 1, 2022 toJune 30, 2022)(1) Consolidated operating results (cumulative)
Net sales
Three month ended
June 30, 2022
June 30, 2021

Operating profit

Millions of yen% Millions of yen

9,442
8,259

Note: Comprehensive income(Percentages indicate year-on-year changes.)

14.3
11.7

1,497
1,327

% Millions of yen

12.9
28.7

1,633
1,426

For the three months ended June 30, 2022 ¥1,075 million
For the three months ended June 30, 2021 ¥1,127 million

Basic earnings per
share
Three month ended
June 30, 2022
June 30, 2021

Profit attributable toowners of parent

Ordinary profit% Millions of yen

14.5
25.8

1,096
965

%

13.6
24.0

[(4.6)%][(25.8)%]

Diluted earnings per
share

Yen

46.41
40.64

Yen

–
–

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

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

Net assets

Equity-to-asset ratio

Millions of yen

Millions of yen

55,34354,80744,91344,560¥44,055 million¥43,732 million

%

79.6
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–

Fiscal year-end

Total

Yen

Yen

25.00

–

29.00

54.00

28.00

–

28.00

56.00

–

Fiscal year ending
March 31, 2023
(Forecast)

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(Percentages indicate year-on-year changes.)
Basic
Profit attributable toOrdinary profit
earnings perowners of parent
share

Operating profit

Millions ofyen%Millions ofyen%Millions ofyen%Millions of
yen

%

Yen

17,900

10.4

2,450

2.6

2,600

3.3

1,750

3.0

74.10

Full year
36,000
7.6
4,850
(0.7)
5,200
Note: Revisions to the earnings forecasts most recently announced: None

1.4

3,500

0.8

148.20

Second quarter(cumulative)

* 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 7 “2. Quarterly consolidated
financial statements and main notes (3) 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 June 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 June 30, 2022

1,756,940 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)
Three months ended June 30, 2022

23,615,507 shares

Three months ended June 30, 2021

23,746,791 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 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
During the three months ended June 30, 2022, the Japanese economy saw a gradual recovery with thenormalization of economic activities due to the easing of COVID-19-related restrictions with
progressing vaccinations. However, the rapid depreciation of the yen, surging energy and raw material
prices caused by Russia’s prolonged invasion of Ukraine, and concern over rising COVID-19 casenumbers from the seventh wave caused by new mutant strains mean that the overall 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 three months of the fiscal year under review increased to ¥9,442
million (up 14.3% year-on-year).
In terms of profit, operating profit was ¥1,497 million (up 12.9% year-on-year), and ordinary profit was¥1,633 million (up 14.5% year-on-year). Profit attributable to owners of parent was ¥1,096 million (up13.6% year-on-year).
Operating results for each segment are as follows.
(i) Industrial products businessIn this segment, against the backdrop of a gradual domestic and overseas economic recovery,
overall sales numbers increased. By business field, in the cosmetic ingredients business, sales of
items used in large-scale products by domestic customers continued to grow steadily from last year.
With the gradual recovery in the cosmetics market, sales increased both in Japan and overseas. We
also passed on the increase in export prices and surging costs to import raw materials caused by yen
depreciation to our sales prices, resulting in increased net sales for lanolin and cholesterol, andcosmetic ingredients. In the fine chemicals business, net sales increased as we passed on surging
raw material prices for fatty acid amides to our sales prices. However, in the lipid business(phospholipids for pharmaceuticals), net sales decreased due to differences in shipping periods. As
a result, net sales was ¥7,182 million (up 21.5% year-on-year). Segment profit (operating profit)
was ¥1,255 million (up 17.6% year-on-year) due to increased quantities of cosmetic ingredients andimprovements in merchandise category composition.
(ii) Household products businessIn this segment, sales in the environmental hygiene field decreased as COVID-19 case numbers fellwith progressing vaccinations and corporate demand for infection-control products declined. As aresult, net sales was ¥1,977 million (down 7.4% year-on-year) and segment profit (operating profit)
was ¥163 million (down 24.0% year-on-year).
(iii) Other
Net sales of other businesses was ¥282 million (up 32.0% year-on-year) and segment profit(operating profit) was ¥78 million (up 75.3% year-on-year).
(2) Explanation of financial position
Total assets at the end of the first quarter of the fiscal year under review increased by ¥535 million fromthe end of the previous fiscal year (hereinafter referred to as “the previous fiscal year-end”) to ¥55,343
million. This was mainly due to an increase in current assets by ¥602 million, mainly due to an increasein notes and accounts receivable - trade, while non-current assets decreased by ¥66 million, mainly due
to a decrease in investment securities.
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NIPPON FINE CHEMICAL CO., LTD. (4362)

Liabilities at the end of the first quarter of the fiscal year under review increased by ¥182 million fromthe previous fiscal year-end to ¥10,429 million. This was mainly due to an increase in current liabilitiesby ¥377 million, mainly due to an increase in other in current liabilities, while non-current liabilities
decreased by ¥194 million, mainly due to a decrease in provision for environmental measures.
The net assets at the end of the first quarter of the fiscal year under review increased by ¥353 million
from the previous fiscal year-end to ¥44,913 million. This was mainly due to an increase inshareholders’ equity by ¥411 million, due to recording ¥1,096 million in profit attributable to owners ofparent and ¥684 million in dividends paid, while accumulated other comprehensive income decreasedby ¥88 million, mainly due to a decrease in valuation difference on available-for-sale securities.
(3) Explanation of consolidated earnings forecasts and other forward-looking statements
There are no changes to our second-quarter (cumulative) or full-year earnings forecasts announced on
April 28, 2022 in our “Consolidated Financial Results for the Fiscal Year Ended March 31, 2022
(Japanese GAAP).”
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.

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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 first quarter(As of June 30, 2022)

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

11,716,183
9,378,605
3,297,429
2,349,626
3,696,953
390,115(2,081)30,826,834

3,505,334
1,315,673
3,644,767
3,775,146
532,008
12,772,930
307,3144,686,083
1,363,643
3,644,767
2,740,775
617,711
13,052,981
307,986

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

10,833,286
46,528275,599
11,155,414
24,516,382
55,343,216

NIPPON FINE CHEMICAL CO., LTD. (4362)(Thousands of yen)Previous fiscal year
(As of March 31, 2022)
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-

Current first quarter(As of June 30, 2022)

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

3,987,560
822,951
433,791
412,447

92,25933,402

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

117,223
655,298
1,526,197
7,988,872

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

2,150,578–
126,800
15,600104,298
9,430
33,8212,440,528
10,429,400

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

5,933,221
6,803,377
26,201,984(1,296,698)
37,641,885

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

5,543,510
35,086
828,6635,884
6,413,144
858,785
44,913,815
55,343,216

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

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 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 first quarter(Cumulative)(From April 1, 2021
to June 30, 2021)
8,259,940
5,629,668
2,630,271
1,303,126
1,327,144(Thousands of yen)
Current first quarter(Cumulative)(From April 1, 2022
to June 30, 2022)
9,442,526
6,511,859
2,930,667
1,432,921
1,497,746

3,224
97,2698,422
108,917

5,501
121,824
13,819141,144

283
8,759
110
9,153
1,426,908

311
5,164
9
5,485
1,633,405

20,887–
20,887
1,406,020
353,584
62,692416,277
989,742

1,715
8,547
10,262
1,623,142
526,299(18,673)507,626
1,115,515

965,154
24,587

1,096,034
19,481

85,926(7,990)61,177(1,591)
137,521
1,127,264(241,403)
392
200,858(269)(40,421)
1,075,094

1,088,854

1,007,612

38,41067,481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 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 beenused for buildings acquired on or after April 1, 1998 [excluding facilities attached to buildings] and forfacilities and structures attached to buildings 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
three months of the fiscal year under review increased by ¥34,197 thousand each, compared with thecase where the previous method is used.

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

Previous first quarter (Cumulative) (From April 1, 2021 to June 30, 2021)
Information on net sales and profits or losses for each reporting segment, and information on thedecomposition of profits
Reporting segment(Thousands of yen)
Quarterly
consolidated
statement of
Adjustment
income andamountcomprehensive income
amounts
Note: 2

Industrial
products
business

Householdproducts
business

Total

Other
Note: 1

Total

5,910,235

2,135,313

8,045,549

138,276

8,183,826–

8,183,826–––

76,113

76,113–

76,1135,910,235

2,135,313

8,045,549

214,3908,259,940–

8,259,940

39,604

15,94955,553

10,766

66,319(66,319)–

Total

5,949,839

2,151,263

8,101,102

225,157

8,326,259(66,319)

8,259,940

Segment profit

1,067,467

214,827

1,282,294

44,8491,327,144–

1,327,144

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

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.

II. Current first quarter (Cumulative) (From April 1, 2022 to June 30, 2022)
1. Information on net sales and profits or losses for each reporting segment, and information on
the decomposition of profits
Reporting segment(Thousands of yen)
Quarterly
consolidated
statement of
Adjustment
income andamountcomprehensive income
amounts
Note: 2

Industrial
products
business

Householdproducts
business

Total

Other
Note: 1

Total

7,182,228

1,977,331

9,159,559

202,784

9,362,344–

9,362,344–––

80,18280,182–80,182

7,182,228

1,977,331

9,159,559

282,966

9,442,526–

9,442,526

65,4709,320

74,79010,94885,739(85,739)–

Total

7,247,698

1,986,652

9,234,350

293,915

9,528,266(85,739)

9,442,526

Segment profit

1,255,845

163,257

1,419,103

78,642

1,497,746–

1,497,746

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

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.

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NIPPON FINE CHEMICAL CO., LTD. (4362)
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 and structures attached to buildings 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 quarter ofthe fiscal year under review increased by ¥27.421 thousand for the industrial products business,¥1.965 thousand for the household products business, and ¥4.810 thousand for the other business.

-9-