NIPPON FINE CHEMICAL CO., LTD.

Medium-term Management Plan
(FY2023 to FY2026) Briefing
May 12, 2023
NIPPON FINE CHEMICAL CO., LTD.

NIPPON FINE CHEMICAL CO., LTD.

Table of Contents
1. Review of Medium-term Management Plan (FY2018 to
FY2022)
2. Summary of Medium-term Management Plan (FY2023 to
FY2026)
3. Capital Policies
4. Sustainability

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NIPPON FINE CHEMICAL CO., LTD.

Table of Contents
1. Review of Medium-term Management Plan (FY2018 to
FY2022)
2. Summary of Medium-term Management Plan (FY2023 to
FY2026)
3. Capital Policies
4. Sustainability

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NIPPON FINE CHEMICAL CO., LTD.

1. Review of Medium-term Management Plan (FY2018 to
FY2022)(Industrial Products Business)—Cosmetic Ingredients Field—
Initial target•

Enhance recognition and penetrate the market, aiming to
be a global partner supplying cosmetic functional
ingredients (“active ingredient,” “functional ester” and “nanomaterials”)

Action•ResultDespite a brake put on sales due to the spread of the
COVID-19 infection, focused on developing and expanding (Consolidated overseas net sales)
sales of sustainable products such as RSPO* and NonFY2018: ¥5.6 billion
GMO* products and realized sales expansion to overseas⇒ FY2022: ¥9.2 billion
customers.

*RSPO･･･Roundtable on Sustainable Palm Oil (certification system)
Non-GMO･･･Products that do not use genetically modified organisms

180
160

Consolidated overseas net sales
Cosmetic Ingredients Business net sales

140
120
100
80

60
40

The figure for FY2018 isassumed as 100.

200FY2018FY2019FY2020

FY2021

FY2022

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NIPPON FINE CHEMICAL CO., LTD.

1. Review of Medium-term Management Plan (FY2018 to
FY2022)—Fine Chemicals Field—

Initial target•

Strengthen the development of the downstream field, withaims to enhance competitiveness in the phospholipids
for pharmaceuticals and existing fields and to expand
our business domain

ActionResult•Constructed a new plant and an office building with an •eye on growth of nucleic acid-based pharmaceuticals using
liposomes and LNPs*, and constructed a new plant based •on a request for production increase from Gilead Sciences,
Inc.

•

Promoted the selection and concentration of existingproducts through reviewing the business portfolio
Concentrated resources on the products that havepotential for high profitability, as the materials forperovskite solar cells developed into a major theme••

Acquire new business domains in functional resins andfunctional coatings••

Total capital investment ofapprox. ¥5.3 billion
Established theorganizational structure as
the Lipid Division

Withdrew from the leather
agent field due to sale of
Taicang Nikka Fine ChemicalCo., Ltd., a subsidiary
Succeeded in developing
materials for solar cells throughjoint development with AIST**LNP･･･Lipid nanoparticles, a new pharmaceuticals
delivery system
AIST･･･National Institute of Advanced Industrial Scienceand Technology
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NIPPON FINE CHEMICAL CO., LTD.

1. Review of Medium-term Management Plan (FY2018 to
FY2022)(Household Products Business)—Environmental Hygiene Field—
Initial target

Action・Further reinforce the core business

Established a production and supply system for hand sanitizerin response to the spread of the COVID-19 infection, andincreased the supply to the market

・Enhance the product development capability

Developed automatic dispensers, and focused on sales of the
ARBONURSE hand sanitizer

・Expand operations and acquire new business domains

ARBONURSE brand penetrated

ResultAchieved the operating profit target
for the final year even halfway
through the period due to special
demand related to COVID-19
Despite falling demand in reaction
to it, achieved the operating profit
target in the final year, too

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NIPPON FINE CHEMICAL CO., LTD.

1. Review of Medium-term Management Plan (FY2018 to
FY2022)(Other)Initial target

ActionResult••While striking an optimal balance between capitalefficiency and financial soundness, work to enhance
corporate value and continuously improve and stabilize
the dividend level based on business performance••

Introduced a consolidated dividend on equity (DOE) as a•
new dividend policy
Promoted reduction of cross-shareholdings andpurchase of treasury shares•

Dividend payments increased
for the sixth consecutive year
(FY2018: ¥30/share⇒ FY2022: ¥57/share)
Sold four issues of shares
held(currently 26 issues held)
Purchased approx. 950,000
shares of treasury shares(approx. 4% of the number ofissued shares)

Implemented operations generally in line with the initial targets in all the businesses,
despite the impact of COVID-19
Accelerated selection and concentration of businesses as well as enhancement of
capital policies
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NIPPON FINE CHEMICAL CO., LTD.

1. Review of Medium-term Management Plan (FY2018 to
FY2022)(Quantitative Targets)

FY2018(Unit: Millions of yen)
Actual amountMedium-term Management Plan
(Final year)

FY2022

Actual amount

Changes incomparison with
FY2018 (%)

Target amount

Increase/decrease
from the target

Net sales

28,08436,83831.2%

39,000-5.5% Not achieved

Operating profit

3,199

5,057

58.1%

3,900

29.7% Achieved

Ratio of operating profit (%)

11.4%

13.7%

10.0%

Achieved

Ordinary profit

3,503

5,389

53.8%

Profit attributable to owners ofparent

2,303

4,079

77.1%

Basic earnings per share (Yen)

96.98

174.4279.9%¥10.0 billion yen

Achieved

Capital investment (five years
cumulative)¥10.9 billion yen

Net sales fell short in the domestic trading departments, but we achieved the operating profit target mainly
due to growth in the Cosmetic Ingredients BusinessAlso steadily made capital investment toward future growth
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NIPPON FINE CHEMICAL CO., LTD.

1. Review of Medium-term Management Plan (FY2018 to
FY2022)(Matters implemented other than initial targets)• Listed on the Prime Market of the Tokyo Stock Exchange(Steadily comply with the Corporate Governance Code)• Formulated the long-term vision (NFC VISION 2030)• Took measures for sustainability and TCFD* issues*TCFD･･･Task Force on Climate-related Financial Disclosures

In addition to responding to changes in the external environment, formulated a long-term policy andcarried out various measures based on it⇒ Advanced the transformation into “a corporate group growing sustainably”
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NIPPON FINE CHEMICAL CO., LTD.

Table of Contents
1. Review of Medium-term Management Plan (FY2018 to
FY2022)
2. Summary of Medium-term Management Plan (FY2023 to
FY2026)
3. Capital Policies
4. Sustainability

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NIPPON FINE CHEMICAL CO., LTD.

2. Summary of Medium-term Management Plan (FY2023 to
FY2026)FY2018 to FY2022

FY2023 to FY2026

FY2027 to FY2030

The 13th Medium-termManagement Plan

The 14th Medium-termManagement Plan

The 15th Medium-termManagement Plan

Stage tostrengthen governancetoward sustainable growthStage tostrengthen growth foundation
through aggressive investment

Stage toexpand growth and earnings
to achieve NFC VISION 2030

[Strengthen governance]*Get listed on the Prime Market of theTokyo Stock Exchange(Comply with the Corporate
Governance Code)*Formulate NFC VISION 2030
(Develop and share the vision of theCompany’s future self)*Take measures for sustainability
issues(Improve the sustainability promotion
structure)*Review business and asset portfolios(Reorganized subsidiaries and sold
non-current assets)[Strengthen growth foundation]*Review business portfolio(Restructure segments)*Establish strategic products(Phospholipids)*Strengthen capital investment andinvest in R&D(Improve production capacity, anddevelop next-generation products andmanufacturing technologies)[Expand growth and earnings]*Achieve NFC VISION 2030
(Achieve the vision of the Company’s
future self)*Realize sustainable growth(Achieve numerical goals for “theCompany’s future self it aims to be”)
*Implement measures forsustainability issues(Achieve goals by FY2030)*Enhance measures for sustainability
issues(Take specific actions to achieve
numerical goals)

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NIPPON FINE CHEMICAL CO., LTD.

2. Summary of Medium-term Management Plan (FY2023 to
FY2026)• New Business Segment

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NIPPON FINE CHEMICAL CO., LTD.

2. Summary of Medium-term Management Plan (FY2023 to
FY2026)• Review the business portfolio (restructure segments)⇒ With an eye toward strengthening future business strategies, we have subdivided thebusiness segment brought together as industrial products into beauty care, health care,fine chemical, and trading based on business fields, and decided to make a voluntary
disclosure.

Cosmetic ingredients

Beauty care

Lipid

Health careFine chemicals

Fine chemical●Changes• Restructured Cosmetic Ingredients Business (including
lanolin cholesterol), Lipid Business and Fine Chemicals
Business to reorganize them into beauty care, healthcare and fine chemical based on business fields, andrenamed them the Functional Products segment.

Domestic trading

Trading•Changed the Household Products segment to only
consist of hygiene (Arbos), and renamed it theEnvironmental Hygiene Products segment.

•

Transfer the pharmacology and safety tests from the
Other segment to health care in the Functional Products
segment.

Current
Industrial ProductsHousehold Products
Arbos
Other
Other

FutureFunctional Products

Environmental Hygiene ProductsHygiene
Other
Real estate

Pharmacology and safety tests
Real estate

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NIPPON FINE CHEMICAL CO., LTD.

2. Summary of Medium-term Management Plan (FY2023 to
FY2026)• Establish strategic products (phospholipids)
Identify phospholipids*, the Company’s
proprietary technology product, as a growth
driverWill strengthen growth foundation with thephospholipids for pharmaceuticals (healthcare) and the phospholipids for cosmetics(beauty care)*Phospholipids:

A key component of cell membrane which
protects human cells.
Phospholipids are compatible with both waterand oil, act as an intermediary between
components that would otherwise resist eachother, and produce effects such as “helping
ingredients blend smoothly together” and“protect bodies from ailments, etc.”

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NIPPON FINE CHEMICAL CO., LTD.

2. Summary of Medium-term Management Plan (FY2023 to
FY2026)• Establish strategic products (phospholipids)(beauty care)
Source:Forecast of global cosmetics market size (by field)
Billion USD
Average annual growth rate
200(2022-2031)

150

Skin care
Hair care
MakeupFragrance
Other

:7.1％
:7.8％
:8.1％
:6.0％
:6.1％

Cosmetics Market Analysis and Segment
Forecasts to 2031 (Maia Research)

Forecast of global cosmetics market size (by area)
Billion USD
150

100

100
50

Average annual growth rate(2022-2031)
United States
Europe
China
Japan
Korea

:7.3％
:6.9％
:7.9％
:7.6％
:6.0％

Europe, the United States andChina are the biggest drivers ofglobal market expansion.

50-

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

The skin care market, in which most of the Company’s cosmetic ingredients areused, is large in size and continues to grow
By area, in addition to continued sales expansion to China, aim to expand sales toEurope and the U.S., the largest market

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NIPPON FINE CHEMICAL CO., LTD.

2. Summary of Medium-term Management Plan (FY2023 to
FY2026)• Establish strategic products (phospholipids)(beauty care)
Item

Details

Marketsize(estimate)

Analysis of the current environment

The Company’s
responseJapan

Approx.
¥2.6 trillion

Inbound demand disappeared and domestic demand
declined due to the COVID-19 pandemic⇒ slow recovery from the COVID-19 impact

Widely adopted bycosmetics manufacturers⇒ expansion

GlobalApprox.
¥38 trillion

Many countries rebounded swiftly from the COVID-19
pandemic and kept growing⇒ expect steady growth

Expand adoption by major
global cosmetics
manufacturers, etc.

MarketMarket trends–

Cosmetics markets expanded primarily in the growing Eastand Southeast Asian economies, and there was anincrease in high value-added products

Combine highly functional
ingredients and marketing

Sustainability–

Selection of ingredients, use of plant-derived and NonGMO ingredients mainly in Europe and the U.S.

Develop products to meetthe needs

Products

Given the potential
for future market
growth,particularly focus
on these among
the Company’s
strategies

To prepare for future market growth, construct a new plant for the phospholipids forcosmetics
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NIPPON FINE CHEMICAL CO., LTD.

2. Summary of Medium-term Management Plan (FY2023 to
FY2026)• Establish strategic products (phospholipids)(health care)
120

Global pharmaceuticals market size (amount)

Global pharmaceuticals market size and average annual
growth rate by modality

Trillion of yen

Types of treatment(Modality)

100

80

Regenerative
therapy

60

Gene therapy
Nucleic acid-based
pharmaceuticals

40

Peptidepharmaceuticals
Antibody
pharmaceuticals
Proteinpharmaceuticals

20

Small molecule
pharmaceuticals

Market size
(2030)

Growth rate
(2020-2030)

Regenerative therapy¥2.5 trillion

High (approx. 20%)

Gene therapy¥4.6 trillion

High (approx. 30%)

Nucleic acid-based
pharmaceuticals¥2.1 trillion

High (17%)

Peptide pharmaceuticals¥4.7 trillion

Moderate (8%)

Antibody pharmaceuticals¥23 trillion

Moderate (8%)

Protein pharmaceuticals¥10 trillion

Low (4%)

Small molecule
pharmaceuticals¥55 trillion

Low (slight increase)

Created by reference to materials of Arthur D. Little (March 2021)

2020

2030

The pharmaceuticals market’s center of future growth will move from small molecule pharmaceuticals to nucleic acidbased pharmaceuticals and gene therapy⇒ While ensuring profits in existing businesses that are large in scale, focus on new fields such as nucleic acid-based
pharmaceuticals

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NIPPON FINE CHEMICAL CO., LTD.

2. Summary of Medium-term Management Plan (FY2023 to
FY2026)• Establish strategic products (phospholipids)(health care)*Shonan Laboratory (in Shonan iPark)
Opened in 2023 to accelerate development

Open Innovation• Shonan Laboratory*• Conduct joint research with universities andestablish rights• Collaborate with competitors

CDMO BusinessTechnology for
Sustainability(Flow reactor, enzyme technology, etc.)• Manufacture sustainably• Prepare various functional lipids• Significantly reduce development cost

• Manufacture and sell ingredients +nanomedicine CDMO
• High-purity phospholipids/Cholesterol• Proprietarily developed functional lipids• Know-how for liposome formulation*Horizontal specialization
This is a move also developing inthe semiconductor and smart
phone industries, referring to atrend of dividing development andmanufacturing and having themdone by different companies tomitigate risks due to increasing
difficulty in R&D

Marketing• Brand the CDMO business• Participate in academic conferences/exhibits• Strengthen sales capabilities

To steadily capture the needs for “horizontal specialization*,” which has been advanced in thepharmaceuticals industry,
focus on CDMO (contract development and manufacturing organization) from now on
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NIPPON FINE CHEMICAL CO., LTD.

2. Summary of Medium-term Management Plan (FY2023 to
FY2026)• Perovskite: A material for Perovskite Solar Cells (PSC) (fine chemical)
Technology ofJapanese
originGlobal market for new-type/next-generation solar cells

Lightweight
and flexible

Billions of yen
900.0¥830.0 billion

800.0

Market size hasgrown to approx. 13
times in 13 years

700.0
600.0

Perovskite solar
cells (PSC)

500.0

High
conversion
efficiency

Lowmanufacturing
cost

Organic
photovoltaics(OPV)
Dye sensitizedsolar cells (DSC)

400.0

PSC is the mostpromising

300.0
200.0

¥64.0 billion

Picture provided by: Toin University of Yokohama
100.0*Hole transport material
An extremely important material that takes out a positive electrical charge andsend it to an electrode. We strengthen and expand the sales of this material in boththe forms of Spiro-MeOTAD produced by the Company’s unique manufacturingmethod, and proprietarily developed items

0
2019

2020

2021

2022
Expected2023
Forecast

2024
Forecast

2025
Forecast

2030
Forecast

2035
Forecast

Source: Fuji Keizai Group (April 2022)

Solar cells that are light, bend and can generate power even in a low light condition⇒ applicable to a use for which currently prevailing silicon cells are difficult to use
The market size of hole transport materials* is estimated to grow to ¥20.0 billion or more by 2035

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NIPPON FINE CHEMICAL CO., LTD.

2. Summary of Medium-term Management Plan (FY2023 to
FY2026)• Arbos (hygiene)
Hand washing soap
solutions/hand soaps

Hand sanitizer

Concentrated
detergents

Develop environment-friendly products
such as pouches, RSPO products andbiomass containers

Enhance the BtoB/BtoC ARBONURSE
series

Add items to the ECO
series lineup

Make a difference by advancing development of high value-added products while
launching sustainability-compatible products
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NIPPON FINE CHEMICAL CO., LTD.

2. Summary of Medium-term Management Plan (FY2023 to
FY2026)• Investment in R&D*Realize sustainable production activities through implementation of the materialities• Carbon neutrality• Reduce releases of substances subject to the pollutant release and transfer register (PRTR) system (system tomanage release of chemical substances)• Promote the reduction and recycling of industrial waste• Enhance effective use of water resources*Creation of future core technologies• Consider the use of flow reactors (continuous reaction)*• Consider making the technology for enzyme synthesis more efficient*Flow reactors (continuous reaction)
A method under which ingredients arecontinuously fed into a column to get a productin continuity. Compared with the “batch reaction,”
we can expect more energy saving and waste
reduction.

Accelerate our measures for sustainability issues, in addition to our sustainable growth, by also working
on new technology development of products other than the materials for perovskite solar cells, etc.
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NIPPON FINE CHEMICAL CO., LTD.

2. Summary of Medium-term Management Plan (FY2023 to
FY2026)• Investment in R&D
1,200

2.8%
1,100

R&D expenses (Unit: Millions of yen)

800

2.7%

970

1,000

Ratio of R&D expenses to net sales
717
675

600

2.7%

894
825

2.6%

712
2.6%

2.5%

2.5%

2.5%
2.4%

2.4%

2.4%
400

2.3%

2.3%

200

2.2%

0

2.1%

FY2018FY2019FY2020

FY2021

FY2022

Period of the 13th Medium-term Management Plan
(Actual results)

FY2023

FY2024FY2026

Period of the 14th Medium-termManagement Plan (Target)

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NIPPON FINE CHEMICAL CO., LTD.

2. Summary of Medium-term Management Plan (FY2023 to
FY2026)• Numerical managerial goals
Vision of theCompany’s
future self
151st fiscal year 155th fiscal year 156th fiscal year 159th fiscal year 163rd fiscal year
Actual results
Actual results
Plan
TargetTargetGrowthpotential
Profitability

Capitalefficiency

The 13th Medium-termManagement Plan

The 14th Medium-termManagement Plan

FY2018FY2023

FY2022

FY2026

FY2030Net sales (Unit: Billions of yen)

28.0

36.8

38.0

41.0

50.0

Operating profit(Unit: Billions of yen)

3.1

5.0

4.8

5.7

7.7

EBITDA (Unit: Billions of yen)

4.3

6.0

6.1

7.7

11.1

6.1%

7.9%

8.0%

9.0%

¥10.9 billion in five years¥12.0 billion in four years

ROIC
Capital investment(Unit: Billions of yen)
Ratio of R&D expenses to
net sales

2.4%

2.4%

2.6%

2.7%

*EBITDA: Operating profit before depreciation and amortization (Operating profit + depreciation and amortization)
ROIC:
Return on invested capital (Operating profit after tax / (interest-bearing liabilities + equity))

Continue aggressive capital investment, and further increase the investment in R&D as wellSet EBITDA and ROIC as target indicators from the perspective of investment profitability and capital efficiency
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NIPPON FINE CHEMICAL CO., LTD.

2. Summary of Medium-term Management Plan (FY2023 to
FY2026)
22.6%

Ratio of operating profit
EBITDA margin

19.5%

ROIC

15.4%

16.3%

16.3%

15.4%

13.9%

13.7%
12.6%
11.1%

9.0%
7.9%

8.0%

7.4%

6.1%

*EBITDA margin: EBITDA / net sales
ROIC: Return on invested capital (Operating profit after tax / (interest-bearing liabilities + equity))

FY2018FY2022

FY2023

FY2026

FY2030151st fiscal year
Actual results

155th fiscal year
Actual results

156th fiscal year
Plan

159th fiscal year
Target163rd fiscal year
TargetPeriod of the 13th Medium-termManagement Plan

Period of the 14th Medium-termManagement Plan

Vision of theCompany’s future self

Expect EBITDA margin to grow
Aim at the ratios of operating profit and ROIC at the same levels as FY2022, given an increase in depreciation
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NIPPON FINE CHEMICAL CO., LTD.

2. Summary of Medium-term Management Plan (FY2023 to
FY2026)The 14th Medium-term Management Plan
155th fiscal year Actual results

156th fiscal year Plan

159th fiscal year Target

FY2022

FY2023

FY2026(Unit: Billions of yen)

Net sales

OperatingprofitNet sales

OperatingprofitNet sales

OperatingprofitFunctional Products

28.4

4.1

28.0

3.7

28.9

4.4

Beauty care

7.6

2.0

8.9

2.0

10.3

2.0

Health care

5.7

0.9

5.9

0.4

7.1

1.1

Fine chemical

6.4

0.9

5.1

0.9

5.2

1.0

Trading

8.5

0.2

7.9

0.3

6.0

0.2

Environmental Hygiene
Products

8.0

0.7

0.8

9.7

1.0

1.0

11.9

1.1

1.2

Other

0.3

0.1

0.1

0.2

0.1

0.1

0.2

0.0

0.1

Consolidated Total

36.8

5.0

6.0

38.0

4.8

6.1

41.0

5.7

7.7

EBITDA

5.0

EBITDA

4.9

EBITDA

6.4*Beauty care: cosmetic ingredients, the lanolin for cosmetics, etc.
Health care: the phospholipids for pharmaceuticals, the lanolin for pharmaceuticals, pharmaceutical intermediates, pharmacology and safety tests, etc.
Fine chemical: fatty acid amides, functional coatings, fatty acid chlorides, etc.

For beauty care, net sales are expected to increase, but operating profit is expected to remain flat due toincreasing depreciation burden associated with large capital investment
For health care, profit is expected to increase in line with a rise in net sales in the final year after going
through the depreciation burden

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2. Summary of Medium-term Management Plan (FY2023 to
FY2026)
Breakdown of capital investment

Amount(Billions of yen)

Remarks

Expand facilities for the phospholipids for cosmetics (inTakasago)

2.3 Scheduled for completion in FY2026

Digitalization (such as upgrading core system)

1.6

4-year total

Measures for sustainability issues

0.6

4-year total

Business expansion investment (to increase production,
construct a new warehouse, etc.)

0.84-year total

Construction of the new administration and welfare
building (in Kakogawa-higashi)

1.7 Scheduled for completion in FY2024

Investment for renovation

2.5

4-year total

Investment in R&D facilities

1.1

4-year total

Group companies

1.44-year total

Total

12.0

To achieve NFC VISION 2030, strive to strengthen growth foundation through aggressive investment

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NIPPON FINE CHEMICAL CO., LTD.

Table of Contents
1. Review of Medium-term Management Plan (FY2018 to
FY2022)
2. Summary of Medium-term Management Plan (FY2023 to
FY2026)
3. Capital Policies
4. Sustainability

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NIPPON FINE CHEMICAL CO., LTD.

3. Capital Policies
Vision of theCompany’s
future self
151st fiscal year 155th fiscal year 156th fiscal year 159th fiscal year 163rd fiscal year
Actual results
Actual results
Plan
TargetTargetThe 13th Medium-termManagement Plan

The 14th Medium-termManagement Plan

FY2018FY2023

FY2022

FY2026

FY2030

DOE

2.0%

3.0%

3.5%

3.5%

Dividends per share

¥30

¥57

¥70

¥80

Total return ratio

31%

79%

Ratio of cross-shareholdings

28%

25%

¥100

50% or more on average
17% or less

10% or less

*DOE:
Dividend on equity (Total amount of annual dividends / consolidated net assets, or payout ratio x ROE)
Total return ratio: (Total amount of dividends + amount of treasury share purchased) / profit attributable to owners of parent
Ratio of cross-shareholdings: Percentage of the “carrying amount” of the “investment shares held for purposes other thanpure investment” against consolidated net assets

To enhance shareholder returns, raised the DOE target from 3.0% to roughly 3.5% and set a target for total
return ratio
Reduce cross-shareholdings by stages, aiming at the ratio of cross-shareholdings at 17% or less withinfour years

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3. Capital Policies
2.2

Cash and depositsbalance plan
(Unit: Billions of yen)

Capitalinvestment

7.1

Sale ofshares held
12.5
Dividends/purchaseof treasury shares

Depreciation

-120
-12.0
Increase inworking
capital, etc.

8.9
Accumulation of
profits, etc.

Balance as ofMarch 31, 2023

7.8

-8.4
-84
-2.4
-24

Balance as ofMarch 31, 2027

Accumulate not only profits, etc. but also cash by promoting sale of shares held
⇒ To be allocated for capital investment and shareholder returns (so that we can increase dividends byraising DOE from 3.0% to roughly 3.5%, and purchase treasury shares)

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3. Capital Policies
Period of the 13th Mediumterm Management Plan
(Actual results)

Trends in dividends per share(Yen)

Period of the 14th
Medium-termManagement Plan
(Target)

Vision of theCompany’s
future self

100

80
70

54

28
20

21

23

30

33

57

35

23

FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2026 FY2027 FY2030

Will steadily increase dividends per share
In FY2026, aim at ¥80 per share, four times higher than FY2013
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NIPPON FINE CHEMICAL CO., LTD.

Table of Contents
1. Review of Medium-term Management Plan (FY2018 to
FY2022)
2. Summary of Medium-term Management Plan (FY2023 to
FY2026)
3. Capital Policies
4. Sustainability

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4. Sustainability
Nippon Fine Chemical’s Basic Policy for Sustainability“Aiming for our sustainable growth and to bring about a sustainable society”
Our Basic Policy for Sustainability is established on the basis of the “Smiles on Faces: The
Power of KIREI” in our long-term vision, the NFC VISION 2030, and our sub-concept of helping
to sustain the three “KIREIs” of the Earth, society, and the future.

Environment

・Contribute to achieving a carbonneutral society.
・Reduce industrial waste andpromote recycling.

Safety and Security

・Prevent workplace accidents andensure health and safety forworkers.
・Contribute to the society throughsafe and reliable products.

Human Capital

・Be a company where women canplay an active role.
・Be a workplace where people canwork equally, regardless of
disability.
・Achieve a work-life balance by
supporting child-rearing and longterm care.

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4. Sustainability
Environment〇 Reduction of CO2 emissions by 38% by FY2030

compared to FY2013 level
・Purchase renewable energy
・Reduce emissions through capital investment/
introduction of technologies〇 Reduction of the amount of industrial waste by 20% ormore compared to FY2019 level and achieve therecycling rate of 90% or more by FY2030
・Reduce waste through process improvement
・Reduce the amount of waste by changing equipment
specs

Safety and Security

Human Capital〇 Percentage of women employees at 20% or more

by FY2027
・Create an environment in which women can continue
to work for a long period・Create an environment in which women can work,through the investment in manufacturing facilities, etc.

〇 Percentage of women in management positions

at 30% or more in the 2030s
・Hold leader training sessions for women
・Review the personnel system (diversify management
positions to include specialized management
positions, etc.)〇 Percentage of employees taking child-care leave

at 70% or more by FY2025〇 Zero workplace accident〇 Reduction of the number of quality complaints

by 50% or more compared to FY2022 level

・Introduce a unique system to promote take-up of childcare leave by men
・Promote creation of culture where employees easily
take child-care leave

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• Statements regarding earnings forecasts, etc. describedin this document are based on the information obtainedby the Company at the time of preparation of eachdocument and certain assumptions that it deems
reasonable, and are not intended to promise that they
will be realized.
• Please be aware that, due to various factors, actual
business results may vary from these forecasts.