Briefings on Financial Results
For the Three Months of ended Jun. 30, 2020
ADEKA CORPRATION Aug. 31, 2020
【TSE 4401】

Financial Results Overview
FY2020 1st Quarter

Apr. 1, 2020 – Jun. 30, 2020

President and Chief Executive Officer

Hidetaka Shirozume

1

Contents

1. FY2020 Prospective Performance
2. FY2020 1st Quarter Consolidated Performance
3. Progress of mid-term management plan BEYOND 300
4. For Reference

FY2020/1Q Financial results

21. FY2020 Prospective Performance3

FY2020 Prospective Performance
Unit: 100 million yenConsolidated

FY2020
1HForecast

2HForecastAnnualForecast

FY2019ResultAmounts

Rate (%)

1,350

1,550

2,9003,041

△ 141

△ 4.6

Operating profit

58102160225△ 65△ 28.9Ordinary profit

51109160219△ 59△ 27.2Profit attributable toowners of parent

3466

100152△ 52△ 34.3

Net profit per share- yen/share -

32.9

63.9

96.9

147.7

△ 50.824244848－

Net sales

Dividend- yen/share -Premise of FY2020 1H
Beginning of the period
Exchange rates
Naphtha

FY2019 Result￥／$

108.00108.65￥／€120.00120.82￥／KL45,000

42,925Note1 : Figures are expressed in units of 100 million yen and have been rounded off.
Note2 : Effect of exchange rate when 1 yen depreciation (operating profit) :Profit plus about 100 million yen per year and about 50 million yen per euro

FY2020/1Q Financial results

4Impact of COVID-19 on Business Performance
PremiseIn FY2020, we calculated the consolidated business forecast based on the premise that demand will
decline particularly in the first half of the year, and will gradually recover from the second half.
Segment

MarketImpact on business

Polymer additives

Automotive, Building materialsChemicals

Hand wash, Disinfectant

Functional Chemicals(Surfactants)

Electronics and IT materials(Photo(Light) Curing Resins, Photoinitiator,Photoacid generator)

Tourism, Restaurant industry

Foods products

Consumption from staying at home

Foods products(Souvenir sweets)(Plain bread, Assorted sweets)

Life Science

Functional Chemicals(Lubricant Additives, Special Type Epoxy Resins,Painting materials, Industrial Agents)

Electronic device（PCs / TVs）

Food

(Additives, Plasticizers, PVC Stabilizers)(Margarines, shortening, fillings)(Margarines, shortening)

Agrochemicals has little negative impact from COVID-19However, direct impact on production and procurement and indirect impact due to changes inthe environment surrounding agriculture are assumed.
FY2020/1Q Financial results

5FY2020 Prospective Performance - By segment Unit: 100 million yen

Consolidated

Sales
Chemicals
Polymer Additives
Electronics and IT materials
Functional chemicals

Food productsLife Science
Other
Operating profit
Chemicals

Polymer Additives
Electronics and IT materials
Functional chemicals

Food productsLife Science
Other

FY2020FY2019Results

YoY change

1H
Forecast

2H
Forecast

AnnualForecast

1,350720

1,550780

2,900
1,500

3,041
1,641△ 141△ 141△ 4.6△ 8.632527035345385406706557571060485△ 4050
△ 10△ 5.68.4△ 12.2585810271160129225175△ 65△ 46△ 28.9△ 26.4192613263114455727665949△7△5△5△ 49.1
△ 19.9△ 74.8350
1262442△20371139270721265
51462328212821264556

15267Amounts△ 1000
△ 42

△ 21
△2
△ 22

Rate (%)△ 12.20.2△ 7.6△ 32.0△ 4.8△ 45.2

Note : Figures are expressed in units of 100 million yen and have been rounded off.

FY2020/1Q Financial results

6Change the scope of consolidation and equity method
 Change the scope of consolidation

Included in the scope of consolidation from FY2020 due to the increase inthe importance of the following three companies.

• ADEKA FINE CHEMICAL (ZHEJIANG) CO.,LTD.

CHINA｜Manufacture and sales of chemical products such as polymer additives.

• ADEKA AL OTAIBA MIDDLE EAST

UAE｜Manufacture and sales of polymer additives, Sales for Chemicals and Foods• NICHINO EUROPE

UK｜Sales and R&D of agrochemicals in Europe

 Change the scope of equity method
Included in the scope of equity method from FY2020 due to the increase inthe importance of the following company.

• NICHINO VIETNAM

VIETNAM｜Development, sales, marketing, import and export of agrochemicals in Vietnam

FY2020/1Q Financial results

72. FY2020 1st Quarter Consolidated Performance

8

FY2020 1st Quarter

Consolidated Performance
Consolidated

Unit: 100 million yen

FY2019 1Q

FY2020 1QAmountsRate (%)

Net sales

701678

△ 23

△ 3.3

Operating profit

4450512.3

Ordinary profit

424526.7

Profit attributable toowners of parent

3231△1△ 3.4

Net profit per share- yen/share -31.2

30.1

△ 1.1

Note : Figures are expressed in units of 100 million yen and have been rounded off.

FY2020/1Q Financial results

9FY2020 1st Quarter

Analysis of Operating Profit
Consolidated

The increase in operating profit

165

Unit: 100 million yen

５060△ 144020△2△050440
FY2019 1QNIHONNOHYAKU

Net pricing

Fixed costs, etc. Sales volume

Exchange

Unification offinancial period

FY2020 1Q

Note : Figures are expressed in units of 100 million yen and have been rounded off.

FY2020/1Q Financial results

10Trends in Consolidated Performance

FY2020 1st Quarter

Consolidated
Sales:
100 million yen

1,000Net sales

Operating profit

525347

Operating profit:
100 million yen

50
4440

500

5350

FY2016 1Q

574

FY2017 1Q

617

FY2018 1Q

701

FY2019 1Q

678

FY2020 1Q

20Note : Figures are expressed in units of 100 million yen and have been rounded off.

FY2020/1Q Financial results

11Segmental Information

Chemicals “Polymer additives”
 Sales

Unit: 100 million yen△ 6.9％

193

Main factor (YoY) AutomobileweakNucleating Agents, Light Stabilizers,
Plasticizers for Rubbers

 Building material

180

weak

PVC Stabilizers

 Food packaging, Medical use
FY2019 1Q
FY2020“Accounting”

FY2020 1Q

grew

1Q

2Q

3Q

4Q

180---

 All plastic products
weak

Antioxidants Home appliances frame Operating profit

Unit: 100 million yen△ 25.6％16

steadyFlame retardants for Engineering plastics

Main factor (YoY)

Unit: 100 million yen

12

FY2019 1Q
FY2020“Accounting”

Clarifying Agents, PVC Stabilizers

FY2020 1Q

1Q

2Q

3Q

4Q

12---

Sales volume

Net pricingFixed costs, etc.

△411Note : Figures are expressed in units of 100 million yen and have been rounded off.

FY2020/1Q Financial results

12Chemicals “Electronics and IT materials”
 Sales

Segmental Information

Unit: 100 million yen

Main factor (YoY)△ 6.7％

68strong63

FY2019 1Q
FY2020“Accounting”

 Semiconductor

weak

FY2020 1Q

1Q

2Q

3Q

4Q

63

---

 Operating profit

Photoacid generator used forsemiconductor lithography
High-k material for existing DRAM

 Display
weak

Photo(Light) Curing Resins, Photoinitiator,
Etchants for printed circuit boards

Unit: 100 million yen△ 12.3％Main factor (YoY)1614

FY2019 1Q

FY2020 1Q

FY2020“Accounting”

1Q

2Q

3Q

4Q

14---

Unit: 100 million yen

Net pricing

Sales volume

Exchange△1△0△0Note : Figures are expressed in units of 100 million yen and have been rounded off.

FY2020/1Q Financial results

13Segmental Information

Chemicals “Functional chemicals”
 Sales

Unit: 100 million yen△ 12.6％116

FY2019 1Q

FY2020 1Q

weak2Q

3Q

4Q

116

---

Surfactants, Peroxygen Chemicals,
Propylene Glycol Cosmetics, toiletries
steadySurfactants for hand wash, disinfectant

weak

Cosmetic Ingredients

Unit: 100 million yen△ 31.8％14

Main factor (YoY)

9FY2019 1Q

FY2020“Accounting”

Lubricant additive for engine oil,Special Type Epoxy Resins Industrial Agents1Q

 Operating profit

 Automobile
weak133

FY2020“Accounting”

Main factor (YoY)

FY2020 1Q

1Q

2Q

3Q

4Q

9---

Sales volume

Net pricing

Fixed costs, etc.

△54

△2

Note : Figures are expressed in units of 100 million yen and have been rounded off.

FY2020/1Q Financial results

14Segmental Information

Food Products
 Sales

Unit: 100 million yen△ 6.1％

163

FY2019 1Q

FY2020 1Q

weakMargarines

 Western confectionery, dessert

2Q

3Q

4Q

163---steady

Whipping cream Souvenir sweets
weakMargarines, shortening, fillings

Unit: 100 million yen△ 6.0％

Main factor (YoY)22

FY2019 1Q

FY2020 1Q

FY2020“Accounting”

Margarines, shortening

 Bread in CHINA, SOUTHEAST ASIA

1Q

 Operating profit

 Bread, confectionery, curry, ramen in JAPAN
steady174
FY2020“Accounting”

Main factor (YoY)

1Q

2Q

3Q4Q

2---

Sales volume

Fixed costs, etc.

Net pricing△210

Note : Figures are expressed in units of 100 million yen and have been rounded off.

FY2020/1Q Financial results

15Segmental Information

Life Science “NIHON NOHYAKU”
 Sales

Unit: 100 million yen

24.9％

Main factor (YoY)140112FY2019 1Q
FY2020“Accounting”

FY2020 1Q
1Q

2Q

3Q

4Q

140---

 Operating profit

Unit: 100 million yen

FY2019 1Q

strongJAPAN, NORTH AMERICA, EUROPE, INDIA

weak

BRAZIL Pharmaceuticals, others
strongField of Nail Athlete's footTopical antifungal agent Luliconazole

Main factor (YoY)

Earnings rose due to higher sales resulting from expanded
sales of agrochemicals overseas and improved businesspractices in Japan.

10▲6FY2020“Accounting”

 Agrochemicals＜Expanding sales of agrochemicals overseas＞

・Demand anticipated to continue in FY2020 Q1 due to concerns
about the impact of COVID-19 on distribution

FY2020 1Q
1Q

2Q

3Q

4Q

10---

Note : Figures are expressed in units of 100 million yen andhave been rounded off.

・Demand for herbicides expanded due to stricter regulations in Europe(switching from competitors' products)＜To improve business practices in Japan＞

・Normalized sales according to the time of use and distribution ofAgrochemicals
FY2020/1Q Financial results

16

3. Progress of mid-term management plan BEYOND 300

17

Progress of mid-term management plan BEYOND 300
FY2018 Performance

FY2019 Performance

FY2020 Forecast

FY2020 Target

1st year of BEYOND 300

2nd year of BEYOND 300

Final-year of BEYOND 300

Final-year of BEYOND 300

Consolidated sales

299.3 billion yen

304.1 billion yen

Organic growth

255.0 billion yen

238.8 billion yen

Operating income
margin8.9%

ROE290.0 billion yen

Over 300 billion yen

7.4%

5.5%

10%

8.5%

7.3%

4.8%

10%

36.2 billion yen／year

17.2 billion yen／year

15.0 billion yen／year

100 billion yen／3 years

Capital investment

17.4 billion yen／year

17.2 billion yen／year

15.0 billion yen／year

50 billion yen／3 years

M&A funds

18.8 billion yen execution－－

50 billion yen／3 years

Dividend payout ratio

Dividend payout ratio

Dividend payout ratio

Investment andfinance

Dividend

27.1%

32.5%

49.5%- Via organic growth -Dividend payout ratio

30%(Target for the final year of the plan
after incremental increases)

Organic growth : Aims to reach sales exceeding 300 billion yen with business growth from polymer additives, chemicals and food products.
- Excluding contributions from M&A -FY2020/1Q Financial results

184. For Reference19Established Corporate Slogan

FY2020/1Q Financial results20

FY2020 1st Quarter

Supplemental Documents for
Financial Results Overview
1. Supplementary Data for consolidated Closing of Accounts
2. Management indexes, etc.
3. For Reference21

1. Supplementary Data for consolidated Closing of Accounts

Consolidated Balance Sheet

Consolidated

As of Mar. 31, 2020

As of Jun. 31, 2020

AssetsCurrent assets
2,276
2,196
Fixed assets
1,818
1,793
Tangible fixed assets
1,132
1,190
Intangible fixed assets
163
163
Investment and other assets
522
439
Total assets ①
4,094
3,990
Liabilities
Current liabilities
927
903
Long-term liabilities
661
591
Total liabilities ②
1,588
1,495
Net assets
Shareholders’ equity
2,014
2,011
Capital stock229
229
Capital surplus
199
199
Retained earnings
1,588
1,586
Treasury stock△4△4Accumulated other comprehensive
8888
incomeValuation difference on
6577
available-for-sale securities
Reserve for land revaluation
4242
Translation adjustment△ 101Adjustments for retirement△ 20△ 20Benefits
Minority interests
403
394
Total net assets
2,506
2,494
Total liabilities and net assets
4,094
3,990
Note : Figures are expressed in units of 100 million yen and have been rounded off.

increase/decrease

Unit: 100 million yen△ 80△ 2458△0△ 82△ 104△ 23△ 69
△ 93POINT①Decrease in total assets
Decrease in notes and accounts
receivable - trade△ 104

POINT②
Decrease in total liabilities
Decrease in notes and accounts
payable - trade△ 93△66△ 59△2△2△0011△ 120△9△ 11△ 104

FY2020/1Q Financial results

222. Management indexes, etc.

1 Profitability

Consolidated
yen
200

10%

1508%

1005%

503%

0EPS
ROE
ROA

FY2016FY2017FY2018FY2019¥149.08.9%
7.8%¥149.28.1%
7.4%¥165.88.5%
7.3%¥167.07.3%
5.3%

Forecast forFY2020
¥96.9
4.8%
4.0%0%FY2020/1Q Financial results

232. Management indexes, etc.

2 Dividend payout ratio and dividends

Consolidated

million yen
5,00050%

4,000

40%

3,00030%

2,00020%

1,00010%

0FY2016

FY2017FY2018FY2019Forecast for
FY2020

Dividend（¥）

¥35

¥39

¥45

¥48

¥48

Total Dividend
Dividend payout ratio

3,621
23.5%

4,037
26.1%

4,661
27.1%

4,975
32.5%

4,975
49.5%

0%

Note 1: Dividends in FY2016 include a commemorative dividend of 5 yen in commemoration of the 100th anniversary of our founding.
Note 2: Figures are expressed in units of million yen and have been rounded off.

FY2020/1Q Financial results

242. Management indexes, etc.

3 Research and development costs

Consolidated

million yen
15,00010%

12,000

8%

9,000

6%

6,000

4%

3,000

2%

0
R&D cost
Rate of R&D cost to sales

FY2016FY2017FY2018FY2019Forecast for
FY2020

8,735
3.9%

9,327
3.9%

11,8294.0%

14,398
4.7%

14,2004.9%

0%Note : Research and development expense are expressed in units of million yen and have been rounded off.

FY2020/1Q Financial results

252. Management indexes, etc.

4 Capital investment

Consolidated

million yen
20,00015,00010,0005,0000Capital investment
Depreciation costs

FY2016FY2017FY2018FY201912,077
9,230

15,122
9,666

17,41911,65917,281
14,248

Forecast for
FY202015,00015,000Note : Capital investment and depreciation are expressed in units of million yen and have been rounded off.

FY2020/1Q Financial results

26

3. For ReferenceCore products of each business segments

Business category

Core products
Polymer
Additives

Chemicals

Reportingsegment

Additives for polyolefins, PVC plasticizers/stabilizers, Flame retardants,and others.

Electronics andIT materials

High-purity materials for semiconductors, AFES System and etching agents,
Photo(Light)/heat curing materials, photoinitiators, Imaging materials,and others.

Functional
Chemicals

Epoxy resins, Polyurethanes, Water-borne resins, Surfactants, Lubricant
additives, Kitchen detergent, Cosmetic ingredients, Polypropylene glycol,Hydrogen peroxide and derivative products, Water-swelling sealing materials,
and others.

Food products

Margarines, Shortenings, Oil and fats for chocolate, Oils and fats for frying, Whipping cream,
Kneading cream, Fillings, Frozen pie crusts, Mayonnaise dressing, functional foods,and others.

Life science

Agrochemicals, Agricultural materials, Pharmaceuticals & Veterinary products, Wood preservative,and others.

Other business

Designing of equipment plants, Construction and construction management,
Maintenance of equipment, Logistic services, Warehousing, Leasing of vehicles,
Real estate and insurance business, and others.

FY2020/1Q Financial results

27

Notice on Forecast Performance and Business Plans
The forecast performance and business plans specified in thisdocument have been prepared based on information available
as of the date of publication, as well as on various prerequisites;
therefore, the actual results may differ from these forecasts orplans depending on various factors that may arise hereafter.
In the event of any discrepancy between the Japanese original
and this English translation, the Japanese original shall prevail.

FY2020/1Q Financial results

28