NAGASE & CO., LTD.
November 30, 2015

Contents
1. FYE March 2016 Second Quarter Results

P. 3

2. FYE March 2016 Earnings Projections

P.12

3. Global Expansion of the Nagase Epoxy Business

P.24

4 (Reference) Information by Segment
4.

P 40
P.40

Copyright © 2015 NAGASE & CO., LTD.

FYE March 2016 Second Quarter Results

3

Consolidated Statements of Income
Net sales: Higher revenues
revenues, driven mainly by overseas subsidiaries
Operating income: Higher profits due to higher revenues and recording of allowance for
doubtful accounts during the prior fiscal year at a Taiwanese subsidiary
Profit
Profit attributable to owners of the parent: Lower profit due to higher tax expenses(100 millions of yen)

14/09

15/09

ChangeVs. PY

Published
Forecast

Progress
Rate

Net sales

3,727

3,760

＋32

101%

8,230

46%

Gross profit

444

464

＋19

104%

973

48%

<GP ratio>

11 9%
11.9%

12 3%
12.3%

0 4％
＋0.4

―

11 8%
11.8%

―

SG&A expenses

364

363

-1

100%

778

47%

Operatingpg income

79

100

＋20

126%

195

51%

Ordinary income

91

101

＋10

112%

206

49%

Profit attributable toowners of the parent

66

65

-1

98%

121

54%

US$ Exchange rate
(period average)¥103.0¥121.8@¥120―@¥18.8devaluation(Per-yen(Per
yen exchange rate impact on net sales and operating profit)
Impact of dollar/yen rate
Impact on 15/09 Actual
Net sales¥1.4 billion (approx.)+¥27.0 billion (approx.)
Operating income ¥50 million (approx.)+¥1.0 billion (approx.)
Copyright © 2015 NAGASE & CO., LTD.

4

Net Sales by Region (Domestic, Overseas) Continuing trend from PY of growth in ratio of overseas sales to total net sales
Overseas Sales by Region(100 millions of yen)Domestic & Overseas Sales(100 millions of yen, %)国内(左メモリ)

海外(左メモリ)

4,000
49.4%

50.3%

Northeast
Asia

海外売上比率（右メモリ）
2,000

52.5%

Southeast
Asia

1,769

1,769

1 873
1,873

1,972

1,972
83

80
98
128

40%

Europe and Others

1,873

50%

3,000

North
America(V:104 %)152(V:100%)

152

1,500

570
599

(V:95%)

544
30%
,
2,000

1 000
1,000

20%
1 000
1,000

1,812

1,854

1,787

500

10%

0

1 165
1,165

998

1,041

13/09

14/09
15/09
V: Vs. Same Period in Prior Fiscal Year

(V:112%)

0%
13/09

14/09

15/09

0

5

Copyright © 2015 NAGASE & CO., LTD.

Net Sales: Two-Year Comparison (by Segment) Advanced Materials & Processing: Strong sales of plastic resins to the office equipment andgame device industries Life & Healthcare: Strong sales of TREHA™ and other products in Japan and overseas
 Electronics: Lower sales of liquid crystal-related components
N tS
Net
Sales
l by
b Segment
StChange in Net Sales by Segment(100 millions of yen)(100 millions of yen)

4,000
3,500
3,000
,
2,500

3,727

3,760

369

409

519

568

756

653

2,000
1,500

1 240
1,240

1 333
1,333

838

792

14/09

15/09

Other
-0

Advanced
Materials &g
Processing+93

Functional
Materials-46

Life &
Healthcare+40

Electronics-103
Automotive& Energy
+49

3,760

3 727
3,727

1,000
500
0
Copyright © 2015 NAGASE & CO., LTD.

14/09

15/09
6

Gross Profit: Two-Year Comparison (by Segment)
 Higher profits, mainly due to revenue gains at overseas subsidiaries
Gross Profit by Segment(100 millions of yen)
機能素材

加工材料

電子

自動車・
エネルギー
エネルギ

生活関連

その他

500

300

Other
Life &-0
Healthcare+7
Automotivegy& Energy
+3

464
63

444
400

Change in Gross Profit by Segment(100 millions of yen)

Advanced
Materials &P
Processingi+6Electronics
Functional+1
Materials
+1

104

96

48

44

118

116

6,409

200

5,226 5,378
444
113

119

70

71

14/09

15/09

464

5,698

4,445 4,623

100

0
15 /0914/09

7

Copyright © 2015 NAGASE & CO., LTD.

Operating Income: Two-Year Comparison (by Segment) Electronics: Higher profits due to recording of allowance for doubtful accounts during the prior fiscal year at a
Taiwanese subsidiary Advanced Materials & Processing: Higher overseas revenues lead to higher profits Automotive & Energy: Lower profits due to costs related to launching new domestic business

Operating Profit by Segment(100 millions of yen)
機能素材

加工材料

電子

自動車・エネルギー

生活関連

その他・
全社共通

Change in Operating Profit by Segment(100 millions of yen)
Other,
Automotive
Corporate& Energy+2Life &-3
Healthcare
+3

100
100
79
80

13

16

Electronics+13
Advanced
Materials &Processing+3
Functional
Materials
+0

7

10
37

60
23

100

40
22

25

79

20
20

20

- 10

-7

14/09

15 /09

0
(20)
(20)

Copyright © 2015 NAGASE & CO., LTD.

14/09

15/09
8

Earnings at Major Consolidated Subsidiaries
 HayashibaraHhibreportedt d hihigherh nett sales,ldrivendibyb strongtsales
l off TREHA™ tot theth domesticdti anddinternational food industries and AA2G™ to the skin care industry. However, profits were level withthe prior year owing to an increase in depreciation related to the startup of operations at new
production plants.
(100 millions of yen)Company Name

2 120
2,120

94％

17

90％

Manu
ufacturing
Companies

Vs. PY

Hayashibara Co., Ltd.

121

104％

25

99％

Nagase ChemteX Corp.

117

91％

7

70％

481

103％

39

108％

Domestic Sales
nies
CompanVs. PY

Nagase Plastics Co., Ltd.

162

97％

2

113％

Nishinihon Nagase Co
Co., Ltd.
Ltd

40

129％

2

315％

Nagase Chemical Co., Ltd.

79

103％

1

144％

Total for domestic sales (Note)

406

99％

8

178％

Overseas Sales
ompanies
Co

ParentCompanyC

Net Sales

Operating
ProfitShanghai Hua Chang Trading Co., Ltd.

187

116％

5

121％

Nagase (Taiwan) Co., Ltd.

73

80％

5

―

GuangzhougNagaseg
Tradingg Ltd.

155

114％

4

95％

1,858

109％

42

154％

NAGASE & CO
CO., LTD
LTD.

Total for manufacturing (Note)

Total for overseas sales (Note)*Note: Totals for each category are simply the sums of each company. These sums do not equal consolidated figures.
9

Copyright © 2015 NAGASE & CO., LTD.

Consolidated Balance Sheets Shareholders' equity ratio up 0.3 points to 51.8% (vs. 51.5% at end of prior year)

Copyright © 2015 NAGASE & CO., LTD.

10

Consolidated Cash Flows Increase in cash and cash equivalents of ¥2.8 billion. Investment outlays for property, plant andequipment and financial outlays for dividend payments were more than offset by a gain of ¥9.4
billion in cash provided by operating activities.
C h FlCash
Flows(100 millions
illi
off yen))

Copyright © 2015 NAGASE & CO., LTD.

11FYE March 2016 Earnings Projections

12

FYE March 2016 Earnings Projections
 The
Th slowing
l i off theth ChineseChieconomy andd otherth factors
f t
have
h
cloudedl d d theth futuref tdirectionditi off thethAsian economy. We forecast higher revenues and profits for the year due to an allowance for
doubtful accounts recorded during the prior year at a Taiwanese subsidiary, strong performance inour pplastics business overseas, and other factors.
(100 millions of yen)

15/03 Actual

Vs. PY

16/03 Forecast

Net sales

7,597

8,230

108%

Gross pprofit

919

973

106%

<GP ratio>

12.1%

11.8％

―

SG&A expenses

738

778

105%

Operating income

181

195

107%

Ordinary income

203

206

101%

Profit attributable to owners of the parent

113

121

107%

@¥109.9@¥120―

US$ Exchange rate
(period average)

13

Copyright © 2015 NAGASE & CO., LTD.

Net Sales Forecast (by Segment) Advanced Materials & Processing: Sales of plastic resins to the office equipment andgame device industries expected to be strong
 Electronics: Epoxy business expected continuing to perform well
Net Sales by Segment(100 millions of yen)

Change in Net Sales by Segment(100 millions of yen)Life &
Healthcare+56
56
Automotive& Energy
+75

8,230
8,000

7,597

823

Other
-0

Electronics
124
+124

766
1,174
6,000

1,098

Advanced
Materials &Processing
+282

1,624
,
1,499

Functional
Materials
+93

4,000
2,541

8,230

2 824
2,824

2,000

7,597
1 682
1,682

1 776
1,776

15/03

16/03

0
Copyright © 2015 NAGASE & CO., LTD.

15/ 0316 /0314

Operating Income Forecast (by Segment) DespiteD
it increasedid depreciation
d
i ti
and
d amortization
ti ti
associatedi t d with
ith investments,itt we
forecast higher profits due to higher gross profit stemming from higher net sales and therecording of an allowance for doubtful accounts at a Taiwanese subsidiary during theprior year
year.
Operating Profit by Segment(100 millions of yen)
機能素材
電子

Automotive& EnergyLife &-2
Healthcare

加工材料
自動車・エネルギー
195

181

200

Change in Operating Profit by Segment(100 millions of yen)

+2

34

31

20
Electronics
+11

22

150

Other,
Corporate-46755
Advanced
Materials &Processing
Functional+5
Materials
+0

100
48

54

43

44

-19

-24

15/03

16/03

195

50

0

181

(50)
(50)
16/03
15

15/03

Copyright © 2015 NAGASE & CO., LTD.

Investment Results and Manufacturing Business Share Investments
I
t
t and
d financingfi
i tot strengthentth manufacturing
f t i function,fti
R&D ffunction,titechnical/information-related capacity, and global networks will create proprietary/competitive
advantages; improve business quality and corporate value.
Manufacturing Business Share (Net Sales)

13%(100 millions of yen)

1,200
1,000

Overseas Manufacturing Co.

16%

Domestic Manufacturing Co.

14%

Manufacturingg Business Share

12%

800

Investment (16/03 )Forecast

13 9 billion
13.9

10%
8%

600

6%

400

4%
200

16/03 Second Half
Forecast
8.3billion

2%

0

0%
03/3

04/3

05/3 06/03 07/03 08/03 09/03 10/03 11/03 12/03 13/03 14/03 15/03 16/03(予)Forecast

Manufacturing Business Share (Operating Profit)

28％(100 millions of yen)

60

Overseas Manufacturing Co.
Domestic Manufacturing Co.
Manufacturing Business Share

40%
30%

40

20%
20

16/03 First Half
Actual
5.6billion

10%

0

0%
03/3 04/3 05/3 06/03 07/03 08/03 09/03 10/03 11/03 12/03 13/03 14/03 15/0316/03(予)Forecast

Copyright © 2015 NAGASE & CO., LTD.

16

Topics (1) Hayashibara: New Plants Now in Full –scale operation
 In August, we began full – scale operations at plants newly constructed in the Fujisaki district ofOkayama (New Okayama Plant I) next to our research laboratories and in the Imabo district ofOkayama (Okayama Functional Saccharide Plant, S Building). These new plants took overproduction s from the former Okayama Plant II, which is now 70 years old.
old New plants feature thelatest in energy-saving, environmentally friendly technologies<New Plant Concept>
 New OkayamayPlant I:New Products and Production Technology
gy Development
 Okayama Functional Saccharide Plant, S Building: Core Products Manufacturing PlanOkayama Functional
Saccharide Plant, S Building

New Okayama Plant I

Filtering Process(Starch Syrup Production)

Saccharification Process(Maltose Production)
17

Copyright © 2015 NAGASE & CO., LTD.

Topics (2) Hayashibara:
Plant Extension to Increase Trehalose Production
 Extension of Okayama Functional Saccharide Plant
Plant, T Building (Trehalose Production Plant) Investment: 2.6 billion yen
 Expected to increase production capacity by 30% from current 35,000 tons(p.a.) Completion : September 2016

Land selected forconstruction

Okayama Functional
Saccharide Plant, T Building
Copyright © 2015 NAGASE & CO., LTD.

TREHA™, 500g
18

Topic (3) Hayashibara: Launch of New Fibryxa™ Product First new Hayashibara product since the company joined the NAGASE Group Expected to become a major product on the order of TREHA™ On sale November 25
Soluble dietary fiber produced from starch using Hayashibara’s unique proprietary enzymes.
Made with isomaltodextrin as the main component
Improved intestinal microbiota expected to produce a variety of physiological functional
benefits.
Can be compounded into a wide range of foods and beverages.

Isomaltodextrin

Fibryxa™ Powder
Material created through thepower of enzymes
・Starch used as raw material
・Hayashibara's proprietary
enzyme technology

Hayashibara'sH
hib ' ProprietaryP
i t
Enzyme Technology

Splicing Technology
using
sing En
Enzymesmes
St hStarchSoluble Dietary Fiber

Fibryxa™
Various physiological functions
・Improve intestinal microbiota
・Improve bowel movements
・Improve chronic loose stools
・Immunomodulatory activity
・Suppress hyperglycemia

Easily compounded with a wide
variety of foods and beverages
・Highly water-soluble
・Solution is colorless, clear
・Almost no sweetness, no odor
・Low-viscosity solution
・Outstanding stability

19

Copyright © 2015 NAGASE & CO., LTD.

Topics (4) Hayashibara :October 8 (Trehalose Day) Day of Appreciation
 Trehalose Day (certified by the Japanese Anniversary Association) festivities held on October 8
 Nearly 150 individuals supporting Hayashibara in various capacities (local government representatives, financial
institution and vendor representatives, construction representatives, etc.) attended the Hayashibara Day of
Appreciation
 Four-page advertisement placed in the morning edition of the Sanyo Shimbun newspaper

Trehalose Characters
Treha-chan
Trechi Tamochi
Day of Appreciation, October 8, 2015
Session One: Welcome and Introduction

Advertisement placed in the October 8 Sanyo Shimbun
Copyright © 2015 NAGASE & CO., LTD.

Day of Appreciation, October 8, 2015
Session Two: Reception
20

Earnings and Investment

Mid-term
Managementg
Plan

Improve Business,
Management
QualityInnovate

PromoteExpand/Strengthen

ＷＩＴ２０００

ＷＩＴ21
ＷＩＴ
21

ＷＩＴ２００８“ CHANGE
CHANGE”
” 11

202

237

277

1,074

Investment(100 millions of yen)

Net Sales (left axis)
売上高（左軸）O
Operatingti Profit(
P fit( righti ht axis)i )
営業利益（右軸）
Net Income (right axis)
当期純利益（右軸）(100 millions of yen)

8,000

Accelerate“CHANGE”
ContinuePlan

411

139 (100 millions of yen)

300
250

Lehman Shock

200

7,000
000

150
IT Bubble
Collapse

6 000
6,000

100
50

5 000
5,000

0
4 000
4,000

0 1/03 0 2/03 0 3/03 0 4/03 0 5/03 0 6/03 0 7/03 0 8/03 0 9/03 1 0/03 1 1/03 1 2/03 1 3/03 1 4/03 1 5/03 1 6/03
(Forecast)
(見通し)

(50)
-50
50
21

Copyright © 2015 NAGASE & CO., LTD.

Dividends
Total 32-yen dividend scheduled (16 yen interim, 16 yen year-end)（%,yen）

（%）

40

1.6

35

1.4

30

12
1.2

25

1.0

20

0.8

15

0.6

10

0.4

5

0.2

0

Dividend per
Share(left axis)
Payout Ratio(left axis)
DOE (right axis)

06/03

07/03

08/03

09/03

10/03

11/03

12/03

13/03

14/03

15/03

16/03
(F
(Forec(Forecast)
ast)

15

18

17

16

16

22

24

26

28

30

32

14.9

17.0

21.8

35.4

27.3

22.1

36.0

23.4

30.5

33.7

33.6

1.06

1.15

1.08

1.07

1.08

1.42

1.52

1.52

1.50

1.44

1.43

Copyright © 2015 NAGASE & CO., LTD.

0.0

22

The Next Mid-Term Management PlanFollow single-year plan for FY2015; implement new mid-term
management plan beginning FY2016
Create long-termlong term management plan through 2032, Nagase
Nagase'ss 200th anniversary
Our next mid-term management plan will cover five fiscal years
2012

2013

2014

2015

2016

2017

2018 2019 2020

2032

Continue policies

Three-Year Plan

Long-Term
Management
Plan

Planning

Next Mid-Term
M
Managementt
Plan

Five-Year
Five
Year Plan

23

Copyright © 2015 NAGASE & CO., LTD.

Global Expansion of the Nagase Epoxy BusinessElectronic Chemicals Department
Takahiro Okumurag
General Manager
24

Contents
 Electronic Chemicals Department Overview
 Electronic Chemicals Department Target Sectors
 History of the Nagase Epoxy Business Nagase
N
E
Epoxy B
BusinessiO
Organizationi i Electronic Chemicals Department Overseas Production Bases Electronic Chemicals Department Overseas Production Bases:
Future Plans
 Nagase Epoxy Business Sectors and Product Lines Sectors and Main Usage Business Growth Strategy

25

Copyright © 2015 NAGASE & CO., LTD.

Electronic Chemicals Department Overview
Business Model

Marketing and Business Planning

Chemicals, Materials

NAGASE & CO., LTD.

Epoxy resins, adhesives, liquid encapsultants forsemiconductors liquid formulated epoxy
semiconductors,
epoxy, epoxy sheet
materials, conductive paste,
stripping agents, photoresist, developer

Nagase ChemteX Corp.
Nagase ChemteX (Wuxi) Corp.

Eq ipment/Processing
Equipment/Processing
Pac Tech
PackagingTechnologies GmbH
Semiconductor Wafer Bumping
Semiconductor Manufacturing Equipment

NagasegTechno-Engineeringgg Co., Ltd.
Chemical Management System,
Electrostatic Coating System

SynergisticSy
e g st c Businesses
us esses
Silicone resin, urethane resin,joining materials, moldings, dispensers

Department Strengths: Trading company information network plus manufacturingsubsidiaries allow for more in-depth technology sales and development activities
Copyright © 2015 NAGASE & CO., LTD.

26

Electronic Chemicals Department Target Sectors

Infrastructure
Environment
Environment and Energy

Electrical and Electronic Components
Microelectronics and Semicond
Semiconductors
ctorsDisplays
DisplaysCar Electronics

27

Copyright © 2015 NAGASE & CO., LTD.

History of the Nagase Epoxy Business
1962

NAGASE & CO., LTD. begins domestic production of epoxy resins at Amagasaki Higashi Factory

1970

Established Nagase-CIBA Ltd. (now Nagase ChemteX Corporation) jointly with Ciba-Geigy Ltd.

2000

Nagase-CIBA Ltd. reorganized as Nagase ChemteX Corporation with 100% funding from NAGASE& CO., LTD.

2001

Nagase ChemteX,
ChemteX Nagase Chemicals
Chemicals, Teikoku Chemical Industries ,andand Nagase Biochemicals,
Biochemicals infour-way merger to create newly organized Nagase ChemteX Corporation

2002

Joint investment with Nagase ChemteX Corporation to establish Nagase ChemteX (Wuxi)
Corporation (NCW)

2003

ISO 9001 integration; ISO 14001 certification

2012

Nagase ChemteX Corporation acquires all shares of U
U.S.
S epoxy manufacturer Engineered Materials
Systems Inc. (EMS, Ohio), making the company a subsidiary
New construction of a microelectronics materials production building (clean room building)2013

New application lab built at Nagase ChemteX (Wuxi) Corporation2015

Acquired JIS Q9100 certification to expand aircraft-related business

Copyright © 2015 NAGASE & CO., LTD.

28

Nagase Epoxy Business Organization

NAGASE Group
Global Expansion

NAGASE & CO., LTD.

Composite Materials Design
Organic/Non Organic Hybrid
Organic/Non-Organic
Materials Design and NanoMaterials Design

Nagase ChemteX
Corporation

Active Domestic
and International
IndustryGovernmentAcademia Alliances

ResearchandDevelopment
pDesign andTrial
Production

Production
Technologies
Developmentp

Epoxy Compound Design
Conductive Materials DesigngPrecision Organic Synthetics
Quality
Control
Analysisy[Epoxy Resin Compounding Technologies]
High-density filler technologies, compounding technologies
stress-reduction control technologies, rheology control technologies, processing technologies
29

Copyright © 2015 NAGASE & CO., LTD.

Electronic Chemicals Department Overseas Production Bases

PAC TECH USA(Development, Proto Service)

PAC TECH GmbH
(Development, Production)

NCW

EMS

(Development, Production)(Development, Production)[Current] Light Electrical, Structural Materials
Development, Production[Future] Semiconductors, Light Electrical,
Structural Materials
Development,
Productionp[Current] Heavy Electrical, Light Electrical,
Structural Materials
Production[Future] All Sectors including Electronic
Components, Semiconductors
Development, Production

Nagase ChemteX(Development(Development,
Production)

PAC TECH ASIA
(Production)

Nagase Fine Chem Singapore(Production)

Nagase Epoxy Business Net Sales:¥14 1 billion¥14.1
billi ((currently)
tl )Existing Bases for
Epoxy

Chemicals,Services

Copyright © 2015 NAGASE & CO., LTD.

Equipment, Bumping
Services30

Electronic Chemicals Department Overseas Production Bases: Future
Plans
PAC TECH USA(Development, Proto Service)

PAC TECH GmbH
(Development, Production)

NCW

EMS

(Development, Production)(Development, Production)[Current] Light Electrical, Structural Materials
Development, Production[Future] Semiconductors, Light Electrical,
Structural Materials
Development,
Productionp[Current] Heavy Electrical, Light Electrical,
Structural Materials
Production[Future] All Sectors including Electronic
Components, Semiconductors
Development, Production

EU Plant[Future] All Epoxy Sectors
Development,
Production

Nagase ChemteX

ASEAN Plant[Future] Heavy Electrical, Light
Electrical, Structural Materials
Production(Development,(Development
Production)

PAC TECH ASIA
(Production)

South America Plant[Future] Heavy Electrical, Light
Electrical, Structural
Materials
Production

Nagase Fine Chem Singapore(Production)

Existing Bases for
Epoxy

Chemicals,Services

Equipment, Bumping
Services

New Bases for
Epoxy

30

Copyright © 2015 NAGASE & CO., LTD.

Nagase Epoxy Business Sectors and Product Lines

Insulating Materials
NAGASE & CO.,CO LTD.
LTD

Marketing & Sales

Heavy
Electrical Sector

Environment andEnergy Sector

Japan
America
EuropeChina
ASEAN

Adhesive Agents
Casting Agents

Light Electrical Sector((Electrical and Electronic
Components))
Components

EncapsulantpMaterials
Underfill Material

Central and South America
Car Electronics Sector

Mi
Microelectronics
l t
i Sector
S t

Nagase ChemteX
R&D and Production

Jigs
g and Tools,,
Structural Materials

Sheet Materials
Heat Dissipation
SheetS
eet Materials
ate a sLiquid Materials forCompression Molding
UV Light
g Curingg
Epoxy Resins

Copyright © 2015 NAGASE & CO., LTD.

32

Sectors and Main Usages [Heavy Electrical]
L
LargeLarge-scalel transformers,tfinsulators,
i
l t
large
largel-scalel insulatoril t componentst

Heavy
Electrical Sector

Various insulator casting and molding materials used in transformer and power
plant equipment<Smart Grid Concept>
CentralizedPower Sources*S*Source:
Ministry
Mi i t off Economy,ETrade
T d andd Industry
I d t (Study(St d GGroup ffor L
Low-Carbon
C b PPower-Supply
S
l S
Systems,t
February
F b
24,
24 2009)

Electrical,
Information

Transmission System /Demand Area System

Electrical,
Information

End User(Industrial / Residential
Electrical Equipment)

Dispersed
Power Source
Power Circuit
BreakerInsulator
Components

TfTransformer

Epoxy Resin
Usage

I
l t
Insulator

300[Unit: USD billions]200
Annual average growth of 7%

100≪Global Transmission and Distribution Equipment Market Forecast≫
Source: JEMA

2010

2015

2020
33

Copyright © 2015 NAGASE & CO., LTD.

Sectors and Main Usage [Environment and Energy]

Environment
andE
EnergyS t
SectorAerospace

Matrix materials for aircraft and matrix materials for automotive bodies
Adhesives and matrix materials for wind power generation
Structural adhesives for automotive bodies, matrix materials for hydrogenand other highhigh-pressure tanks

Demand Potential for Carbon Fiber Products(Market Growth between 2011 and 2020)

Automotive¥7.0 billion (2011)
13x growth¥22.0 billion (2011)¥91.0 billion (2020)

2.5x growth¥55.0 billion (2020)

Construction

Carbon Fiber
2020 Market Size
¥450.0 billion

Wind Power¥21.5 billion (2011)

Pressure
VesselsPV
l¥5.4 billion (2011)
4.7x growth¥25.2 billion (2020)¥6.8 billion (2011)

4.1x growth¥89.0 billion (2020)

About 4.4x
4 4x
¥30.0 billion (2020)
Source: METI

Copyright © 2015 NAGASE & CO., LTD.

34

Sectors and Main Usage [Light Electrical]
C ti
Casting,sealings
sealings,li, andd adhesives
dh iforf power modules,d lmotors,tcondensers,dLight Electrical Sectortransformers,, reactors
transformers
reactors,, coils, batteries, and other electrical and electronics components(Electrical andElectronic Components)

castings,, seals
castings
seals,, adhesives[Global Market Size and Forecast for Power Semiconductors](U
USD100 Million)

Source: Yano Research Institute[Power Electronics is a Key Technology for the Efficient Generation, Transmission, and Consumption of Electrical Energy]

Transformer

Transformer

Transformer

Transformer

Source: Cabinet OfficeTransformer

Transportation
Equipment

Wind Power
Generation

Transmission andDistribution Network

Home
Appliances

Transformer

Solar Power
Generation

Thermal Power
Generation

35

Copyright © 2015 NAGASE & CO., LTD.

Sectors and Main Usage [Car Electronics]
Car Electronics Sector

HEV/EV electronic components, electrical components, ignition coils
All varieties of sensor encapsulants
encapsulants,, casting, adhesives[Change in Unit Sales for Eco-Friendly and Non-Eco-Friendly
Vehicles (Passenger Vehicles) for Global Four Poles]
2012 Actual

Source: Nomura Research Institute2020 Forecast
54.72 million（ 83.6% ）(10,000 Units)

44.93
44
93 million(96.8%)

Eco-Cars*
Non-Eco Cars
10.70
1070 million( 16.4%)

1.47 million( 3.2%)
Total 46.40 million(100.0%）[R[Regenerative
ti S
Systemt
D
DemanddT
Trends]
d ]
Japan

EU

NAFTA

China

Total 65.42 million(100.0%）*Eco Cars:
Hybrid Vehicles,
Plug-In Hybrid Vehicles, andElectric Vehicles(Does not include fuel-cell vehicles)

Other regions

Units Sold (1,000
0 Systems)

Source: Fuji Chimera Research Institute

ActualEstimate

Short-Term Forecast

Market Size by Area (through 2025)
Copyright © 2015 NAGASE & CO., LTD.

Medium- to
Long-Term
Forecast(Annual)36Sectors and Main Usage [Microelectronics-1]•Liquid semiconductor encapsulation materials for semiconductor packages, OLED

Microelectronics Sector

displays/OLED lights•Encapsulants for electronic components in mobile devices (SAW/BAW filters, inductors, etc.)[S i[Semiconductord t M
Marketk t Hi
Historyt
andd Forecast
Ft byb Region]
R i ] Source:
S
WSTS

FOWLP Forecast
Source: Qualcomm[USD Millioons]

M Unit/Y
2,000
1,500
1,000
500
0

Y2014
[FO-WLP Packaging Method]

Y2015

Y2016

Mold MaterialInterconnect Material-Liquid Molding Compoundp y Sheet-Epoxy-Capillary UF
Pre applied UF (NCP)-Pre-applied

Y2017

Thin Film Material-Low CTE material

Wafer Bump Protection-Liquid Molding Compound

Secondary Underfill-Standard typeyp

Copyright © 2015 NAGASE & CO., LTD.

37

Sectors and Main Usage [Microelectronics-2]
Source: Yano Research Institute（Unit: 1,000）[Global Handset Market Size (Feature Phones + Smartphones)]

2012

2013

2014

2015

2016

2017

2018

2019

2020

(estimate)(forecast)(forecast)(forecast)(forecast)(forecast)Global Feature Phone Shipments
Global Handset Shipments (Total)

Global Smartphone Shipments

Important Electronic Components in
Mobile Phones= SAW Filter =Epoxy Sheet for SAW Filters

Hollow Space
Copyright © 2015 NAGASE & CO., LTD.

38

Business Growth Strategy

Target Ma
arket

Industry

Heavy Electrical

Light Electrical

Car Electronics

Microelectronics

Environment
EnergySectors

Electrical Power
Equipment

Industrial Machinery,
Household Equipment

HEV/EVFCVSmartphones, Tablets,
Lighting

Aircraft, Automotive
EnergyProduct
Usage

Coils,
GroundTransformers
Coils
SIS/GIS

Power Modules

Electronic Components
Power Train
Semiconductors
FPD

Electronic Components
Semiconductors
OLED
E-paper

Airframes
Automotive Bodies
Hydrogen Tanks
Windmills

RegionJapan,
Japan,
Europe,Europe,China,
China,
AsiaAsia

Japan, Europe,
China, Asia

Japan, Europe,
U.S., Asia

Japan, Europe, U.S.,
Asia, China

Japan, Europe,
U.S., China

Customers

Heavy El
HElectricti
Machinery
Manufacturers

Electrical Component,
Electronic Component
Manufacturers

Automotive
Manufacturers
Electrical Component
Manufacturers

Semiconductor
Manufacturers
Electronic Component
Manufacturers

Aircraft Manufacturers
Automotive Manufacturers
Heavy Equipment
Manufacturers
Composites Manufacturers

Cast Molding Materials
Adhesive Agents

Cast Molding Materials
Adhesive Agents

Cast Molding Materials
Adhesive Agents
Encapsulant Sheets/Heat
Dissipation Sheets

Encapsulant Sheets
Heat Dissipation Sheets
Liquid Encapsulation Resin
Liquid Sealing Agents

Honeycomb
Adhesive Agents
Matrix Materials

・ Accelerate Overseas
Expansion

・ Respond to Energy-Saving
Technologies

・ Expand Product Lines to
Respond to Move toward
Digital Technology

・ Respond to Miniaturization
Technologies

Materials

Important
Action Plans(Europe, China, Asia)

Global Market
Size・ Respond to WeightSaving Technologies¥65.0 billion *Nagase Epoxy Business Sales: ¥14.1 billion (currently)

Copyright © 2015 NAGASE & CO., LTD.

39

(Reference) Information by Segment

40

Functional Materials Segment<Net Sales/Operating Profit by Location>FYE March 2016 Second Quarter Earnings(100 millions of yen)
FYE03/15
03/ 5

Operrating profit

Net salesInterim

FYE03/16
03/ 6

Year
ActualInterim

Year
Forecast

Vs. PY

Vs. PY

Domestic

812

1,631

753

93％

1,672

103%

Overseas

221

454

238

108％

526

116%

Eliminations

-195

-403

-200

-

-422

-

Total

838

1,682

792

94%

1,776

105%

Domestic

15

33

15

97%

33

102%

Overseas

5

10

5

108%

11

105%

Eliminations

-0

-1

+0

-

-0

-

Total

20

43

20

103%

44

102%

Net sales¥79.2 billion (94%)◆ The performance chemicals business recorded lower overallsales. While sales grew overseas, domestic weakness inautomotive production led to lower sales of coating materials
and urethane materials.
◆ The speciality chemicals business recorded lower overall sales.
While plastic additives, semiconductor-related products, andother electronics industry-related chemicals sales were strong,sales of p
processing
g oils and other p
products were comparativelypysluggish.

Operating income¥2.0 billion (103%)◆Higher profits, mainly due to improved profit ratios•Figures above are a combination of consolidated entities by location.
locationInter-region eliminations not reflected; adjustments provided in theeliminations column

FYE March 2016 Outlook◇Coating materials and urethane-related business should
recover during the second half of the year in conjunction
with the recovery in automotive production.

41

Copyright © 2015 NAGASE & CO., LTD.

Functional Materials Segment

Performance Chemicals Department
Coating Materials:
Used in automotive bodies, etc.

Performance Chemicals Department
UrethaneU
thMaterials:
M t i lUsed in car seat cushions, etc., due to high adhesion andelasticity.

Speciality Chemicals Department
Denafilter™:
Used to remove contaminants during the film manufacturing process for
LCD panels and other products.
Produced by subsidiary Nagase Filter Co., Ltd.

Copyright © 2015 NAGASE & CO., LTD.

42

Advanced Materials & Processing Segment
FYE March 2016 Second Quarter Earnings<Net Sales/Operating Profit by Location>(100 millions of yen)
FYE03/15
03/ 5

Operrating profit

Net salesInterim

Net sales¥133.3 billion (108%)

FYE03/16
03/ 6

Year
ActualInterim

Year
Forecast

Vs. PY

Vs. PY

Domestic

791

1,618

778

98%

1,678

104%

Overseas

757

1,569

868

115%

1,824

116%

Eliminations

-308

-646

-313

-

-678

-

Total

1,240

2,541

1,333

108%

2,824

111%

Domestic

10

24

11

109%

24

102%

Overseas

11

23

14

121%

29

122%

Eliminations

-0

+0

+0

-

+1

-

Total

22

48

25

116%

54

112%

•Figures above are a combination of consolidated entities by location.
locationInter-region eliminations not reflected; adjustments provided in theeliminations column

 The colors and imaging business recorded higher revenues
as a whole. Despite lower sales of materials for LCD TV
reflectors and conductive materials, sales were higher fordyes and additives, information printing materials, antireflective optical sheets
sheets, and plastic materials
materials.
 The segment’s business selling plastics and other products tothe office equipment etc. recorded higher net sales as awhole. This result was mainly due to gains in Northeast Asia
and Southeast Asia, despite lower performance domestically.

Operating income¥2 5 billion (116%)¥2.5

Higher profits, mainly due to higher net sales

FYE March
M h 2016 Outlook
O tl k◇Sales for business selling plastics for the officeequipment market should continue to be strong
throughout the second half of the year.
year Certain
manufacturing subsidiaries should see improved
revenues.
43

Copyright © 2015 NAGASE & CO., LTD.

Advanced Materials & Processing Segment
Colors & Advanced
Processing Department

Colors & Advanced
Processing Department

Color Formers:
Subsidiary Fukui Yamada
Chemical Co., Ltd.
manufactures ink raw
materials used in thermal
paper for printing receipts,
tickets etc.
tickets,etc

Conductive Material(Denatron):
Anti-static material used infilms manufactured bysubsidiary Nagase ChemteX.

Colors & Advanced
Processing Department

Colors & Advanced
g Department
p
Processing

Anti-Reflective Optical Film:

Anti-reflective optical sheets
used in smartphones, carnavigation systems,
systems etc.
etc

Copolyester Resin(Tritan™):
Copolyester resin withimproved heat resistance to
100 ℃ and greater. Used inglass-like containers.

Polymer Global AccountDepartment
Engineering Plastics:
Used in office equipment
products.

Copyright © 2015 NAGASE & CO., LTD.

44

Electronics Segment
FYE March 2016 Second Quarter Earnings<Net Sales/Operating Profit by Location>(100 millions of yen)
FYE03/15
03/ 5

Operrating profit

Net salesInterim

FYE03/16
03/ 6

Year
ActualInterim

Year
Forecast

Vs. PY

Vs. PY

Domestic

717

1,410

629

88%

1,464

104%

Overseas

408

810

384

94%

940

116%

Eliminations

-369

-721

- 360

-

-780

-

Total

756

1,499

653

86%

1,624

108%

Domestic

19

37

19

100%

38

101%

Overseas

3

19

19

510%

31

162%

Eliminations

-0

-1

-2

-

-2

-

Total

23

55

37

159%

67

120%

* Figuresg
above are a combination of consolidated entities by
y location.
Inter-region eliminations not reflected; adjustments provided in theeliminations column (Including amortization of goodwill).

Net sales¥65.3 billion (86%)

 The electronic chemicals business recorded higher overallsales. Despite lower revenues for chemicals used in LCD
panel manufacturing, sales of epoxy resin-related productsrose.
 The electronic materials business recorded lower sales
overall, mainly due to a decline in revenues for LCD-related
products.

Operating income¥3.7 billion (159%)

 Highergp
profits, mainly
y due to the recording
g of an allowance for
doubtful accounts at a Taiwanese subsidiary during the prioryear.

FYE March 2016 Outlook◇Epoxy resin-related business expected to continue
strong sales during the second half of the year.

45

Copyright © 2015 NAGASE & CO., LTD.

Electronics Segment
Electronic Chemicals Department
Chemicals Used for LCD Panel Manufacturing:
Manufactured by subsidiary Nagase ChemteX. Used in the
manufacturing of LCD panels.

Electronic Chemicals Department
Epoxy Resins:
Manufactured by subsidiary Nagase ChemteX
ChemteX. Used in avariety of industrial sectors, including sealants forsemiconductors, optical component materials for displays, andadhesive agents used in everything from construction andbuilding materials to electrical equipment
equipment, electronics
electronics,
automobiles, ships, and wind power generation.

Electronic Materials Department
Materials for LCD-Related Products:
S l off display
Sales
di l deviced i peripherali h l componentst andd ttouchhpanel materials for smartphones and tablet PCs.
Copyright © 2015 NAGASE & CO., LTD.

46

Automotive & Energy Segment<Net Sales/Operating Profit by Location>(100 millions of yen)
FYE03/15
03/ 5

Net salesInterim

FYE03/16
03/ 6

Year
ActualInterim

Year
Forecast

Vs. PYFYE March 2016 Second Quarter Earnings
Net sales

Vs. PY

Domestic

270

553

262

97%

553

100%

Overseas

348

759

414

119%

839

111%

Eliminations

-99

-214

- 108

-

-219

-

Total

519

1,098

568

110%

1,174

107%

Domestic

-0

0

-4

-

-2

-

Overseas

11

22

11

101%

22

100%

Eliminations

+0

-1

+0

-

-0

-

Total

10

22

7

67%

20

90%

¥56 8 billi¥56.8
billion (110%)

 The automobile-related business recorded higher net sales
overall. While sales in Japan were weak due to lower
automobile production, the markets in the Americas, China,
anddS
Southeasttht AsiaA i were strong.
t The energy business recorded higher net sales as a whole,driven by growth in solar power-related products and lithium
y products.
ion battery

Operrating profit

Operating income•Figures above are a combination of consolidated entities by location.
locationInter-region eliminations not reflected; adjustments provided in theeliminations column¥700 million (67%)

 Lower profits due to costs related to the launch of new
businesses in JapanFYE March 2016 Outlook◇Recovery in automobile production during the second
half of the year should lead to increased net sales forautomobile-related products.

47

Copyright © 2015 NAGASE & CO., LTD.

Automotive & Energy Segment

Automotive Solutions Department
Resins (Polycarbonate): Used in headlights and other applications.
Resins (PP): Used in bumpers and other applications.

Automotive Solutions Department

Resin (PCABS, etc.), Decorative Films: Used in/around
instrument panels and dashboards.

Automotive Solutions Department

Floorboard Manufacturing: Performed by an affiliatedcompany.

Copyright © 2015 NAGASE & CO., LTD.

48

Life & Healthcare Segment<Net Sales/Operating Profit by Location>FYE March 2016 Second Quarter Earnings(100 millions of yen)
FYE03/15
03/ 5

Net salesInterim

Net sales

FYE03/16
03/ 6

Year
ActualInterim

Year
Forecast

Vs. PY

Vs. PY

Domestic

459

950

490

107%

1,014

107%

Overseas

57

124

63

110%

133

107%

Eliminations

-148

-309

-144

-

-324

-

Total

369

766

409

111%

823

107%

Domestic

28

62

29

103%

63

101%

¥40.9 billion (111%)

 The life & healthcare products business recorded sales gains
as a whole. Sales were higher for our proprietary TREHA™
and other products to the food materials industry in Japanand overseas.
overseas In the skin care and toiletries field
field, thebusiness recorded higher sales of our proprietary AA2G™
and raw materials.
 The beauty care products business experienced lower
revenues due to slow sales of existing products.

Operrating profit

Operating income

Overseas

0

2

1

197%

3

106%

Eliminations

-16

-33

-14

-

-32

-

¥1.6 billion (125%)

 Higher profits due to higher net sales and abandonment of
unprofitable businesses

FYE March 2016 Outlook◇Sales of raw materials to the skin care and toiletries industries

Total

13

31

16

125%

34

* Figuresg
above are a combination of consolidated entities by
y location.
Inter-region eliminations not reflected; adjustments provided in theeliminations column (Including amortization of goodwill).

108%

should continue to be strong throughout the second half of theyear.
◇Sales of anti-cancer drugs and other medical-related businessproducts expected to be strong.
49

Copyright © 2015 NAGASE & CO., LTD.

Life & Healthcare Segment
Life & Healthcare Products Department
TREHA™:
Manufactured by subsidiary Hayashibara Co., Ltd. TREHA™ is a sweetener
functional saccharide that slows quality degradation caused by freezing or
drying. A sweetener used for a wide variety of processed foods including
traditional Japanese and western confections..

Life & Healthcare Products Department
AA2G™:
Manufactured by subsidiary Hayashibara Co., Ltd. AA2G™ is a stabilized
vitamin C, produced by combining unstable vitamin C with glucose. Used indomestic and overseas whitening cosmetics due to its stability
stability, resistance tostaining, and promotion of vitamin C bioactivity.

Life & Healthcare Products DepartmentpPharmaceuticals and Medical Field:
Conducts sales of pharmaceutical raw materials and intermediates; subsidiary
Nagase Medicals Co., Ltd. engaged in the manufacture of anti-cancer drugs.

Beauty Care Products Department
Cosmetics Materials:
NAGASE & CO.,CO LTD.
LTD iis engaged
d iin ththe sales
l off cosmetics
ti materials.
t i l
Subsidiary Nagase Beauty Care Co., Ltd. is engaged in the manufacture andsale of cosmetics and health foods.
Copyright © 2015 NAGASE & CO., LTD.

50

http://www.nagase.co.jp

These presentation materials contain forward-looking projections based on assumptions, forecasts, andplans as of November 30, 2015. Actual earnings may differ from projections due to risks and uncertainties
in the future global economy
economy, competitive landscapelandscape, currency exchange rates
rates, etc
etc.