FYE March 2013

Financial Briefing
A Technology and Intelligence Oriented Company
that Turns Wisdom into Business

NAGASE & CO., LTD.
May 27, 2013

◆ Contents ◆• FYE March 2013 Results• FYE March 2014 Earnings Projections• Life & Healthcare Growth Strategies

2

FYE March 2013 Results

3

Consolidated Results• Recovery
Ri overseas demand;indd ¥34.4¥34 4 billi
billion year-on-year revenue growthth• Hayashibara, gain on sale of fixed assets contribute to ¥14.1 billion
net profit (¥5.6 billion increase)(100 millions of yen)
12/03

13/03

Changevs. PY

Published
Figures(2Q Revision)

Gross profit

６,３１８
６
３１８
７１６

６,６６２
６
６６２
８２５

(GP ratio)＜11.3%＞＜12.4%＞ ＜+1.1%＞

SG&A expenses

-５８２

-６７０

８８ １１５％-６７６ 101％

Operating profit

１３４

１５５

２１ １１６％

１６４ ９５％

Ordinary income

１５６

１７９

２２ １１４％１７６ 102％

Net income

８５

１４１

５６ １６６％１３６ 104％@79.62@83.32

Net sales

Exchange rate

３４４ １０５％
１０９ １１５％Growt
h Rate

-￥3.7

６,７１０
６
７１０ ９９％８４０ ９８％＜12.5%＞@78.00* Newly Consolidated Co's: Six total. New Equity Method Affiliates: 11 Total((Per-yeny exchange
g rate impactp
on net sales and operatingpg profit)p)Impact of dollar/yen rate
Impact on 13/03 Actual
Net sales¥4.6 billion+¥17.5 billion
Operating profit¥150 million+¥580 million

4Net Sales by Region (Domestic, Overseas)

N t salesNetl ¥666¥666.2bil
2bil (Domestic ¥361.9bil; Overseas ¥304.3bil)¥34.4bil increase (+5.4%) from the previous fiscal year (Domestic -¥ 4.3bil (-1.2%), Overseas +38.8bil (+14.6%) )Overseas Sales by Region (vs. PY)
OOverseas

D
Domestic
ti

8,000

6,602

3,500

6,662

6,318

3,043
3,000

6,000

2,708
Jan - Dec

Jan - Dec

4,000

2,654

3,043

2,654
,

156
212

2,500

Apr- Mar*

2,000
2,000

3,893

3,663

Apr- Mar

3,619

Apr- Mar
Apr

109%

858

118%

120%

728

Europe and Other
North America

1,500Southeast Asia

Apr- Mar
Apr

0

11/03

170
254

12/03

Overseas

Northeast Asia

1,000

13/03

1,556
Domestic

1,759

113%

500

100%

0

41

42

46

59

58

54

11/03

12/03

13/03

80%

12/03

13/03

60%

40%

20%

- Overseas Net Sales Ratio Increase (42%  46%) Overseas sales contribute more overall; growth inNortheast, Southeast Asia0%

* Overseas subsidiaries align fiscal years beginning FYE March 2013 (January – December changed to April – March)

5

Net Sales by Segment
N S
Net
Sales
l by
b Segment
S
7,000(6,318)

6,000

491

830

1,104

その他：Other
1,161

Life & Healthcare

生活関連： Life&
Automotive & Energy
Healthcare
自動車・エネルギー：
Electronics
2,145
Automotive & Energy
Advanced Materials
電子： Electronics& Processing
加工材料： Advanced
Materials & Functional Materials
1,800
Processing
機能素材： Functional
Materials

2,179

2 000
2,000
1,000

Other

761

4,000

1,771

0

12/03

Net Sales by Segment (vs. PY)
Functional Materials ¥180.0bil (+¥2.9bil, +2%)

716

5 000
5,000

3,000

(100 millions of yen)

(6,662)

13/03■ Increased revenues in the performance chemical business due to increases in coating
raw materials and basic chemical sales (spot business) in Singapore■ Decreased revenues in the speciality chemicals business due to lower sales in raw
materials for industrial oil solutions and fluorochemicals to the auto and textiles markets

Advanced Materials & Processing ¥214.5bil (-¥3.3bil, -2%)
■ Decreased revenues in the colors and imaging business due to lower dyes/additives andinformation printing materials sales; reorg in textile processing agents and other equity
method affiliate
ffbusinesses also contributed to lower decreases■ Higher revenues in office equipment and appliances due to increased plastics sales andhigher molding tools exports in Northeast Asia
■ Lower revenues in functional films and sheets and plastic molding products businessdue to lower performance in liquid crystal polarizer film precision inspection equipment
salesElectronics ¥116.1bil (+¥5.6bil, +5%)

Change in Net Sales by Segment( vs. PY)
(100 millions of yen)

■ Lower revenues in electronics chemicals business due to decrease in semiconductors
and chemicals used in the manufacturer of LCD panels■ Higher revenues in electronics materials business due to increased sales of touch-panel
materials in Northeast Asia

Other

(1)

69
56
(33)
29

(100)

0

100

200

その他：Other
生活関連：LifeLife&& Healthcare
225
Healthcare
Automotive & Energy
自動車・エネルギー：
A t
Automotive
ti & Energy
EElectronics
電子： Electronics
加工材料：Advanced
Advanced
Materials &MaterialsProcessing&
Processing
Functional Materials
機能素材： Functional
Materials
300

Automotive & Energy ¥83.0bil (+¥6.9bil, +9%)
■ Lower revenues in Japan due to the end of eco-car subsidies and lower domestic auto
sales
■ Higher revenues overseas; anti-Japanese demonstrations in China led to lower sales ofautomobile-related
automobile
related materials ; however
however, strong performance in North America and
ASEAN push revenues up overall

Life & Healthcare ¥71.6bil (+¥22.5bil, +46%)■ Consolidation of Hayashibara led to major increase in revenues on the order of ¥24.4
billion■ Higher revenues in the non-Hayashibara
non Hayashibara fine chemicals business due to solid
performance in in vitro diagnostics/medical materials and Nagase ChemteX enzymes■ Lower revenues in the beauty care products business due to decreased sales in existing
mainstay products

6

Gross Profit by Segment
Gross Profit: ¥82.5bil +¥10.9bil +15.3%<GP ratio：12.4% ＋1.1%>(100 millions of yen)

Gross Profit by Segment (vs. PY)

1,000

825
3

716

800

Advanced Materials& Processing

60

-5.3%

¥19.9bil- ¥2.1bil-9.9%¥25.1bil+¥2.2bil+9.8%¥6.0bil+¥1.2bil+25.7%¥18.6bil +¥10.5bil+130.2%<GP Ratio : 9.3%(-0.8%)>

229

251
Electronics

200- ¥0.7bil

186

81
47

400

¥12.4bil<GP Ratio: 6.9%(-0.5%)>5600

Functional Materials<GP Ratio: 21.7%(＋0.9%)>

221

199

131

124

12/03

13/03

Automotive & Energy0<GP Ratio: 7.2%(＋0.9%)>
7 2%(＋0 9%)>Life & Healthcare

Advanced Materials

Functional Materials
機能素材Electronics
電子Life & Healthcare
生活関連

加工材料
& Processing
Automotiveﾈﾙｷ& Energy
自動車・ｴﾈﾙｷﾞｰ
自動車
Other
その他

<GP Ratio: 26.1%(＋9.6%)>

7

Operating Profit by Segment
Operating Profit: ¥15.5bil +¥2.1bil +16.0%<Operating Profit by Segment>(100 millions of yen)
70
62
60

60 62

54

12/03

Operating Profit by Segment (vs. PY)

13/03

Functional Materials¥5.4bil-¥0.8bil-13.6%

Advanced Materials& Processing¥2.3bil-¥0.5bil-19.9%

Electronics¥6.2bil ¥ +0.2bil

+4.6%

50

39

40

29

30

23

20

9

10

7

7

0
(10)

Automotive & Energy ¥0.7bil(20)-¥0.1bil-18.4%

(34)
(36)

(30)

Life & Healthcare(40)¥3 9bil +¥3.2bil¥3.9bil+¥3 2bil +464.1%+464 1%(50)
Functional
Materials

Advanced
Materials &Processing

Electronics

Automotive& Energy

Other,
Life &
Corporate,
Healthcare Eliminations

8Factors Impacting Operating Income (PY(PY Actual vs. CY Actual) (1)

160

140

Impact of change in depreciation
and amortization+¥300 million

Higher Profits in Life & Healthcare Business
Increase due to Hayashibara consolidation +¥3,100 million
Lower profits in Beauty Care Products Business
Decrease in Existing Product Sales
Impact of change in depreciation and amortization +¥100
millionFall in Domestic Profits
Decline in abrasives (semiconductor/HDD markets)
Decline in Overseas Profits
Higher general and administrative expenses inSoutheast Asia
Impact of change in depreciation and amortization+¥200¥200 million(100 millions of yen)+2

Decline in Domestic Profits
Strength in smart phones and tablets,
but weakness in manufacturingsubsidiaries
Higherg
Overseas Profits
Growth in smart phones and tablets
Growth in semiconductor equipment
Impact of change in depreciation andamortization +¥600 million

+32

155

-8
120

+2

-5

134

Decline in Domestic Profits
Weakness in manufacturing
g subsidiaries
Decline in Overseas Profits
Lower sales vis-a-vis game machines inNortheast Asia
Impact of change in depreciation andamortization +¥200 million-1
Lower Domestic Profits
Weakness in energy related business
Higher Overseas Profits
Weakness in China, but increase in
North America and Thailand automotive
related business
Impact of change in depreciation andamortization +¥100 million

100
FYE Mar.
2012
Year-End

Functional
Materials

Advanced
Materials &Processing

Electronics

Automotive& EnergyLife &
Healthcare

Other,
Corporate,
Eliminations

FYE Mar.
2013
Year-End: Positive Factors: : Negative Factors

9

Factors Impacting Operating Income (PY(PY Actual vs. CY Actual) (2)D li i
Declining
B l
BalanceStraight-Line(100 millions of yen)

-1

180
Goodwill, Intangible Assets
Amortization -¥3,000,
million

+18

17
-17

+1

160

+26

-3
CAPTEX Co., Ltd.
Setsunan Kasei Co., Ltd.
FUKUI YAMADA CHEMICAL CO., LTD.
Nagase Techno-Engineering Co.,Ltd. etc+3-4

GC: Smart Phones, TabletsStrong Product Performance

140

120

155
134

100
FYE Mar.
2012
Year-End

Hayashibara(includingNew
goodwill,
Consolidated
intangible
Companies
asset
amortization)

Change in
Depreciation
MethodNAGASE& CO., LTD.

Domestic
Manufacturing

Domestic
Sales
Companies,
Etc.

Overseas

Other,
Corporate,
Eliminations

FYE
Mar.2013
Year-End: Positive Factors: Negative Factors* GC = Greater China

10

Ordinary Income and Net Income
O diOrdinary
Income:I¥17 9bil¥17.9bil+¥2 2bil+¥2.2bil+14 3%+14.3%Net Income:¥14.1bil+¥5.6bil+65.5%((100 millions of y
yen))

200

150

156

179
141

100

85

50

0

12/03

13/03

12/03

Ordinary Income

13/03

Net Income
11

Changes in Major Balance Sheet Accounts(100 millions of yen)

１２/０３

１３/０３

ChangeLiabilities and Net Assets

２９１

４６６

＋１７５

Notes and accounts
payable

１，９７７

１,９６０

- １７

Inventories

４５２

５１８

Other current assets

１０１

Property, plant andequipment

５６７

AssetsCash and time deposits
Notes and accounts
receivable

１２/０３

１３/０３

Change

１，０９１

１,０７９

- １２

Short-term loans

５０１

３５４

- １４７

+ ６６

Other current liabilities

２２３

２２４

＋０

１１１

+ １０

Long-term debt

３８２

３２６

- ５５

６０９

+ ４２

Bonds

-

３００

+３００

１００

１０２

＋２

８１

１０２

＋２０

２，３８０

２,４８９

+１０８

Shareholders’ equity

２，０１１

２,１１７

+１０６

(Portion less treasury
stock, at cost)
Net unrealized holding
gain on securities（- ５４）

(-７１)

(-１６)

１２７

１７９

＋５２

Translation adjustment

- ９１

-１２
１２

＋７９

Stock acquisition rights

１

０

-０

Total net assets

２，１２７

２,３７８

+２５０

(Equity ratio)（45.4%）（46.9%）(+1.5% )

４，５０８

４,８６７

+３５９

Intangible fixed assets

５７４

５５２

- ２１

I
Investmentsini securities
ii

４９０

５６８

＋７８

５３

７８

＋２４

Other fixed assets

Total assets

４，５０８

４,８６７

+ ３５９

Accrued retirement
benefits for employees
Other long-termlong term
liabilities
Total liabilities

Total liabilities and net
assets12Cash Flows◆ Operating Cash Flows:¥18 5 billion net inflow.
¥18.5
inflow Payments of ¥6.3
¥6 3 billion in corporate tax,
tax etc.
etc offset by ¥19.4¥19 4 billion inincome before income taxes and recovery of ¥7.4 billion in depreciation and amortization.
◆ Investment Cash Flows: Sales of ¥3.2 billion in tangible fixed assets offset by ¥12.2 billion intangible/intangible asset
purchases◆ Financing Cash Flows: Inflow of ¥29.8 billion in corporate bond issuance, outflow of ¥16.2 billion in repayment of debt
(100 millions of yen)

１３/０３
Net cash provided by (used in)operating activities

Income before income taxes
Depreciation and amortization
Goodwill amortization
Impairment loss
Working capital
Corporate tax, etc.

+19.4 bil
+7.4 bil+1 6 bil+1.6+1.8 bil+0.1 bil-6.3 bil

+ ５６

- ９５

Purchases of property plant and equipment
P hPurchases
off intangible
i t
ibl fifixed
d assetst
Sales of tangible fixed assets-10.5 bil
-1.7
1 7 bil+3.2 bil

- ８１

+ １１

Inflow from corporate bond issuance
Inflow from long-term debt
Repayment of long-term debt
Payment of dividends+29.8 bil
+4.6 bil-16.2 bil
-3.1 bil＋５６９

Exchange gains related to cash and cash equivalents (including+¥2.4bil)

-１８８

＋１８５
Net cash provided by (used in)investing activities
Net cash provided by (used in)financing activities

１２/０３

Main breakdown

Net increase (decrease) in cash
and cash equivalents＋１２６Increase (decrease) in cash andcash equivalents accompanying
consolidation＋＋９

Nagase Electronics Technology ( Xiamen) Co., Ltd.
Nagase India Private Ltd.
Nagase Tool Matex Co., Ltd., three others

Increase (decrease) in cash andcash equivalents accompanying
changes in fiscal years＋３７Japan +¥0.1bil, Greater China +¥3.8bil, Asean -¥0.5bil
EU +¥0.2bil, North America +¥0bil

Cash and cash equivalents at theend of the period

４５８Cash and cash equivalents on the balance sheet ¥46.6bil ¥0.8bil in certificates of deposit due after three months =¥45.8bil+0.6 bil+0.1 bil+0.1 bil

＋
＋１
―
２８５
13

Earnings of Major Consolidated(Millions of yen)

Net Salesvs. PY

Operating
Profitvs. PYNet Income

vs. PY

423,513
,

97%

2,979
,

116%

6,652
,

87%

Nagase ChemteX Corp.

26,273

97%

2,743

100%

1,382

90%

Hayashibara Co., Ltd.

25,223

-

2,603

-

2,121

-

Totaku Industries, Inc.

7,571

99%

196

84%

185

166%

Total for manufacturing*

89,210

126%

5,899

140%

1,950

115%

Nagase Plastics Co., Ltd.

29 141
29,141

98%

304

112%

159

121%

Nagase Chemical Co., Ltd.

15,805

117%

197

96%

111

107%

8,174

109%

166

93%

96

103%

Total for domestic sales*

79,586

90%

1,248

84%

638

100%

Nagase (Hong Kong) Ltd.

57,467

116%

1,052

134%

798

104%

Nagase (Thailand) Co., Ltd.

29,675

125%

970

122%

730

122%

Nagase America Corp.

23,593

115%

439

109%

274

110%

276,924

119%

5,160

108%

4,111

101%

Company Name
ParentCompany

Manufacturinggcompanies

Domestic
sales
companies
copa es

Overseas
sales
companies

Nagaseg& CO.,, LTD.

Nagase Elex Co., Ltd.

Total for overseas sales** Note) Hayashibara earnings are theoretical earnings after goodwill and intangible asset amortization; impact of taxes not reflected.
* Note) Category totals are the simple sum of figures for each company and do not match consolidated figures.

14

Dividends
Our basic policy is to continue paying a stable dividend to our shareholders in linewith our consolidated results as we improve our earnings power and management
structure. We look to improve per-share dividends based on considerations ofconsolidated payout ratio and consolidated dividend to equity ratio.
(% yen)
(%,
en)

(%)

40

2

30
20
24

22
10

15

18

17

16

16

07/03

08/03

09/03

10/03

26

28

1

10
0

05/03

06/03

Dividend per share (left axis)

11/03

12/03

Payout ratio (left axis)

13/03

14/03
forecast

0

DOE (right axis)
(%)
14/03

05/03

06/03

07/03

08/03

09/03

10/03

11/03

12/03

13/03

Payout ratio

12.3

14.9

17.0

21.8

35.4

27.3

22.1

36.0

23.4

24.5

DOE

0.79

1.06

1.15

1.08

1.07

1.08

1.42

1.52

1.53

1.52

forecast* A year-end dividend for FY ended Mar. 2013 will be discussed at shareholders meeting to be held in June 2013.

15

FYE March 2014 Earnings Projections

16

FYE March 2014 Earnings Projections(100 millions
illi
off yen, except earningi
per share)
h
)

13/03
Actual14/03
Forecast

６，６６２

Net sales

Change７，６４０

vs. PY

+９７７

１１５％
１１３％

８２５

９３４

+１０８

＜12 4％＞＜12.4％＞＜12 2％＞＜12.2％＞＜ 0.2％＞＜0 2％＞

Operating profit

１５５

１９２

+３６

１２３％

Ordinary income

１７９

２１０

+３０

１１７％

Net income

１４１

１４５

+３

１０２％

Dividends per share

¥２６

¥２８

+２円

-

¥８３．３

¥９５．０

-¥１１．７-Gross profit(GP rate)

Assum ed exchange rate($1US)

・ Higher Overseas Profits / Lower Domestic Profits
・ Narrower losses among unprofitable subsidiaries +¥1.3 billion
Impact of actuarial losses for retirement benefit obligations -¥1.5 billion (13/03 -¥0.7 billion)

17

FYE March 2014 Forecast by Segment<Net Sales Forecast by Segment><Operating Profit by Segment>(100 millions of yen)

3,000(100 millions of yen)

13/03
14/03

13/03
14/03

90

90

2,550
2,500
70

63
52

2,000

1,810

50

2,145

50

44

40
32

27

30

1,490

1,500

1,658

13
7

10

,
1,244

1,000

940

840
775

(10)

830
500

(30)

(32)
8

10

0
Functional
Materials

Advanced
Automotive
Life &
Materials & Electronics& Energy Healthcare
Processing
P
i

Other

(40)
(50)
Functional
Materials

Advanced
Materials &Processing
PiElectronics

Automotive& EnergyLife &
Healthcare

Other,
Corporate,
Eliminations
Eli
i ti

* Beginning FYE March 2014, the abrasives sales business for semiconductors and HDD industry (formerly under Functional Materials) will be moved
under the Electronics business segment. Sales business for cosmetics industry (formerly under Functional Materials) will be moved under the Life &Healthcare business. FYE March 2013 results have been recalculated to reflect this change.

18

Operating Profit Change Factors (PY Actual vs. Forecast)

220

Domestic ＋¥100 million
Higher compact power supply
Overseas ＋¥300 million
Increase in auto production
overseas

Domestic ＋¥1,300 million
Stronger performance insmart phones, tablet products
Higher chemicals for LCD
O
Overseas＋¥1 300 million＋¥1,300
illi
Stronger performance insmart phones, tablet products

200(100 millions of yen)
NAGASE & CO., LTD.
Actuarial differences inretirement benefit
obligation-¥800 million

+5

-14
-7

+26
180

Domestic +¥200 million
Higher coating for construction
Overseas ＋¥600 million
Stronger performance inNortheast Asia, Southeast Asia

160
140

Advanced investment for business expansion
Higher Hayashibara costs -¥500 million(Raw material cost, amortization, development costs)
Higher overseas development costs -¥300 million
Beauty Care Products Business
Market Development Costs -¥200¥200 million
Higher amortization in Enzymes business -¥200 million
Generics related
Amortization, Development Costs -¥200 million

+18

+8

192

Domestic ＋¥600 million
Improved profitability at unprofitablemanufacturing subsidiaries
O erseas ＋¥1,100
Overseas＋¥1 100 million
Mainly higher sales of officeequipment and appliance resin
China, Southeast Asia

155

120
FYE
Mar. 2013
ActualFunctional
Materials

Advanced
Materials &Processing

Electronics

Automotive& Energy

Other,
Corporate,
Eliminations

Life &
Healthcare

FYE
Mar. 2014
Forecast: Positive Factors: Negative Factors

19

Progress of Mid-Term Management Plan
[Business Improvements in Target Fields]
1

Fields Using Bio-Related Technologies● Grew sales of core Hayashibara products; launched new products. Revised overseas sales activities to begin global rollout.
● Next-generation agri-industrial bio production conducted with Kobe University and others selected as a continuing program by
the Ministry of Education
Education, Culture
Culture, Sports
Sports, Science & Technology
 Nagase R&D Center takes main role in advancing research and development in bio technologies through this program● Established local entity in Brazil to research bio business markets in the large food and agriculture sectors in South America

2

Fields Using Environment and Energy Technologies● Start of renewable energy feed-in tariff scheme resulted in strong sales of photovoltaic power systems● CAPTEX plant at full production making secondary battery modules for eco-friendly cars
 Compact power supply scheduled for market launch in June 2013; faster rollout of applied development utilizing CAPTEX
technologies

3

Fields Using Electronics Technologies● Global sales, procurement activities for smart phones and tablets resulted in strong component sales for the market● Engineered Materials Systems Inc. (U.S) turns in strong performance of conductive materials sales for tablet electronics
components● Nagase ChemteX (Wuxi) Corp. begins construction of research and development facility to build up product development capacity
meeting local needs[Stronger Management Systems]● Established Investment Guidelines to clarify investment standards; sped up decision-making process; improved post-investment
monitoring● Initiatives to visualize and ameliorate risk for stronger risk management from the standpoint of a manufacturing firm
● Established Regional Operating Centre in Singapore● Group-wide staff exchange and improved human resources systems[Key Indicators]

FY 2012 Actual

FY 2013 Forecast

FY 2014 Target

Net sales¥666.2 billion¥764.0 billion¥800 billion

Operating profit¥15.5 billion¥19.2 billion¥30.0 billion

ROE

6.5%

6.2%

8.0%

20

Investment Results of 「」Investment in manufacturing functions,functions research and development functions,functions technology
and information capacity, and global network for unique strengths and competitive
advantage; improved corporate value through improved quality of business
13%
15%

Overseas Manufacturing Co's
Domestic Manufacturing Co's
Manufacturing ratio

1,000
800

Investment (3 years)

Manufacturing ratio (Net sales)(100 millions of yen)

Schedule

40 0 billion
40.0

10%

¥

600
400

5%

200
0

New IInvestment
Ntt
in Target Fields

0%
01/3

02/3

03/3

04/3

05/3

06/03 07/03 08/03 09/03 10/03 11/03 12/03 13/03 14/03
Forecast¥30.0 billion

37%

Manufacturing ratio (Operating profit)(100 millions of yen)

80

40%
Overseas Manufacturing Co's
Domestic Manufacturing Co's
Manufacturing ratio

60

30%

40

20%

20

10%

0

Actual¥12.0 billion
UpdateExisting
Facilities¥10.0 billion

13/03 Actual¥12.0 billion

0%
01/3

02/3

03/3

04/3

05/3

06/03

07/03

08/03

09/03

10/03

11/03

12/03

13/03

14/03
Forecast

-20

-10%

２１

Earnings and Investment

Investment

Restructure

PromoteExpand,Improve

Improve Businessand Management
Quality

ＷＩＴ２０００

ＷＩＴ21

ＷＩＴ２００８“ CHANGE”” 11¥20,200
million¥23,700
million¥27,700
million¥107,400
million

Accelerate
CHANGE¥40,000
million(100 millions of yen)(100 millions of yen)

8,000

350
Net sales

300

Operating profit

7,000

250
200

6,000
150
100

5,000

50
4,000

01/03

02/03

03/03

04/03

05/03

06/03

07/03

08/03

09/03

10/03

11/03

12/03

13/03

14/03
15/03
Foreca st Foreca st022Life & Healthcare Growth Strategies

Director and Executive Officer,, Life & Healthcare
Osamu Morishita

23

Covered Topics
1. The Business Mission of Life & Healthcare Segment
2 The
2.
Th LifeLif & Healthcare
H lth
B i
Businessandd Future
F t
Direction
Diti
3. The Life & Healthcare Organization
4. Recent Capital Investment for Production
5 Sales Forecast by Division (2012- 2014)5.
6. Hayashibara’s Current Status and Future Outlook
7. The Acceleration of R&D in the saccharide andenzyme business8. The business policies of Pharmaceutical,

Medical Materials and Personal Care

24

Business Mission
NAGASE Value Chain Creation
Electronics
Functional
Materials

Advanced
Materials

Automotive andEnergyLife & Healthcare(Create a business that adapts to market changes; strengthen management systems)‘Contribute to healthier and happier lifestyles’
lifestyles’
Use the Group's trading company functions and Group-wide
corporate management resources to capture markets globally,
growing our business in food and beverages, cosmetics andtoiletries, and pharmaceuticals and medical materials fields
25

Business Fields and Future Direction
1. Open new opportunities in the food industry focusing on saccharide and enzyme
functional materials (From Food to Feed)
2. Stabilize and grow business in pharmaceuticals and medical materials, using formulation,
synthesis and pharmaceuticals functions
synthesis,
3. Expand Hayashibara sales in cosmetics and toiletries from a global perspective; growbusiness value by developing functional materials as a trading company
4. Contribute to food by fostering agribusiness through functional materials (From Food toFeed))
Contribute to Food

Pharmaceutical/
MedicalMaterials
Cosmetics/

Toiletries

Animal/Plant
Markets
Feed

Enzymeec o og es
Technologies

Agriculture

Functional Saccharide
ec o og es
Technologies

Formulationec o og es
Technologies

Feed/Fertilizer/Farming

Peop
ple/Animals, Plants

Foods/
Beverages

Intelleectualpropertyy Catalog

Human
Markets
Food

Pharmaceutical/Medical Materials

Life & Healthcare Business Fields
26Organization Structure
Food Material Div.

Lif & Healthcare
Life
H lth
Products
P d t Dept.
D t

P
Personall CareC
Products
P d t Div.
DiLife & Healthcare
Pharma・Medical Div.
B
Beautyt C
Care P
Products
d t D
Dept.
t

Organization

Markets

Active Fields

Group Manufacturing
Companies

Representative Products

Hayashibara

TREHA® and other functionalsaccharides

Nagase ChemteX

Enzymes for food (Processed)

Kawai Hiryo

Organic fertilizers
fertilizers, processed foodmaterials

Hayashibara

AA2G® and other functionalsaccharides

Nagase ChemteX

Phospholipid and other enzyme
conductors

Nagase Medicals

Anti-cancer drugs

Hayashibara

Maltose Functional Saccharides

Nagase ChemteX

Pharmaceutical ingredients (API)Overseas/Domestic
Food Material Div.

Foods, Agriculture
Domestic

Personal Care
Products Div.

Pharma・Medical Div.

Cosmetics/Toiletries Overseas/Domestic

Pharmaceuticals,
Medical Materials

Overseas/Domestic

Domestic

27

Recent Production Facility Investments
Hayashibara Co., Ltd. (Okayama Prefecture)
New Plant at Fujisaki and Imabo areas(Plant No. 1 scrap and build)
Improved Production Functions* Conceptual Diagram

Stable Supply Efficient Production
Pilot Production for Newly Developed Products
2015 Spring Planned Completion

Nagase ChemteX Corporation (Fukuchiyama Plant)((total floor spacep2,200m2)◆ Kosher, halal certification.
Completion of new enzyme production facilities
Shore up business foundation to expand enzyme sales globally
Groundwork for expanding food and beverage business
Completed End of 2012; Full Operations 2012

Nagase Medicals Co., Ltd. (Itami City, Hyogo Prefecture)◆ Anti-cancer drugs (generics) Vial Injector Production
New Facility Three Floors (Floor Space 1,000m2)
2013 Spring Completed28

Net Sales Forecast by Segment (FY 2012 - 2014)400(100 millions of yen)

350
300
250

2012
2013

200

2014
150
100
50
0

Food Materials (FM)FY 2012 ¥77.5 billion

PM
26.9

Personal Care (PC)

Pharma・Medical (PM)FY 2013 ¥84.0 billion

PM
28.0

FM
30 8
30.8

PC
14.4

FY 2014 ¥92.0 billion

PM
29.8

FM
31.9
PC
18.5

FM
35.2
PC
20.4

* The Life & Healthcare segment is home to the Beauty Care Products Dept., which handles sales of cosmetics and health foods. Earnings andforecasts for this department are as follows:
FY 2012: ¥5.4 billion FY2013 Forecast: ¥5.6 billion FY 2014 Forecast: ¥6.6 billion

29

Hayashibara Current Status and Future
Expand Overseas Sales andShore Up Development Applications
2012 ¥25.0 billion  2014 ¥28.5 billion

EU

GC

Sales Diagram(Monetary Basis)

KOREA
AMERICA

ASEAN

Drugs Foods
Perfumes

EXPORT 3.0

JAPAN 22.030

Promoting Saccharide/Enzyme Business Researchand Development

New Materials
Development

Customer
Support

Application
Ali ti
SupportSt(Customer Support)

New Saccharides/
Glycoside(Highly branchedglucan))g

Saccharide
Materials

New Application
Development(For Functional Living)

Application
Development<Ingredients Long-Lasting
Mouth Feel etc>

Moisturizing,
Nutrition Functions
Physiological Functions,
Agricultural, etc.

EnzymeyLibraryy ((Actinomycetes)y)Industrial Materials
Enzyme Formulation

Production of Enzyme
Reactants

Food, Sanitary,
Agricultural Industries“Phospholipid Products”
Bio-Based Chemical
Developmentp“Unique Modified Enzymes”

31

Hayashibara New Product Project(Highly Branched Glucan)<Highly branched glucan: Polysaccharide materials manufactured using
Hayashibara enzyme technologies>aSt
Starchh (Glucan)(Gl)

Highlyg y branchedglucanadacGlucosedcHayashibara Unique Enzymes

d

c

c

c

c

Projected representation of known components for starch, Highly branched glucan

 A
Announced
d att theth JapanJ
S
Societyi t forf Bioscience,Bii
Biotechnology and Agrochemistry March 26, 2013
“ Effect on limiting
g fattyy accumulation on the liver”“ Effect on limiting lipid disorder after eating”

T the
To
th dietary
di t
fiber
fib market
k t GlGlobalb l expansioni32Formulation

PharmacePeutical/Me
edicalMateriaals Busine
ess

Pharmaceutical/Medical Materials andPersonal Care Business Policies
Formulation(Anti-Cancer Drugs
Overseas Pharmaceutical Ingredients
Diluting Agent
Additives
Chemicals

Pharmaceutical Ingredients (API)
Medical Materials<Lubricant Anti-Inflammatory etc.>
Whitener (AA2G ®)Accelerate Global Expansion

Personal
Care
Business

Expand Foundational Materials
Global Supply Functions

Pharmaceutical/Medical Materials ... Expanding business for anti-cancer and related products byusing formulation technologies
Personal Care ... Strengthen business foundation by developing wider products based on AA2G®

33

A Technology- and Intelligence Oriented
CompanyCopa y thata Turnsu s Wisdom
sdo intoo Businessus essNAGASE & CO.,CO LTDLTD.
http://www.nagase.co.jp

This presentation materials contain forward-looking projections based on assumptions, forecasts,
and plans as of May 27, 2013. Actual earnings may differ from projections due to risks anduncertainties in the future global economy, competitive landscape, currency exchange rates, etc.