FYE March 2012

Second Quarter Financial Briefing
The Technology and Intelligence Oriented Company
that Turns Wisdom into Business

Nagase & CO., LTD.
November 21, 2011

◆ Contents ◆• FYE March 2012 Second Quarter Results• FYE March 2012 Earnings Projections and
Mid-Term Management Plan "CHANGE 11" Update• Bio Business Growth Strategy~Agreement to Sponsor the Reorganization of Hayashibara Co., Ltd.
and Group Companies ~2

FYE March 2012 Second Quarter Results

Consolidated Results
Lower revenues and profits due to March 11 earthquake, yen valuation; still met profit targets(100 millions of yen)

10/09

11/09

Changevs. PY

Budget(Orig. Forecast)

Net sales

3,313

3,084

-228

93%

3,150

Gross profit（GP ratio）
Selling, general andadministrative expenses

370(11.2%)

357(11.6%)

-12

97%

352
(11.2%)

-264

-279

-15

106%

-275

Operating profit

105

77

-27

74%

77

Ordinary income

113

92

-21

81%

85

Net income

68

54

-14

79%

54

¥53.29¥42.04

Net income per share
New consolidated companies:

Fukui Yamada Kagaku Kogyo Co., Ltd., Sofix Corporation (U.S.), CAPTEX Co.,
LTD., Nagase Filter Co., Ltd.

4

Net Sales by Region (Japan, Overseas)
Net sales ¥308.4 bil (Japan ¥79.9 bil; Overseas ¥128.5 bil) ¥22.8 bil YOY decrease
3,500（3,225）（3,313）

1,350

1,349

Overseas（3,289）(Japan -¥16.3 bil, Overseas -¥6.4 bil）

Japan

(3,084)

3,000
2,500

1,358

1,285

2,000

Overseas Sales by Region (vs. PY)

Jan Jun

1,500

1,600

1,000

1,400

1,963

1,875

1,930

1,799

500

Apr Sep(1,349)
81
103

1,200
1,000

0
2009 2H2010 1H

2010 2H2011 1H

390

800(1,285)
75
108
371

Japan

41

42

42

国内・海外構成比

80%

42

60%

40%

58

59

2009 2H2010 1H

58

58

2010 2H2011 1H

北米 America
North
北東アジア Asia
Northwest

400

100%

欧州・他

Europe and others

東南アジア Asia
Southeast

600
Overseas(100 millions of yen)

774

729

10/09

11/09

200
0

- Overseas Net Sales Ratio Increase (41%→42%) -20%

Eliminating the year-on-year impact of the yen valuation
increase (approx. 10%), real overseas net sales for theperiod ended September 2011 rose an additional 2%.

0%(Ref.) USD-JPY Avg. Exchange Rate 2009-2011
2009
Ave.

2010

2011

1-3

1-6

1-9

1-12

1-3

1-6

1-9

1-12

1-3

1-6

1-9

95.20

95.98

94.92

93.72

90.75

91.02

89.02

87.32

82.33

81.78

80.21

Exchange
米ﾄﾞﾙ平均ﾚｰﾄ
Rate

1-12
(Forecast)
（見通し）

79.30

5

Net Sales by Segment
Net Sales by Segment(100 millions of yen)

4,000

3,000

(3,313)256(3,084)
224

593
2,000

Other

Life Sciences
Electronics

518

Plastics
Chemicals

1,100

1,053

1,000

1,358
0

11/09

Change(vs. PY)
Other-32

Life Sciences-75

Plastics
Chemicals

-73

-80

Electronics ¥-51.8 bil (-¥7.5 bil, -12.7%)■Withdrew from domestic liquid crystal-related components processing
business■ LCD films/ touch-panel modules increased■Chemicals for semiconductors and LCD panels decreased■Formulated epoxy resins increased for heavy electric machinery/mobile
phonesElectronics
-47

-100

Chemicals ¥128.4 bil (-¥7.3 bil, -5.4%)■Coating raw material sales increased;urethane materials to the automotive industries, plastic materials andadditives decreased■Dyes/additives, information printing materials mostly flat;
functional color pigments for display-related applications, dyestuffs for fiber
processing industries, fiber processing agents decreased■Surfactants/raw materials for industrial oil solutions increased;
precision abrasive materials/organic products/fluorochemicals decreased
Plastics ¥105.3 bil (-¥4.7 bil, -4.3%)■Office equipment, appliance net sales (mainly exports to China) decreased■Automotive materials decreased■Mainstay products in functional films and sheets, plastic molding products
decreased■Northeast Asia decreased, Southeast Asia/North America decreasedslightly

1,284

10/09

Net Sales by Segment(vs. PY）

-60

-40

-20

Life Sciences ¥22.4 bil (-¥3.2 bil, -12.6%)■Pharmaceutical raw materials/intermediates, daily commodities andagricultural chemical-related businesses decreased■Enzymes and fermentation products decreased■Beauty care products business declined (strong sales of new products
offset by lower health foods sales)

06Gross Profit by Segment
Gross Profit: ¥35.7 bil -¥1.2 bil -3.3%(100 millions of yen)

370

10/09

ChemicalsElectronics
Other

357

Gross Profit by Segment (vs. PY)
Chemicals¥11.8 bil

- ¥700 mil -5.6%

Plastics¥9.2 bil- ¥600 mil -6.4%

Electronics¥10.5 bil

+ ¥400 mil +4.5%

Life Sciences¥3.7 bil- ¥200 mil -6.6%

11/09

Plastics
Life Sciences

7

Operating Profit Change Factors(100 millions of yen)

110

-8

100

-3
90

105

- 15

80

-2
77

70
Sep FY10

Drop in
Domestic
Sales

Drop inOverseas
Sales

Other
Selling, generalandadministrative
expenses
increases

Eliminations

Sep FY11

8

Operating Profit by Segment
Operating Profit: ¥7.7 bil -¥2.7 bil -26.0%<Operating Profit by Segment>(100 millions of yen)

49
40

10/09

39

Chemicals¥3.9 bil-¥1.0 bil

-20.4%

Plastics¥1.6 bil-¥900 mil -35.5%

Electronics¥3.1 bil+¥1.0 bilLife Sciences¥300 mil-¥200 mil -40.6%

29 31

25
20

11/09

Operating Profit by Segment (vs. PY)

16
5

3

+6.4%

0

-5
-13
-20
Life
Chemicals Plastics Electronics Sciences

Other

9

Ordinary Income/Net Income(100 millions of yen)

Ordinary Income： ¥9.2 bil-¥2.1 bil

-19.1%Net Income:-¥1.4 bil

-21.1%

10/09

11/09

Ordinary Income¥5.4 bil

10/09

11/09

Net Income

10Changes in Major Balance Sheet Accounts
Inventories (non-consolidated and overseas) increased《Assets》
Cash and time deposits

11/03

11/09

Change(100 millions of yen)

《Liabilities and Net
Assets》
Notes and accounts
payable

11/03

11/09

Change

1,016

1,005

-11

Short-term loans

161

239

+77

+83

Other current liabilities

206

190

-16

77

+4

Long-term debt

105

54

-50

399

422

+23

Accrued retirement
benefits for employees

72

80

+7

36

36

-0

Other long-term
liabilities

96

84

-11

Investments in securities

507

466

-40

Shareholders' equity

1,959

1,995

+36

Other Property, plant andequipment, at cost

37

39

+2

（portion less treasury
stock, at cost）

(-54)

(-54)

（-0)

Net unrealized holding
gain on securities

131

111

-20

Translation adjustments

-76

-78

-2

Stock acquisition rights

2

1

-1

Minority interests

75

77

+1

Total net assets

2,093

2,107

+14

(Equity Ratio)(53.7%)(53.9%)(+0.2%)

3,753

3,763

+9

472

445

-26

1,861

1,824

-37

Inventories

367

450

Other current assets

72

Property, plant andequipment

Notes and accounts
receivable

Intangible fixed assets

Total assets

3,753

3,763

+9

Total liabilities and Net
Assets11Cash Flows
Despite an increase in working capital due to increase in inventories, income before income taxes of ¥9.4
billion and other factors led to a net ¥1.7 billion in net cash provided by operating activities.
Purchases of tangible/intangible fixed assets resulted in a net outlay of ¥4.9 billion in net cash used ininvesting activities.
(100 millions of yen)
Major Factors

11/09
Net cash provided by (used in)operating activities+17

Net Income before Income Taxes
Depreciation and amortization
working capital
Income Tax

10/09¥9.4 bil¥3.3 bil-¥5.4 bil-¥4.4 bil

Purchases of property, plant and equipment

Net cash provided by (used in)investing activities-¥3.4 bil-49

Net cash provided by (used in)financing activities

-0

+24

-58

Increase in short-term loans
Decrease in long-term debt

¥2.6 bil-¥600 mil

+25

Net increase (decrease) in cash
and cash equivalents

-32

-15

Increase in cash and cash
equivalents accompanying
consolidation+1+2

Cash and cash equivalents at
beginning of the year

44-

Cash and cash equivalents on balance sheet ¥44.5 bil- ¥500 million in certificates of deposit due after threemonths = ¥44.0 billion

414

12

Earnings of Major Consolidated Subsidiaries(Millions of yen)Company Name

NonConsolidated

Mfg.
Companies

Overseas
Sales
Companies

vs. PY

Operating
Profitvs. PYNet Income

vs. PY

Nagase & Co

217,111

94%

1,770

56%

6,154

134%

Nagase ChemteX

14,159

90%

1,590

72%

903

69%

Totaku Industries Inc.

3,777

108%

136

113%

105

86%

36,438

104%

2,481

88%

1,336

77%

Nagase Plastics Co., Ltd.

15,346

115%

191

189%

110

126%

Nagase Colors & Chemicals
Co., Ltd.

7,011

92%

46

37%

27

28%

Nagase Chemical Co., Ltd.

6,782

98%

114

102%

62

98%

*Total: Domestic Sales
Companies*

47,541

103%

733

111%

440

84%

Nagase (Hong Kong) Ltd.

21,515

81%

328

43%

270

42%

Nagase (Thailand) Co., Ltd.

12,583

103%

516

92%

374

94%

Shanghai Nagase Trading
Co., Ltd.

11,817

123%

161

75%

119

80%

*Total: Overseas Sales
Companies*

113,116

97%

2,590

73%

2,157

80%

*Total: Mfg. Companies*

Domestic
Sales
Companies

Net Sales* Totals in each category are simple calculations for each company; these figures do not reflect consolidated totals.

13

FYE March 2012 Earnings Projections

FYE March 2012 Earnings Projections(100 millions of yen)

12/03
Forecast

First-Half
Results

Second-Half
Estimate

12/03
Forecast

11/03
Actual

vs. PYNet sales

6,600

3,084

3,216

6,300

6,602

96%

Gross profit

734

357

362

719

730

98%

Operating profit

180

77

78

155

187

83%

Ordinary income

190

92

78

170

206

82%

Net income

120

54

46

100

128

78%

Dividends per share

¥24

¥12

¥12

¥24

¥22

Assumed Exchange
Rate ($1US）

¥81

¥79.3

-

-

-

* Estimating an Oct-Dec 2011 exchange rate of $1US=¥76.66* Results for the three Hayashibara companies are not reflected.

15

FYE March 2012 Forecast by Segment<Net Sales Forecast by Segment><Operating Profit Forecast by
Segment>(100 millions of yen)(100 millions of yen)

3,000
11/03

12/03

2,560

2,000

12/03

77

2,500
2,702

11/03

90

70

2,170

90
63

2,221

58

50
47

1,500

36

30
1,090

1,000

1,166

7

10
9
470

500
502

9

0
Chemicals Plastics

Electronics

Life
Sciences

-19

-10

-28

10

Other

-30
Chemicals Plastics

Electronics

Life
Sciences

Other

16

Mid-Term Management Plan
"CHANGE 11" Update

The Future Imagined by "CHANGE 11"
Management Philosophy
Acknowledge that we are a part of the social structure, and that byhonestly pursuing the right path to growth through offering goods
and services demanded by society, we can provide improved
employee welfare and make a contribution to society

Our Future(For Customers)
See future changes in the market
structure/environment, providing uniquesolutions that lead to growth for ourcustomers and for Nagase & Co.

(For Employees)
Use business as a means to help
employees reach their dreams and ideals(For Shareholders/Investors)
Continue to grow and increase the valueof our businesses, building our on
strengths in technology(For Society)Contribute to a better society and ahealthier environment

18

"CHANGE 11" Basic Strategy

Need to Change

・ Mfg. Co. Revenue
Growth・ Higher ratio of overseas
sales
・ Increase no. of overseas
workers

Awareness of the

Changes w/in Group

Improve the Quality ofBusiness and Management

・ Corporate Ethics
Major External
・ Environment/
Environment Changes Resource Issues

Basic Strategy

Management Philosophy（Honestly Pursue the Right Path）

19

Major "CHANGE 11" Policies
1

Selection and Focus in Business

2

Pursue Environment-/Energy-Related Technologies

3

More Focused Research and Development,
Manufacturing Function

4

Continued Globalization

5

Stronger Risk Management

6

Promote Workforce Diversity and Work-Life Balance
20

"CHANGE 11" Progress
1

Selection and Focus in Business● Agreement to Sponsor the Reorganization of Hayashibara Co., Ltd. and Group Companies

2

Pursue Environment-/Energy-Related Technologies● Work toward practical bio-processes to reclaim rare metals● Start construction of new CAPTEX Co., Ltd. plant (Okazaki Plant)

3

More Focused Research and Development, Manufacturing Function● Establish coating lab in India● Start construction of new production line at Nagase ChemteX

4Continued Globalization● Nagase Singapore to open Australia branch

5

Stronger Risk Management● Establish Nagase Business Management and Planning (Shanghai) Co., Ltd., in Shanghai

6

Promote Workforce Diversity and Work-Life Balance● Continue department/work-unit programs led by the Diversity Promotion Committee

21

"CHANGE 11" Numerical Targets (1)ChangePromoteExpand/Improve

ＷＩＴ２０００

ＷＩＴ21

ＷＩＴ２００８

Investment ← ¥20.2 bil→

Improve Quality ofBusiness and Management“CHANGE 11”

Original Target
Net Sales¥ 720.0bil
Operating Profit¥15.0 bil

← ¥23.7 bil→ ← ¥ 2 7 . 7 b i l → ← ¥ 3 0 . 0 b i l →(100 millions of yen)(100 millions of yen)

Net Sales
Operating Profit

22

"CHANGE 11" Numerical Targets (2)Investment (Three-Year)

Mfg. Ratio (Net Sales)

Forecast(100 millions of yen)

14%

Overseas Mfg.
Domestic Mfg.
Mfg. Ratio

800¥101.2bil

12%
10%

600

12/3
Forecast

8%
400

6%

200

0

4%

Initial Plan

2%

¥30.0 bil

¥10.8bil+ ¥70.0bil

New Investment inEnvironment/Energy

11/3 Actual¥20.0bil¥9.7bilUpgrade Existing PPE

10/3 Actual¥10.0bil¥10.7bil

0%
01/3

02/3

03/3

04/3

05/3

06/3

07/3

08/3

09/3

10/3

11/3 12/3 (plan)Mfg. Ratio (Operating Profit)(100 millions of yen)
40%

Overseas Mfg.
Domestic Mfg.
Mfg. Ratio

60

30%

Environment-/Energy-Related Net Sales
Ratio

40
20%

Environ
ment
16.0%

20
10%
0
01/3
-20

02/3

03/3

04/3

05/3

06/3

07/3

08/3

09/3

10/3

11/3

12/3
(plan)

0%

Other
84.0%

-10%

FYE March 2010

FYE March 2012 (plan)

23

Bio Business Growth Strategy～Agreement to Sponsor the Reorganization of
Hayashibara Co., Ltd. and Group Companies～

Mitsuru Kanno
General Manager
Fine Chemicals BusinessNagase Business Portfolio Topics
Nagase Group Mid-Term Management plan "CHANGE 11"
Focus (Automotive Electronics Life Sciences)
Current Status of Life Sciences Business (March 2011)
Life Sciences Business
Net Sales Ratio 7.6% (consolidated)
Operating Profit Ratio 4.6% (consolidated)

Net Sales
Operating
Profit<Life Sciences Business>
 Bio (Enzymes) Business Pharmaceutical/ Intermediates/Agricultural Business Cosmetics and Health Foods BusinessLong-term strategy must be to transition from a petrochemical-reliant
business to a business based on bio-derived technology/products.

Focus on our bio-business as the foundation for future growth25

Bio Business
Application in Industry Today
MarketPenetration

Bio Feedstock
Replace oil and gas
with biomass

PharmaIndustrial

Bio Processes
Replace chemical
synthesis withfermentation andbiocatalytic methods

Agri

Bio Products

Today

Time

New functional
products (biopolymer,
enzymes, health food
raw materials)

Source: White BioTechnology, Mckinsey & Company

26

Changes in the Nagase Enzyme Business
Seventy Years of Product Development in the
Nagase Enzyme Business～ The Beginning of a New Story
Years

1939
~1950

1951
~1960

Product

Amylase

Amylase(liquid
culture)

1961
~1970

Alkaline
protease

1971
~1980

GlucoseWheat βisomerase amylase→soybeanHeatresistant α ProteaseamylasegranulesCatalase

Technology Glucose
production
process

Exported
immobilized
Liquidsubmerged cell culture
fermentation technology
to India

1981
~1990

UreaseASO

Exported
proteaseproduction
technology to
the USA

1990
~2000

2001
~2010

AlgaeProtopectinase
derived DHA
Lactase
Chitinase
Enzymeproducts

Work with
Streptomyces

27

Features of the Hayashibara Group and Nagase
Bio Businesses
Value Chain
R&D

Marketing Application
Development Sales

Mfg.
functions

Nagase Group

Fine Chemicals Business
Overseas Entities

Nagase ChemteX (rawchemicals)/Nagase R&D
CenterEnzymes

Application
Development

Actinomycete Technology

Global Growth

EnzymeReactants

Downstream
Productization

Hayashibara
Group

Enzymes
Enzyme Reactants

Need tostrengthen
the value
chain

Domestic Growth

Product Capacity

Application Development
Domestic Growth
GlobalGrowthSaccharinity,
Perfume/Cosmetics, Health care

Health Care
(Interferon/Pharmaceuticals)

Hayashibara Shoji, Inc.

Hayashibara Co., Ltd./Hayashibara Biochemical Laboratories, Inc.

28

Overview of Sponsorship Agreement with
the Hayashibara Group
Sponsorship Agreement Overview
Contribution
Contribute ¥70.0 billion, for the restructuring of the three Hayashibara
companies.
Transferred Businesses/Assets
・R&D/manufacturing/sales for raw foods, perfume and cosmetic
materials, pharmaceutical materials and functional colorants businesses
・Business assets of the three Hayashibara companies
・Corporate philanthropy (anthropoid research/paleontology research/art
museum)Merger of the three Hayashibara Companies
Followed by a 100% capital reduction, and receipt of all newly issued
shares. New entity becomes a wholly owned subsidiary.
29

Overview of the Three Hayashibara Companies (1)Hayashibara Co., Ltd.

Hayashibara Shoji, Inc.

Hayashibara Biochemical Laboratories, Inc.

1-2-3 Shimoishii, Kitaku, Okayama

1-2-3 Shimoishii, Kitaku, Okayama

1-2-3 Shimoishii, Kitaku, Okayama<Business
Lines>

Manufacturing of raw materials forfoods, pharmaceuticals and chemicals

Starch saccharification of maltose,trehalose, pullulan, etc. forpharmaceuticals and foods

Manufacturing and sales of raw materials forpharmaceuticals, cosmetics, chemicals(functional colorants); manufacturing and salesof research reagents, general pharmaceuticals,
cosmetics<Established>

July 1932

April 1962

September 1970¥100 million¥10 million¥50 million

288

96

235

<Head Office><Commonstock><No. of
Employees><BranchOffices>Tokyo Branch Office/ Osaka Branch
OfficeSapporo, Sendai, Niigata, Utsunomiya,
Yokohama, Nagoya, Kanazawa, Kobe,
Okayama, Fukuoka,
L Plaza, C Plaza<Sales Offices><Plants>

Okayama No. 1 Plant, Okayama No.2
Plant,Okayama Functional Saccharides
Plant

Yoshibi Seiyaku Plant, Fujita Plant, Fujita Seizai
Plant

<R&D
Facilities>

Research Center (Carbohydrate Research Dept,
Pharmaceutical Research Dept, Basic Cell
Research Dept, Photosensitive Pigment
Research Dept, Tokyo Research Lab),
Anthropoid Research Center , Paleontology
Research Center<Other >Patent Center, Development Center,
Cosmetics/Pharmaceuticals & Chemicals Center30

Overview of the Three Hayashibara Companies (2)Net sales:¥31.0 billion (approximately ¥29.0 billion in Life Sciences field)(Total of Hayashibara, Hayashibara Shoji, Hayashibara
Biochemical Laboratories for FYE October 2010)

No. of Employees:

Approx. 620

Main products:

Food materials:
Net Sales
trehalose,
Composition
maltose (sweetener),other functional saccharides Functional Colorants
Cosmetic materials:
stabilized vitamin C (AA2G) Health Care

Main Plants：

Okayama No. 1, No. 2,
Functional Saccharides Plants

Other

Perfumes/Cosmetics

Transactions with Nagase： Nagase net sales (enzymes, etc.)
approx. ¥100 million/year
Nagase purchases (trehalose, etc.)
approx. ¥200 million/year

Foods

31

Principle product categories (enzyme reactants)
manufactured by the three Hayashibara companies
Rare Sugars

Starch Sugars

FucosePsicoseCarbohydrate M
MaltoseIsomaltose

RiboseFructose

AllosePullulan
cyclooligosaccharide
Isomalto-oligosaccharide

Hallodex

GlycosideD
Transglycosylation(AA2G, Hesperedin)

Cyclodextrin Tertiary Function
Trehalose(Physiological Function)
Secondary Function(Sweetness/Properties)

Primary Function(Energy)

EnzymeReactants
Sugar

GlucoseStarchSyrup

Manufactured by
Hayashibara
In Development
Not manufactured
by Hayashibara

Starch (corn, potato, sweet potato, etc.)32

Main products manufactured by the three
Hayashibara companies (Trehalose)[Characteristics/Strengths]
・Natural sugar found widely in nature
・Light sweetness (approximately 45% of sugar)
・Called the "dream sugar" due to various functionality including hygroscopy resistance,
starch retrogradation resistance, freeze resistance, desiccation resistance, etc.
TrehaloseCompetitor A

Competitor B

Low-Sweetness Sugar

○

○

○

Crystal Powder

○

×

×

Acid-/Heat-Resistant

○

○

○

Non-Staining

○

△

△～×

Safety○○○[Principal Uses]
Japanese confections, Western confections/desserts, beverages, bread,
Other/ limits discoloration, limits protein denaturation, freeze-resistant,starch retrogradation-resistant, maintains vegetable freshness, limits hygroscopy/
food additive
Approximately 90% of sales within Japan[Competitive Position (other companies, other products)]
The Hayashibara Group discovered a new trehalose-formed enzyme in microorganisms, and developed atechnology to manufacture trehalose directly from starch.
This resulted in the successful manufacture of stable trehalose at 1/100 of the normal cost, leading to a dramaticincrease in use in foods.
The Hayashibara Group is the only commercial-scale trehalose manufacturer.

33

Main products manufactured by the three Hayashibara
companies (AA2G)
AA2G: (L-Ascorbic Acid 2-Glucoside: Stabilized Vitamin C)[Characteristics/Strengths]
Using a glycosyltransferase-derived from microorganisms, Hayashibara is able to manufacture
starch-derived glucose by transaminating vitamin C. This allowed the first commercial-scale
manufacturing in the world.
L-Ascorbic Acid (vitamin C) is know to limit abnormal pigmentation in the skin. AA2G is much morestable than vitamin C, and demonstrates the same physiological activity in living organisms asvitamin C. As such, AA2G is used in skin-whitening cosmetics.
In Japan, AA2G was approved as an active ingredient in nonmedicinal products in 1994.

[Principal Uses]
Used in Japan and overseas by major cosmetics manufacturers in skin-whitening/skin careproducts.
Approximately 75% of sales are in Japan.
The skin care market accounts for more than ¥600 billion of the total cosmetics market in Japan. Of
that amount, more than ¥210 billion is spent on skin-whitening/skin care.

[Competitive Position (other companies, other products]
AA2G is superior to regular vitamin C:
More stable
Easier formulation (less processing by cosmetics manufacturers)
Better solubility (less damage to skin during application)
Better safety (pH is close to skin pH)

３４34

Hayashibara Group Net Sales, Profit Plan
(100 millions of yen)

2011
Forecast

2015 Plan

vs. 2011

vs. 2011

Net sales

260

330

125%

70

Gross profit

120

155

129%

35

General andadministrative
expenses

67

85

127%

18

Operating profit

53

70

132%

17

EBITDA

70

85

121%

15

About the philanthropy project:
While we are considering transferring the philanthropy project (anthropoid research, paleontology research, artmuseum) to a more compatible organization in the future, the current plan figures include philanthropy project operating
expenses.
Note) The fiscal 2011 forecast consists of figures estimated by the business trustees at the time that the reorganization
plan was created. These figures assume a withdrawal from the purchasing business. The fiscal 2015 plan consists offigures based on calculations considering the Nagase sponsorship of the Hayashibara Group reorganization.
These figures may differ significantly from actual results due to various risks or uncertainties that may occur in the
future.

35

Future Developments
Stronger Sales = Revised Overseas Strategy
Reexamine overseas locations (sales, manufacturing bases)
Study the construction of applications labs
Assignment of Hayashibara engineers + Nagase sales staff

Stronger R&D, Production Systems
Integrate Nagase R&D centers, Nagase ChemteX research/
production departments
Stronger Management Function
Improve accounting/compliance functions
36

Future Bio Business Expansion
Scope
Business
FieldsSubstance
Research/
EnzymeConversion

Recombinant

Synthesis x
Fermentation

Trading Company
Functions

FutureBusiness Foundation
37

Projected Schedule

November 18, 2011

・Submit reorganization plan to the Tokyo District Court(completed)

December 31

・Reorganization plan approval (expected)

Early January, 2012

・Public notice of reorganization plan approval (two weeks)

Late January

・Finalized reorganization plan (expected)

Early February

・Merger of the three Hayashibara companies
・¥70 billion contribution(Receive new stock issue ¥15 billion ¥55 billion loan)
・Consolidate as wholly owned subsidiaryNote) This forecast was based on information available at the time; actual results may differ significantly due to various risks or
uncertainties that may occur in the future.

38

Impact on Nagase Consolidated Earnings
Reference figures

Net Sales¥630 bil

Net Sales¥656 bil(104%)¥

Operating profit¥18 bil(116%)¥
Operating profit¥15.5 bil

* Figures represent Nagase FY2011 earnings forecast plus Hayashibara Group FY2011 estimated results (fullyear basis, after amortization of goodwill)

Financial Impact
Goodwill Amortization Period: 20 years

Return of Investment: 10 years or less

EBITDA: Trend at ¥7 billion or higher

Lower effective taxes due to loss
carryforwardsNote) This forecast was based on information available at the time; actual results may differ significantly due to various risks
or uncertainties that may occur in the future.

39

The Technology and Intelligence Oriented Company
that Turns Wisdom into Business

http://www.nagase.co.jp

These presentation materials contain forward-looking projections based onassumptions, forecasts, and plans as of November 21, 2011. Actual earnings may
differ from projections due to risks and uncertainties in the future global economy,competitive landscape, currency exchange rates, etc.