Consolidated Financial Results for the Six Months Ended September 30, 2017
(JPGAAP)
November 6, 2017
Stock Exchange: Tokyo
Name of listed company: NISSAN CHEMICAL INDUSTRIES, LTD.
URL: http://www.nissanchem.co.jp/
Code Number: 4021
Representative: Kojiro Kinoshita, President
Inquiry to: Hironori Yoshida, Executive Officer and Director of Finance and Accounting Department Tel. +81 3 3296 8356
Scheduled submission date of quarterly report: November 10, 2017䚷䚷䚷䚷䚷 Scheduled dividend payment date: December 4, 2017
Supplemental information: Yes
Financial results meeting : Yes(Amounts rounded down to the nearest million yen)

1. Consolidated Financial Results for the Six Months Ended September 30, 2017 (From April 1, 2017 to September 30, 2017)(1) Consolidated Operating Results(% indicates the rate of increase/decrease against the same period of the previous year)

Operating
IncomeNet Sales% Millions of Yen

Millions of Yen

Six Months Ended September 30, 2017
Six Months Ended September 30, 2016
(Note) Comprehensive Income:Ordinary
IncomeNet Income Attributableto Owners of Parent% Millions of Yen%

Millions of Yen%

17,831

25.5

13,181

24.4

14,213(6.1)

10,596(4.9)

90,9977.7

17,26317.2

84,5131.0

14,736

3.3

Six Months Ended September 30, 2017

: 16,707 million yen , 124.3%

Six Months Ended September 30, 2016

: 7,448 million yen , (22.0)%

Basic Earnings
per share

Diluted Earnings
per share

Yen

Yen

Six Months Ended September 30, 2017

87.40

㸫

Six Months Ended September 30, 2016

69.00

㸫

(2) Consolidated Financial Position
Total Assets

Net Assets

Equity Ratio

Millions of Yen

Millions of Yen%

As of September 30, 2017

226,471

171,123

74.8

As of March 31, 2017

231,748

163,707

69.9(Reference) Shareholders' equity:

As of September 30, 2017

: 169,398 million yen

As of March 31, 2017

: 162,041 million yen

2. Cash Dividends
Cash Dividends per shareFirst
Quarter

SecondQuarterYen

Third
Quarter

Yen

Year Ended March 31, 2017

䠉

24.00

Year Ending March 31, 2018

䠉

32.00

Year Ending March 31, 2018
(Forecast)Year-end

Yen

Annual

Yen

Yen

㸫

28.00

52.00

㸫

34.00

66.00

(Note) Revision of the latest released dividend forecast: Yes
Please refer to " Revision of Financial Results Forecast, Interim Dividend Payment and Dividend Forecast" for details.

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2018 (From April 1, 2017 to March 31, 2018)(% indicates the rate of increase/decrease against the same period of the previous year)
Operating
IncomeNet Sales
Millions of Yen

Year Ending March 31, 2018

192,000% Millions of Yen

6.5

34,500Ordinary
IncomeNet Income Attributableto Owners of Parent

Basic Earnings
per share% Millions of Yen%

Millions of Yen%

Yen

36,10013.8

27,00012.4

179.23

9.7(Note) Revision of the latest released forecast of financial results: Yes
Please refer to " Revision of Financial Results Forecast, Interim Dividend Payment and Dividend Forecast" for details.

4. Notes(1) Changes in significant consolidated subsidiaries(Changes in specified subsidiaries involving changes in scope of consolidation): None(2) Application of special accounting treatment to preparation of quarterly financial statements : None
(3) Changes of accounting policies and accounting estimates, and restatement
1. Changes of accounting policies due to revisions of accounting standards: None2. Changes of accounting policies other than the above: None3. Changes in accounting estimates: None4. Restatements: None(4) Number of shares outstanding (common shares)
1. Number of shares outstanding (including treasury shares)
As of September 30, 2017

: 151,000,000 shares

As of March 31, 2017

: 154,000,000 shares

2. Number of treasury shares
As of September 30, 2017

: 546,090 shares

As of March 31, 2017

: 2,242,017 shares

3. Average number of shares outstanding
As of September 30, 2017

: 150,826,554 shares

As of September 30, 2016

: 153,577,606 shares* The financial release is not subject to quarterly review.
* Explanations regarding appropriate use of business forecasts and other special notes
The business forecast contained in this report is based on information available at the time of disclosure.
Actual operating results may differ materially from the forecast due to various factors.
For supplemental information, please refer to our website.

Table of Contents for Attached Materials

1. Qualitative Information on Quarterly Results(1) Business Performance(2) Financial Position........................................................................................................ 2.............................................................................................................................. 2..................................................................................................................................... 3(3) Forecast of Consolidated Business Results and Other Forward-looking Information(4) Basic Policy on Distribution of Earnings
2. Consolidated Financial Statements.................................................. 3......................................................................................................... 4................................................................................................................... 5(1) Consolidated Balance Sheets ...................................................................................................................... 5(2) Consolidated Statements of Income and Statements of Comprehensive Income(3) Consolidated Statements of Cash Flows...................................................... 7........................................................................................................ 9(4) Notes to Consolidated Financial Statements.................................................................................................. 10(Notes on Assumption of Going Concern)................................................................................................. 10(Notes on Significant Changes in Shareholders' Equity)(Segment Information)................................................................................10.........................................................................................................................10

1

1. Qualitative Information on Quarterly Results(1) Business Performance㻌㻌 During the year ended September 30, 2017 (from April 1, 2017 to September 30, 2017), the domestic
economy has kept slowly recovering due to various factors including improvement of consumption mind
influenced by positive business performance and positive employment situation
Under these circumstances, in the Chemicals Segment, the sales of Basic Chemicals increased. In the
Performance Materials Segment, the sales of Display Materials and Semiconductor Materials, Inorganic
Materials increased. In the Agricultural Chemicals Segment, Fluralaner (active ingredients of veterinary
pharmaceutical) had healthy sales. In the Pharmaceutical Segment, the domestic sales of “LIVALO”(anti-cholesterol drug) decreased due to expansion of generic products.

㻌 As a result of previously mentioned factors, the sales for this period were 90,997 million yen (an increase of
6,483 million yen from the same period of the previous year). Operating income was 17,263 million yen (anincrease of 2,527 million yen). Ordinary income was 17,831 million yen (an increase of 3,618 million yen). Net
income attributable to owners of parent was 13,181 million yen (an increase of 2,584 million yen). 㻌㻌 Explanations by segments are as below.
㻌Chemicals
In the Basic Chemicals, the sales of melamine (adhesive agent for particle board) decreased, on the other
hand, high purity sulfric acid increased. In the Fine Chemicals, the sales of “TEPIC” (epoxy compound for LED
sealants) increased, while “HI-LITE” (chlorinated isocyanuric acid for sterilizing) decreased. In addition, the priceincrease of raw fuel impacts to the profit rate decrease of Chemical Segment.
As a result of these factors, the sales of this segment were 16,705 million yen (an increase of 166 million yen).
Operating income was 1,264 million yen (a decrease of 59 million yen).
㻌Performance Materials
In the Display Materials, “SUNEVER” (LCD alignment coating) for smartphone had healthy sales. In the
Semiconductor Materials, bottom anti-reflective coating for semiconductors (ARC®) and multi-layer processmaterials (OptiStack®) had healthy sales by some customers opening a new factory and recovery of thecapacity utilization ratio. In the Inorganic Materials, “SNOWTEX” (semiconductor polishing, hard coating, etc.) for
polishing agents for electronic substrate materials and Organo / Monomr sol (various kinds of coating materials,
resin additive) increased the sales.
 As a result of these factors, the sales of this segment were 29,123 million yen (an increase of 3,614million yen).
Operating income was 7,666 million yen (an increase of 1,500 million yen).
*ARC® and OptiStack® are registered trade mark of Brewer Science, Inc.

Agricultural Chemicals
The sales of Fluralaner (active ingredients for veterinary pharmaceuticals) increased. “ROUNDUP MAXLOAD
AL”, herbicide for general household and “ALTAIR” (paddy rice herbicide) had healthy sales.
As a result of these factors, the sales of this segment were 26,147 million yen (an increase of 2,164 millionyen). Operating income was 8,138 million yen (an increase of 1,285 million yen).
Pharmaceuticals
The shipment of “LIVALO” decreased in Japan due to expansion of generic products but increased inoverseas. Also, “Custom Chemicals” (custom manufacturing and process researching services forpharmaceutical companies) had healthy sales.
 As a result of these factors, the sales of this segment were 3,518 million yen (a decrease of 172 million yen).
Operating income was 510 million yen (a decrease of 106 million yen).

2

Trading
The sales of this segment were 29,064 million yen (an increase of 1,449 million yen). Operating income was
856 million yen (an increase of 14 million yen).

㻌
Others
The sales of this segment were 9,663 million yen (an increase of 1,072 million yen). Operating income was
158 million yen (an increase of 146 million yen).

㻌(2) Financial Position(Position of Assets, Liabilities and Net Assets)
Total assets as of September 30, 2017 were 226,471 million yen (a decrease of 5,277 million yen from March
31, 2017). It is mainly due to the decrease of notes and accounts receivable – trade.
Also, total liabilities as of September 30, 2017 were 55,347 million yen (a decrease of 12,693 million yen). It ismainly due to the decrease of loans payable.
Net assets as of September 30, 2017 were 171,123 million yen (an increase of 7,416 million yen).
 As a result of these factors, equity ratio was 74.8% (an increase of 4.9% from March 31, 2017).
(Position of Cash Flow)
Deducting income taxes paid from income before income taxes and non-controlling interests, depreciation andgain and loss on working capital, net cash provided by operating activities for the six months ended September
30, 2017 were 30,035 million yen (29,426 million yen for the same period of the previous year).
Due to the investment on plant and equipment, net cash used in investing activities for the six months ended
September 30, 2017 were 6,265 million yen (4,509 million yen).
Due to the decrease in short-term loans payable, payment for dividends and share repurchase, net cash usedin financing activities for the six months ended September 30, 2017 were 26,787 million yen (26,565 million yen).
As a result of these factors, cash and cash equivalents at the end of this period were 32,733 million yen,reflecting exchange of 48 million yen. It decreased by 2,968 million yen from March 31, 2017 (33,266 million
yen).

(3) Forecast of Consolidated Business Results and Other Forward-looking Information
Nissan Chemical Industries Ltd. (“the Company”) announces the revision of its forecast for the fiscal year ending
March 31, 2018 (from April 1, 2017 to March 31, 2018) based on the financial results for the second quarter of thisfiscal year and demand forecast.
(Millions of Yen)

Net Sales

Operating

Ordinary

IncomeIncomeNet Income
Attributable to
Owners of Parent

Basic Earnings
per share (Yen)Previous Forecast (A)189,000

32,50033,30025,200167.33

Revised Forecast (B)192,000

34,50036,10027,000179.23

Change (B-A)

3,000

2,000

2,800

1,800

䠉

Rate of Change (%)

1.6%

6.2%

8.4%

7.1%

䠉

180,289

31,43831,71324,026156.97(Ref.) Results for the Year
Ended March 31, 20173㻌㻌㻌㻌㻌㻌㻌㻌㻌㻌㻌㻌㻌㻌㻌㻌㻌㻌㻌㻌㻌㻌㻌㻌㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 㻌 (Billions of yen)

Net Sales

Revised

Forecast

Forecast

ChangeChemicals

35.5

35.1

ሺ0.4)

Performance Materials

57.6

58.5

0.9

Agricultural Chemicals

56.3

58.2

1.9

Pharmaceuticals

6.9

7.3

0.4

Trading

61.5

60.3

(1.2)

Others

21.7

21.4

(0.3)

 ሺ50.5)

ሺ48.8)

1.7

189.0

192.0

3.0

Chemicals

3.6

3.7

0.1

Performance Materials

12.3

13.9

1.6

Agricultural Chemicals

15.6

15.6

䠉

Pharmaceuticals

0.9

1.0

0.1

Trading

2.0

2.0

䠉

Others

0.5

0.7

0.2

Adjustment

ሺ2.4)

ሺ2.4)

䠉

Total

32.5

34.5

2.0

Adjustment
Total
Operating

Previous

Income(4) Basic policy on distribution of earnings
The Company’s basic policy of profit allocation is returning to shareholders by improving company value
through increasing revenue in the medium and long terms.
We aim to realize dividend payout ratio to be 40% in FY2018 and maintain total payout ratio to be 70% in
medium-term business plan “Vista2021” launched from April 2016.

4

2. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of Yen)
As of
September 30, 2017

As ofMarch 31, 2017
AssetsCurrent assets
Cash and deposits

35,701

32,733

Notes and accounts receivable - trade

60,07550,438Merchandise and finished goods

28,602

29,34364

627

Raw materials and supplies

7,778

8,703

Other

8,375

6,705

Work in process

Allowance for doubtful accounts

(33)

(36)

140,564

128,515

Buildings and structures, net

23,82423,717

Other, net

28,14530,010Total Property, plant and equipment

51,96953,728

0

7

Other

1,576

1,657

Total Intangible assets

1,577

1,665

Investment securities

32,46537,480

Other

5,269

5,178

Total current assets
Non-current assets
Property, plant and equipment

Intangible assets
Goodwill

Investments and other assets

Allowance for doubtful accounts
Total Investments and other assets
Total non-current assets
Total assets

5

(98)

(95)

37,63642,563

91,183

97,956

231,748

226,471

(Millions of Yen)
As of
March 31, 2017

As of
September 30, 2017

Liabilities
Current liabilities
Notes and accounts payable - trade

14,943

16,191

Short-term loans payable

26,225

9,975

Income taxes payable

3,288

4,305

Provision for bonuses

1,920

1,950

28

14

Other

11,25912,279Total current liabilities

57,66544,717

Provision for directors' bonuses

Non-current liabilities
Long-term loans payable

4,580

3,345

Provision for business structure improvement

594

567

Provision for loss on business of subsidiaries and affiliates

309

309

Net defined benefit liability

101

103

Other

4,791

6,305

Total non-current liabilities

10,376

10,62968,041

55,347

Capital stock

18,942

18,942

Capital surplus

13,611

13,611Retained earnings

126,370

124,676

Treasury shares(7,587)(1,961)

Total Shareholders' equity

151,337

155,268

Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

10,07913,641

Foreign currency translation adjustment

243

133

Remeasurements of defined benefit plans

380

354

10,703

14,129

1,666

1,725

163,707

171,123

231,748

226,471

Total Accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

6

(2) Consolidated Statements of Income / Consolidated Statements of Comprehensive Income- Consolidated Statements of Income(Millions of Yen)
Six Months Ended
September 30, 2016

Six Months Ended
September 30, 2017

Net sales

84,51390,997

Cost of sales

48,64451,702Gross profit

35,86939,294

Selling, general and administrative expenses

21,13322,030Operating income

14,736

17,263Non-operating income
Interest income

812Dividend income

289

311

Equity in earnings of affiliates

145

445

Other

446

491

Total non-operating income

890

1,261

Interest expenses

87

73

Loss on disposal of non-current assets

261

223

Plant stop losses

192

218

Foreign exchange losses

634-

Non-operating expenses

Other
Total non- operating expenses
Ordinary income
Extraordinary income
Extraordinary losses

236

177

1,413

692

14,213

17,831----

Income before income taxes and non-controlling interests

14,213

17,831

Income taxes - current

3,484

4,778

Income taxes - deferred

55

(245)

Total income taxes

3,540

4,533

Net income

10,673

13,29876

117

10,596

13,181

Net income attributable to non-controlling interests
Net income attributable to owners of parent

7

- Consolidated Statements of Comprehensive Income(Millions of Yen)

Net income

Six Months Ended
September 30, 2016

Six Months Ended
September 30, 2017

10,673

13,298Other comprehensive income
Valuation difference on available-for-sale securities(2,317)3,562

Foreign currency translation adjustment

(870)

(127)

Remeasurements of defined benefit plans, net of tax

(37)

(25)

0

(0)

(3,224)

3,408

7,448

16,707

7,436

16,60812

99

Share of other comprehensive income of entities accounted forusing equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to
Owners of parent
Non-controlling interests8(3) Consolidated Statements of Cash Flows(Millions of Yen)
Six Months Ended
September 30, 2016

Six Months Ended
September 30, 2017

Income before income taxes and non-controlling interests

14,213

17,831

Depreciation and amortization

4,085

4,735

Interest and dividend income

(297)

(324)

Interest expenses

87

73

Loss (gain) on disposal of non-current assets

261

223

Cash flows from operating activities

Decrease (increase) in notes and accounts receivable - trade

13,567

9,676

Decrease (increase) in inventories

1,397(2,221)

Increase (decrease) in notes and accounts payable - trade(2,055)

1,109

Other

1,854

1,887

Subtotal

33,11432,990Interest and dividend income received

1,321

770

(88)

(73)

Income taxes paid

(4,921)(3,651)

Net cash provided by (used in) operating activities

29,42630,035Interest expenses paid

Cash flows from investing activities
Purchase of investment securities

(5)

(5)

Proceeds from sales of investment securities

2,887

65

Purchase of property, plant and equipment(5,322)(6,436)

Payments for retirement of property, plant and equipment

(183)

(190)

Purchase of intangible assets

(833)

(293)

Net decrease (increase) in short-term loans receivable

115

601

Purchase of long-term prepaid expenses

(612)

(54)

Other

(554)

48

(4,509)(6,265)(16,009)(15,954)

Repayments of long-term loans payable(1,480)(1,535)

Cash dividends paid

(4,013)(4,249)

(52)

(39)

(5,000)(5,001)

Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable

Dividends paid to non-controlling interests
Share repurchase
Other

(9)

(8)

(26,565)(26,787)

(395)

48

Net increase (decrease) in cash and cash equivalents(2,044)(2,968)Cash and cash equivalents at beginning of period

35,33535,701(25)-

33,26632,733

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

Decrease in cash and cash equivalents resulting from exclusion ofsubsidiaries from consolidation
Cash and cash equivalents at end of period9(4) Notes to Consolidated Financial Statements(Notes on Assumption of Going Concern)
Not applicable.
(Notes on Significant Changes in Shareholders' Equity)
The Company canceled 2,000,000 treasury shares on May 9, 2017 based on the resolution of Board of Directors' meeting held on April 25, 2017.
In addition, the Company canceled 1,000,000 treasury shares on August 31, 2017 based on the resolution of Board of Directors' meeting held on
August 22, 2017. As a result, retained earnings and treasury shares decreased by 10,627 million yen during the second quarter ofcurrent consolidated fiscal year.
Also, the Company repurchased its own shares based on the resolution of Board of Directors' meeting held on May 12, 2017. As a result, treasury
shares increased by 4,999 million yen during the second quarter of current consolidated fiscal year.
Segment Information
1. Information Regarding Sales, Income (Loss) of Reportable Segments(Millions of Yen)

1) For the Six Months Ended September 30, 2016 (From April 1, 2016 to September 30, 2016)
Chemicals

Performance Agricultural
Materials
Chemicals

Pharmaceuticals

Trading

Others

Total

Adjustment(1)

Consolidated
Total

84,513

Sales
Sales to outside customers

12,17022,47521,876

3,664

20,766

3,546

84,49914Intersegment Sales

4,368

3,033

2,107

26

6,847

5,045

21,428(21,428)-

Total Sales

16,53825,50823,983

3,690

27,614

8,591

105,927(21,414)84,513

Segment Income or Loss
(Operating Income or Loss)

1,324

6,166

6,852

617

842

12

15,815(1,079)14,736

Notes: (1) The (1,079) million yen adjustment in segment income includes (31) million yen in intersegment eliminations, 14 million yen sales
not attributable to any reporting segment, and (1,061) million yen corporate expenses not attributable to any reportablesegment. The corporate expenses are mainly group administrative expenses which do not belong to any segment.
2) For the Six Months Ended September 30, 2017 (From April 1, 2017 to September 30, 2017)
Chemicals

Performance Agricultural
Materials
Chemicals

Pharmaceuticals

Trading(Millions of Yen)
Others

Total

Adjustment(1)

Consolidated
Total

䠉

90,997

Sales
Sales to outside customers

12,13825,812

24,254

3,491

21,654

3,645

90,997

4,566

3,310

1,893

26

7,410

6,018

23,225(23,225)

㻙Total Sales

16,70529,123

26,147

3,518

29,064

9,663

114,223(23,225)

90,997

Segment Income or Loss
(Operating Income or Loss)

1,264

7,666

8,138

510

856

158

18,595(1,331)

17,263

Intersegment Sales

Notes: (1) The (1,331) million yen adjustment in segment income includes (131) million yen in intersegment eliminations and (1,199) million yen
corporate expenses not attributable to any reportable segment. The corporate expenses are mainly group administrative expenses
which do not belong to any segment.

10