Nissan Chemical Corporation
4Q FY2023 Financial Results Briefing
YAGI Shinsuke
Representative Director, President & COO
DAIMON Hideki Director, Senior Managing Executive Officer& CFO
May 13, 2024

Yagi: Hello, everyone. I am Yagi, the president. Thank you very much for participating in our financial results
briefing today. I would like to talk about the progress of our Mid-term Business Plan “Vista2027”.

First, I will give a brief overview of the Mid- and Long-term Business Plan.
Looking ahead to the year 2050, our group has discussed social issues and social changes, and formulated
Atelier2050, a vision of what we should be in 2050. Then, through back-casting, Vista2027 was formulated
and launched in May 2022.

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Under Atelier2050, we have defined our business domains as the growth business domains of “Information &Communication”, “Life Science”, and “Environment & Energy”; and the core business domain of “Materials &Services”, as our vision for the year 2050.
In addition to our existing core technologies, we will also acquire new technologies in “Microbial control” and“Information science” to enter new areas related to our three growth businesses. By deepening andintegrating our core technologies, we will accelerate the growth of each business area and contribute tosolving social issues.

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In Vista2027, as the ideal state of the Company in 2027, it describes the following: “while existing businesses
are robustly driving the business performance, new core technologies are consistently acquired for expanding
and enhancing business areas”; “organized sustainability-related initiatives are promoted and related
information is offered internally and externally”; and “as the digital foundation is being established, businessactivities are conducted based on the latest information on clients and markets”.
Based on the challenges identified in the previous Mid-term Business Plan “Vista2021”, and our vision for2027, we have set four basic strategies: “Deeply exploit business areas and increase marketing ability,”“Promote sustainable management,” “Strengthen the creation and co-creation process of values,” and“Expand market shares and profits of existing businesses.”3

From this page, we will explain the progress of various measures based on each strategy.
First, I would like to discuss the first strategy, “Deeply exploit business areas and increase marketing ability.”
In fostering new core technologies, microbial control technologies, we focused on culture and formulation as
well as activity evaluation to identify and evaluate issues based on the fact that, unlike chemical pesticides,
culture and formulation are also important in bio-agrochemicals.
Regarding the use of digital technology in research and development, the Company is also promoting a
program to train data scientists at the institute. Furthermore, in MI verification on actual themes, wenarrowed down the target themes to accelerate the verification process.
In the development of materials for secondary batteries, our products have been used as component
materials for secondary batteries for electric vehicles.

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Next, in the second strategy, “Promote sustainable management.” we conducted an evaluation of climatechange scenarios, quantitative evaluation on 1.5℃/4℃ scenario, as part of our ESG efforts, and disclosed theresults to the public.
In addition, along with the development of strategies related to human capital, indicators and targets wereset and disclosed externally.
In addition, as initiatives related to corporate governance, a new female outside director was appointed andthe effectiveness of the Board of Directors was assessed by an external organization.
As for the third strategy, “Strengthen the creation and co-creation process of values,” the plant DX
infrastructure is progressing, and some data are now being used at five domestic plants of Nissan Chemical.

5With respect to the fourth strategy, “Expand market shares and profits of existing businesses,” in theChemicals segment, capacity expansion of high purity sulfuric acid progressed steadily to meet the increasing
demand for semiconductor.
In addition, Venus Oilclean, a microorganism formulation, was adopted in several companies for food factory
wastewater treatment, which is decomposing oils and fats. We also started exploring new applications otherthan decomposing oils and fats.
In the Performance Materials segment, we are also promoting the development of display materials for nextgeneration displays, such as QD-EL displays and micro-LED displays.
In the Semiconductor Materials, the new NCK plant was completed. In addition to starting production to
obtain customer approval, we promoted the development of materials for EUV lithography materials for highNA in our laboratories.

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In the Inorganic Materials, we participated in a consortium for CCS materials. We have continued to actively
promote material development.
In the Agrochemicals segment, an NBR plant in India was completed. The Company has started to manufactureand further ship API of LEIMAY, fungicide, and GRACIA, insecticide. In Japan, a plant for the production API of
NC-653, herbicide has been established, and start pilot production.
In the Healthcare segment, in oligonucleotide therapeutics, the Company entered into a strategic allianceagreement with Sanwa Kagaku Kenkyusho Co., Ltd. for oligonucleotide therapeutics drug discovery, with theaim of creating new oligonucleotide drug candidate compounds.
In the Custom Chemicals, we have signed a technical cooperation agreement with a collaborator for the
production of generic APIs at our company.
As I just explained, policies based on each of the above strategies were implemented in the last fiscal year,
and certain results were obtained.

7However, as Daimon will explain later, both sales and profits declined YoY in the last fiscal year, and as
indicated on this page, we expect to fall short of our Mid-term targets for both sales and operating profit inour outlook for the current fiscal year. Even with the changes in the business environment, we have to saythat there was an issue with the progress in achieving our sales and profit targets of our Mid-term Business
Plan.
First, sales for the current fiscal year are strongly affected by the deteriorating semiconductor market, andsales of Performance Materials are expected to fall far short of the Mid-term plan at JPY11.0 billion. For theGroup as a whole, the outlook for sales in the current fiscal year is JPY234.1 billion, falling short of the Midterm plan target by JPY20.9 billion.
As for operating profit, the Chemicals segment, which has positive net sales compared to the Mid-term plantarget, is expected to fall short of the target in operating profit by JPY2.9 billion, highlighting the issue in terms
of profit margins.
The Performance Materials segment is expected to be below the target by JPY7.7 billion in operating profit,
partly due to the significant negative impact of sales. Overall group operating profit is projected to be JPY50.0
billion, JPY8.5 billion below the Mid-term plan target.

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On this page and the following pages, we will discuss the factors that contributed to the underachievementof sales. This page shows the Mid-term plan sales targets for main growing existing products whose sales are
expected to increase by JPY0.5 billion or more in FY2024 compared to FY2021.
In the Mid-term plan announced in May 2022, sales of main growing existing products were set at JPY156.9
billion, but the outlook disclosed today is JPY152.7 billion, JPY4.2 billion below the Mid-term plan target.
The main reason for this negative figure is Performance Materials, especially semiconductors, which will be
JPY7.6 billion belowthe target. We recognize that the effects of the deteriorating semiconductor market
conditions have appeared, and we expect sales of our main growing existing product to pick up as the market
recovers.

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On the other hand, for new products, we had planned sales of JPY17.0 billion in the Mid-term plan announced
in May 2022. However, the Company's outlook announced today is JPY11.5 billion, JPY5.5 billion below the
Mid-term plan target.
None of the four divisions and the Planning and Development achieved the plan.
In particular, in the Performance Materials, EUV materials shows a significant increase over the plan, but OLED
materials and photo VA are expected to fall far short of the plan.
Also in the Agrochemicals, DITHANE was positive versus plan, but NC-653 plan was delayed and QUINTEC sales
plan is not achieved. The Healthcare is also expected to fall short of the plan, due to new orders for Custom
Chemicals and biomedical materials.
In the Planning and Development, some products are expected to post slight gains, while other products areprojected to fall short of the plan. As you can see, we are lagging behind in fostering the development of new
products that will serve as growth engines.

10This is the last page of my explanations.
As I have just explained, in Vista2027 Stage I, there are deviations in sales and profit plans. In light of this, weare now in the process of reformulating Vista2027 Stage II, with the items listed here as major items forconsideration, since last year.
The first is to accelerate the creation of new products and businesses. We are considering selection andconcentration of research themes along with the creation of its framework, and enhancement of M&A
activities, introduction of new technologies, and promotion of cooperation with partner companies.
The second is to expand existing businesses and enhance profitability. We are currently considering
structurally reforming the business model of the Chemicals, and enhancing core growing business bydeepening our presence in business area.
This concludes my explanation.

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Daimon: I will now explain the financial results announced this time. Please see page four of the material.
There are four boxes from the top for the FY2023 Financial Summary. For the top one, 2H, this is YoY
comparison. Net sales increased JPY2.4 billion, or 2%. On the other hand, operating profit remained flat. In
addition, as I will explain later, non-operating income and loss increased by JPY1.6 billion, resulting in an
increase of JPY1.6 billion in ordinary profit. As a result, net income increased JPY1.1 billion or 7%.
Next is the full-year, YoY comparison, which shows a JPY1.4 billion or 1% decrease in sales. Operating profit
decreased by JPY4.1 billion or 8%. Net income was also down JPY3.1 billion or 7%.
Next is the comparison of the full-year result with the outlook announced in November of last year. Sales
were below the target by JPY0.8 billion, operating profit and net profit were below the target by JPY0.4 billion,
respectively.
Regarding shareholder returns, the full-year dividend remains unchanged at JPY164 per share compared tothe previous year, and we have already completed the acquisition of JPY10.0 billion of treasury stock on afiscal year basis. The dividend payout ratio was 60.1%, and the Mid-term target was 55%. The total payout
ratio was 86.2%, compared to a target of 75%.

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The specific numbers are on the next page, page five, and these are the FY2023 results compared to the same
period last year, and the YoY numbers are shown on the far right.
First, to be more specific, for FY2023, net sales were JPY226.7 billion, operating profit was JPYP48.2 billion,
non-operating income was JPY3.4 billion due to the positive foreign exchange gains I mentioned earlier,ordinary income was JPY51.6 billion, and net income was JPY38.0 billion. The operating margin was 21.3% and
ROE was 17.1%.
Regarding the exchange rate, the dollar-yen, as stated there, is JPY145 for full-year, but as you may know, thedollar appreciated to JPY151.40 at the end of March 2024.
Crude oil, on a JCC basis, costs USD86 per barrel, which is a considerable cost reduction compared to the
FY2022 results.

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Please move on to page six.
This is a comparison with the outlook announced in November last year. The comparison is shown on the far
right. Please check it later.

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The next page, page seven, shows the analysis of changes in operating profit by segment, as usual. As shownon the top, 2H of FY2023 was JPY24.1 billion, the same as in FY2022, but JPY0.4 billion below the target.
Specifically, in the Chemicals segment, the profit decreased by JPY0.2 billion from the previous year. As shownon the right, sales of melamine were terminated and sales of environmental-related products decreased. We
were also affected by the Noto Peninsula earthquake at the beginning of the year. On the other hand, it was
JPY0.8 billion below the target. As stated, the Noto Peninsula earthquake had a certain degree of impact.
For Performance Materials, profit decreased by JPY0.1 billion YoY. On the other hand, it is JPY0.8 billion below
the target. Specifically, Semis Materials outperformed the plan. For Display Materials, photo IPS was in linewith the target, but other products such as rubbing IPS and VA were below the target affected by the market
adjustment. In addition, fixed costs etc. were JPY0.7 billion above the target, which is a factor in the decreasein profit, and these factors resulted in JPY0.8 billion below the target.
In Agrochemicals, profit increased JPY0.8 billion YoY and outperformed the target by JPY0.1 billion. As I will
explain later, overseas agricultural chemicals such as GRACIA and LEIMAY underperformed the target.
However, with an increase in veterinary drugs, such as Fluralaner, overall result was JPY0.1 billion above thetarget.
In Healthcare, profit decreased JPY0.5 billion YoY. On the other hand, it outperformed the target by JPY0.2
billion.
As a summary, for the full FY2023, profit decreased JPY4.1 billion YoY to JPY48.2 billion, of which the Semis
Materials business alone resulted in a JPY4.4 billion decrease. By segment, as you can see there, the Chemicals

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segment declined JPY1.4 billion YoY, Performance Materials declined by JPYP2.9 billion YoY, and the bulk ofthis is due to Semis Materials. On the other hand, Agrochemicals increased JPY0.3 billion YoY and Healthcare
decreased JPY0.2 billion YoY.

Continuing from the next page, on page nine, is a summary of the outlook for FY2024. As you can see, it isshown in YoY with 1H and 2H separated.
In 1H, sales are projected to increase by JPY3.9 billion. Operating profit will decline by JPY0.1 billion. Net
income is expected to decline by JPY1.4 billion. As I will explain later, as shown in the bracket, non-operating
income/loss, especially foreign exchange gains/losses, is set at zero at the beginning of the year as usual,resulting in a JPY1.9 billion decrease in our outlook. Net income is expected to decrease by JPY1.4 billion.
For the full year, net sales are projected to increase JPY7.4 billion, or 3%. Operating income will increase by
4% or JPY1.8 billion. Net income will see a 1% or JPY0.4 billion increase.
The JPY2.2 billion decrease in non-operating income/loss from the previous year, as I mentioned earlier, isalso effective here. The ROE projection is therefore 16.5%.
Meanwhile, our shareholder return target remains basically unchanged at 75% total payout ratio and adividend payout ratio of 55%, based on our Mid-term management plan target. In addition, as alreadyannounced today, we will begin the repurchase of JPY5.0 billion of our own shares tomorrow.
Specifically, the interim dividend is JPY70 and the year-end dividend will be JPY94, for a total of JPY164, whichis unchanged from the previous year, and the dividend payout ratio will be 58.9%.

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As I mentioned earlier, we expect to repurchase JPY5.0 billion of our own shares by July, but as noted in theasterisk, it was JPY10.0 billion last year.
The total payout ratio, then, is targeted at 75%, but at the present time, the total of the JPY5.0 billion intreasury stock and dividends is 71.8%, which is the calculated figure.

Page 10 shows specific numbers.
As you can see the outlook for FY2024 in the column at the middle that says “Total,” sales of JPY234.1 billion,
operating profit of JPY50.0 billion, ordinary profit of JPY50.5 billion, and extraordinary income, not a loss, of
JPY1.4 billion are expected, resulting in net income of JPY38.4 billion.
The operating margin is expected to be 21.4%, a slight increase from the previous year. ROE is 16.5%, as I
mentioned earlier. Regarding the exchange rate for yen/dollar, as stated, the current outlook assumes JPY145
for 1H and JPY140 for 2H, and JPY143 for the year.
Finally, for crude oil on JCC basis is assumed to be USD82 per barrel, which means a slight decrease in cost.

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Next is operating profit by business segment.
1H of the year is as shown there, but I will omit it and move onto the full year. We assume an increase of
JPY1.8 billion overall. First, in Chemicals, we expect an increase of JPY0.6 billion. As I explained earlier, we
expect that the increase in sales in high purity sulfuric acid and environmental related products, as well as theabsence of the impact of the Noto Peninsula Offshore Earthquake which we had last year, will have a positive
impact.
In Performance Materials, we assume an increase of JPY1.9 billion. Fixed cost etc., will increase by JPY2.8
billion, of which JPY2.2 billion will be in Semis Materials, but we assume an increase in total Performance
Material because of the increase in Semis Materials sales and Display sales.
Agrochemicals will see a JPY0.7 billion increase YoY. Although fixed cost etc., are expected to increase, profit
is expected to increase overall due to increased sales of GRACIA, Fluralaner, and ALTAIR.
In the Healthcare business, we expect a decrease of JPY0.5 billion due to an increase in sales of Custom
Chemicals, a decrease in sales of LIVALO, and an increase in fixed cost etc.

18Moving on to page 12.
This is a breakdown of non-operating income/expenses and extraordinary income/losses. First, if you look at
the middle part of the YoY comparison, the non-operating income/loss down the bottom shows a decline of
JPY0.08 billion. FY2023 is about same level as FY2022. On the rightmost, the outlook for FY2024 is JPY0.46
billion.
For foreign exchange gains and losses, as you can see on the third line, the budget for this fiscal year has been
set at zero, so it will be largely negative compared to the previous fiscal year. With other increases anddecreases, we forecast JPY0.46 billion.
As for extraordinary gains and losses, in FY2023, as shown in the small asterisk note under “3,” some
impairments were recorded, and to offset this, an extraordinary gain of JPY1.3 billion was recorded.
On the other hand, we do not have any extraordinary losses planned for FY2024, so we plan to record a gainof JPY1.4 billion from the sale of shares.

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Page 13 shows the cash flows.
Free cash flow for FY2023, as shown in the second row from the left, is JPY15.0 billion, a decrease of JPY0.5
billion from the previous year, but almost unchanged from the outlook announced last November.
As you can see in the last line, we have cash and deposits of about JPY23.0 billion on a consolidated basis.
On the other hand, as you can see on the far right, the outlook for FY2024 is for free cash flow of JPY29.2
billion, which is a considerable increase. This includes an increase in depreciation, which will reduce cash
outflows, and an increase or decrease in working capital, which will improve due to the suppression of
inventory growth. As a result, the forecasted value is JPY27.4 billion in cash and deposits, as shown in thebottom line.

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Moving on to the balance sheet on page 14.
As usual, the upper left-hand corner shows a comparison with the end of March of the previous year. Total
asset increased JPY24.8 billion, of which inventories in current assets, in particular, increased JPY13.5 billion.
Although this is a decrease of about JPY7.0 billion compared to the end of December 2023, when comparedto the previous year, there was still an increase mainly in agricultural chemicals.
In addition, in the fixed assets section, Total PPE are reflected in this section, as we have invested in overseas
and other areas.
On the other hand, the liabilities and net assets on the right show a JPY13.7 billion increase in borrowings,
which basically corresponds to this increase in inventories. Net assets increased by JPY9.4 billion, the equity
ratio was 70.3%, and the D/E ratio was 8.5%, indicating that the Company continues to maintain a sound levelof assets.
Finally, the breakdown of investment securities is shown below left. JPY17.1 billion was the balance at theend of March 2024, which means that the number of issues held on a non-consolidated basis has alreadydecreased to 24 issues. Compared to the previous period, the number of issues decreased by two issues, andas you can see in the reference section, the number of issues decreased by less than half from 55 issues six
years ago. The ratio of strategic holdings to net assets remained below 8%, as shown in the bottom row.

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The following page 15 shows the figures for capital investment, depreciation, R&D expenses, et cetera, bysegment, with actual results for FY2023 and outlook for FY2024. As stated here, CAPEX will increase slightly
this fiscal year as well.
Also, with regard to depreciation, NCK will increase a bit, but overall depreciation is JPY15.6 billion, an increaseof less than JPY2.0 billion.
On the other hand, research and development expenses are expected to total JPY18.2 billion, and we increase
this expense steadily.

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The following pages are by segment, but skip to page 21 for Chemicals. As President Yagi explained earlier,
the Chemicals business is facing a number of challenges. As mentioned in the first sentence, in FY2023, thevolume of sales decreased significantly due to the price decline of competing products in China, mainly Fine
Chemicals, and the impact of the Noto Peninsula earthquake, which had a negative impact of about JPY0.5
billion on an operating income basis. As a result, both sales and profit decreased.
In FY2024, we expect an increase in both sales and profits due to an increase in sales of high-purity sulfuric
acid or a rebound from the effects of this earthquake.
Please see the waterfall chart below to see how operating income is broken down by volume difference, pricedifference, or fixed costs. The growth rates of individual major product sales are shown in the comments
section of each of the following pages.

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Page 22 shows FY2023 results with YoY comparison.
As you can see in the comments, there is an increase or decrease in revenue for each of the products, but
especially for high-purity sulfuric acid, the lower right-hand corner shows an increase of 5% for the year.

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Continuing on page 23, this is the FY2023 results with comparison with the plan.
Please check it for your reference later.

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On page 24 is YoY comparison of FY2024 outlook.
We are aiming for an increase of JPY0.6 billion in operating income. In Fine Chemicals, there will be an increasein fixed cost & others so that we set an increase in sales and decrease in profit.
On the other hand, we expect an increase in sales and profit for Basic Chemicals. In particular, we plan a 24%
increase in sales of high-purity sulfuric acid due to increased volume.

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Next is Performance Materials.
Please skip to page 27. As mentioned in the first sentence, in FY2023, sales increased and profit decreased
due to an increase in fixed costs resulting from growth investments in Semis Materials, et cetera, although
there was an increase in volume due to the recovery of Display Materials.
In FY2024, we expect an increase in volume due to the recovery of both Display Materials and Semis Materials.
In addition, the increase in fixed costs will also be reduced, and we plan to increase both sales and profit, withan increase of 8% in profit. See the waterfall chart below for specifics.

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Please move on to page 28.
Please see the two bar graphs below, which are sales trend of Display Materials and Semis Materials. Sales ofDisplay Materials have steadily increased from the bottom in FY2022, as indicated by the yellow arrows to
FY2023 and FY2024. We recognize that the market is recovering, and in particular, as in the past, theconversion of photo IPS from other modes is progressing well.
In Semis Materials, we expect a 15% increase in annual sales for the current fiscal year, after a dip in FY2023.
While a full-fledged recovery is not expected until 2H of FY2024 or later, we recognize that the Mid- to longterm growth trend will remain unchanged, despite the temporary adjustment phase.
In addition, EUV materials have continued to grow, with double-digit growth in FY2023 due to increased
production by customers.

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Specific sales growth rates are on page 29.
As you can see in the column of total for YoY change for FY2023 and FY2024 at rightmost, Display Materials
increased 12% last fiscal year and is planned to increase 4% this fiscal year.
In Semis Materials, it declined 4% last fiscal year but will increase 15% this fiscal year. Especially for EUV
materials, we assume that double-digit growth will continue in the current fiscal year. Inorganic Materials
sales declined 4% in the previous year and will increase 3% in the current year, and overall segment sales are
expected to increase by 9% in the current year.
However, in FY2023 results 4Q shown at the middle, the Semis Materials were quite strong, and this waspartly due to the impact of the transfer of sales from R&D expenses. The amount of customer certification forshipments of paid samples was transferred to sales made in 4Q. The results of these factors, especially multilayer process materials, show a strong positive trend.

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On page 30 are comments on the YoY comparisons for FY2023.
In particular, for FY2023, net sales increased JPY2.0 billion and operating profit decreased JPY2.9 billion, of
which fixed costs increased JPY4.1 billion.
In terms of EUV materials, sales of EUV-UL remained strong, resulting in an increase in sales.

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We will skip page 31, which is the comparison with the plan, and go on to page 32, which is the outlook for
FY2024.
On YoY, we expect sales to increase by JPY7.3 billion, operating profit to increase by JPY1.9 billion.
In particular, in the Display Materials, a photo IPS revenue will increase. We assume that smartphones are
somewhat sluggish, but in the non-smartphone area, we expect to see double-digit growth.
In addition, Semis Materials are recovering steadily after bottoming out in 2Q of FY2023 in anticipation of amarket recovery, and this is reflected in these figures.

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Next is the Agrochemicals business. Please refer to page 34.
Here, as always, are the FY2023 results, and the budget for FY2024, showing YoY growth rates and sales ofmajor products for the 1Q 2Q, 1H, 2H, and full year.
Overall segment sales increased 1% in FY2023. While GRACIA increased 40%, LEIMEY declined 35%. On theother hand, Fluralaner increased 11%, showing double-digit growth.
For the FY2024 budget, especially for the year, as shown in the rightmost column, we are assuming an increaseof 27% for GRACIA and an increase of 5% for Fluralaner.
As a result, as you can see at the bottom of the page, we were aiming for sales of JPY10.0 billion in GRACIA
over the six years from the launch 2018. This assumption indicates that we will reach that figure.

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The next page, page 35, shows YoY comparison of FY2023 results.
In particular, there was an increase of JPY0.5 billion in annual sales, JPY0.3 billion in operating profit, and anincrease of JPY1.7 billion in fixed and other costs.
In this, especially in the comments, the second line from the bottom, LEIMAY, fungicides, it says that a volume
down in Europe due to distribution inventory adjustment. This is what I mentioned earlier, and it is reflectedin the YoY figure of decline of 35%.

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Page 36 is the comparison with the plan, so skip to page 37.
This is the YoY comparison for FY2024. For the current fiscal year, we expect an increase in sales in GRACIA,
and in LEIMAY, as shown in the second line from the bottom, we expect to recover from distribution inventory
adjustment.
On the other hand, we have assumed a decrease in sales of TARGA, herbicdes, because of shipment shifted
to FY2023, as well as the impact of distribution inventories in Europe.
Fluralaner, as I mentioned earlier, is expected to increase its sales by 5% for the year, due to strong shipmentsof the API.

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The list of major products is on page 38, and there are no major changes.
The sales target for NC-653, the third line from the bottom, has not been changed from the peak year, but
the scheduled launch year in FY2024 is expected to be postponed slightly to 2Hof FY2024.
Also, the next NC-520, which we had assumed would be launched in FY2025, will be launched in FY2027, twoyears later than the original plan. We have conservatively assumed FY2027 since there are some delays inregistration, et cetera. We have not changed the date of FY2027 for the NC-656 shown at the bottom.

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To continue, I'll skip a bit. Healthcare segment. See page 45.
This is FY2023 results. As shown in the top sentence, both sales and profit decreased. Sales decreased byapproximately JPY0.4 billion and operating profit decreased less than JPY0.2 billion, respectively.

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As you can see on page 46, compared to the plan, results exceeded the plan especially in Custom Chemicals.

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The last page, page 47, shows YoY comparisons for FY2024, and here we see that LIVALO, both domestic andexport revenues, are down.
As for Custom Chemicals, although sales are expected to increase, fixed costs and other expenses are
expected to increase, and unfortunately, we assume that profits will decrease here.

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Finally, the comparison with the Mid-term Business Plan target. Jump to page 50.
Although Yagi explained a little earlier, we have done more detailed analysis here. In terms of the differencesof the FY2024 outlook and target in the Mid-term plan, please look at column B-A in the middle of the blue. A
quick look at the results shows that operating income, especially in Chemicals, is below JPY2.9 billion, and in
Performance Materials, below JPY7.7 billion, with these two items falling below the target. We expect tooffset with an above of JPY2.4 billion in Agrochemicals, but it was not enough to make up the difference.
In particular, in Performance Materials, as shown in the small print there, sales of Display are expected to be
below 12% and Semis below 14% compared to the Mid-term plan, indicating that the market has suffered amajor adjustment that could not have been anticipated when the mid-term plan was drawn up.
On the other hand, as shown here for Agrochemicals, sales are expected to above by 17% compared to the
Mid-term plan due to overseas agrochemicals, especially in GRACIA. In addition, sales of Animal Health are
expected to above 13% compared to the Mid-term plan.
As you can see, there is a deviation between the FY2024 outlook and Mid-term plan target, which made us
realized that there is an issue.
We are scheduled to announce the figures for the next Stage Ⅱ Mid-term plan review in May 2025, and weare currently studying them with the same sense of direction as I just explained. I’m sorry I took so long, but
that’s all I have to say.

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Question & Answer<Questioner 1>
Q: First, I would like to ask President Yagi about the Mid-term Business Plan, and one thing that stands out isthat ROE seems to have hit its ceiling. It remains around 20%. As a measure to raise this to the next stage
exceeding 20%, in the briefing material Part 1, page 12, there is a comment about restructuring the businessmodel and structural reforms in the Chemicals business. I don't think there are many low-profit businesses inyour company, and I think there is limited room for review. I wonder what you think about the reform of theportfolio in this area, and I assume this may be the scope of Stage II, but could you comment on how you see
the portfolio?
A: In the Chemicals business, we have a considerable number of products, and we will carefully assess whichof them are profitable and which are not, and shift to those that are profitable.
For example, as I mentioned earlier, we need to review our portfolio by focusing on the business whose
peripheral businesses are strong such as high-purity sulfuric acid related to semiconductors and other, andbusinesses that will grow in the future. We are now thinking in this way and have formed a team to study theissue.
In addition, Chinese products are coming in more and more at lower price. We are now examining whether
the balance between raw materials and product output is truly appropriate, with an eye to price competition.
Q: I see. I am sorry to mention specific product names, but TEPIC has been struggling recently due tocompetition from Chinese products. Could you tell me how TEPIC is positioned currently?
A: We are now in the process of reviewing the optimal operation and production system for TEPIC, becauseof the inflow of low-priced Chinese products and the inventory buildup in the market due to the COVID-19
situation.
Q: I see. Would a review of this area be in the next Mid-term plan Stage Ⅱ?
A: Yes.
Q: I see. Then, I would like to ask you the second question regarding the Performance Materials in the outlook
for this fiscal year.
In the outlook for the current fiscal year, the waterfall chart shows that profit will decline JPY2.8 billion due
to the increase in fixed cost & others, which I think is heavy. Could you tell me what is included in the decline
in profit of JPY4.1 billion in the fiscal year that ended and decline in profit of JPY2.8 billion in this fiscal year
both due to fixed cost & others increase? Also, I would like to know if the increase in fixed costs will continue
to some extent in the future.
A: On page 27 of Part 2 of the briefing material, the breakdown of the decrease of JPY4.1 billion, the majority
here is still an increase in fixed costs, with Semis Materials making up the bulk of the increase. This may havebeen explained to you previously, but with the construction of the new plant at NCK, there has inevitably been
an increase in fixed costs.
Semis Materials accounted for a large portion of the JPY2.8 billion decrease this fiscal year, but fixed costs
accounted for about half of that, and the remainder was the effect of inventory adjustment costs.

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We are just now starting full-scall production, and we are operating in various ways toward customer
certification. In this context, for the current fiscal year, FY2024, we are expecting a cost reduction effect. If
products with higher cost per unit and low production volume increase the production and shipment, the costof sales will be reduced. This will inevitably appear on the expense side. We have to take it into consideration
to certain extent.
Therefore, the fixed costs themselves will be reduced by a considerable amount, but due to such inventory
effects, the overall Performance Materials will be decreased by JPY2.8 billion.
As for your question about fixed costs level in FY2025 and beyond, if the customer certification is obtainedsmoothly, the production volume will increase, and the impact of inventory level will be reduced. On the other
hand, regarding investment, we have already completed most of our investment up to FY2023, and on page
15 of Part 2 of the presentation materials, the amount of capital investment on a cash flow basis is shown.
We have assumed that there would be almost no capital investment in FY2024 for NCK.
Therefore, in the case of our company, in Korea, the depreciation is based on the declining balance method
over a period of six years, so we assume that the cost will be reduced to a considerable extent after FY2025.

<Questioner 2>
Q: I would very much like to ask President Yagi about his cash allocation policy for the next few years.
How much cash inflow, mainly operating cash flow, do you expect, and how much do you expect to allocate
to major items such as capital expenditures, M&A, other growth investments, and shareholder returns? If it
is difficult to explain quantitatively, could you tell us if you have a sense of direction, for example, if you would
like to increase this item compared to the last three years?
I am wondering if there will be any change in the use of cash to create the next driving force, as in particular,
growth rate of photo IPS and Fluralaner is expected to decline and some are concerned if the performance
driver may change. If we look at page 12 of Part 1 of the presentation material, the keyword "M&A" ismentioned, but I was wondering if you could explain the situation including that.
A: First of all, when we consider the Mid-term plan, the next three years, and beyond, our sense of directionis that we need to accelerate our “selection and concentration” based on our growth strategy, taking into
account the current market and business environment.
I can't give you specifics right now, but we have a team that is currently working on this area, and as I
mentioned earlier with the example of Chemicals, we are trying to figure out what to do with unprofitable
items, and furthermore, where we place what we grow with an eye on the market. We will formulate andreview a new plan with this in mind.
Regarding shareholder returns, we do not plan to change our current policy during the current Mid-term
Business Plan period.
Q: If I remember correctly, M&A was not mentioned in the materials disclosed in the Mid-term business plan.
I think that your company has had a lot of experience in introducing agrochemicals and acquisitions in thepast, but what you are considering now seems to be a slight change from your past strategies. Is it correct?
A: In Agrochemicals in particular, there are a variety of products on the market, and we have to decide
whether to buy materials or technology. We are also working on Performance Materials, for which we haveseveral projects in the pipeline. We will always be aware of M&A and respond to it in other divisions also.

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Q: Second, regarding Semis Materials, looking at the results for 4Q and the plan for the new fiscal year, I havethe impression that EUV and multilayer process materials in particular have grown considerably. You
mentioned that there is some effect of transfer in multilayer materials. I am wondering if there is any newcause for the strong performance. Or, in relation to the recent AI-related semiconductors, et cetera, is there
an increase in the amount used because of the longer production process?
In addition, regarding temporary adhesive materials, I think you were expecting an increase for the HBM, butwould you please comment on the situation?
A: As for multilayer process materials and EUV, as it was commented earlier, there is a strong demand forleading-edge semiconductor such as for AI. In addition, our market share is high in this area, and we are seeing
strong growth in this area.
Also, as for the temporary adhesive materials, we have maintained a certain share of this market since theold generation of HBM. In addition, we are strengthening our R&D resources for the next generation, such as
HBM3e and HBM4.

<Questioner 3>
Q: There are two points, first, page 27 of Part 2 of the briefing material. In the Analysis of Changes in OP for
Performance Materials, there is decline of JPY1.6 billion due to price and others. What item exactly do you
expect the prices will go down? Or, since this is the beginning of the term, you are looking at thisconservatively? Please explain this point.
A: Your question is about the reason for the decline of JPY1.6 billion in Performance Materials, especially in
FY2024 due to price difference, et cetera. I would say it is t especially for Display Materials. As the volume
increases, a certain amount of price decrease is expected, which accounts for a large portion of the JPY1.6
billion.
For the other sub-segments, we do not expect a large decline due to price difference.
Q: Second, I would like to know about the business and market environment for agrochemicals. I think thatinventory adjustment has been going on for quite a long time, mainly for overseas pesticides, but I wonder if
the end of the adjustment is in sight for the new fiscal year or if it is still in the adjustment phase. Also, please
let me know how you see the domestic market environment.
A: Regarding overseas inventories, depending on the product, we believe that they have been eliminated toa large extent, including in Europe.
In the domestic market, the industry itself is experiencing a slowdown in growth, and price hikes have resulted
in an increase in value, but slightly decrease in volume. That's a whole picture of market environment.

<Questioner 4>
Q: Just one point, on page 12 of Part 2 of the financial results presentation regarding equity in earnings ofaffiliates. Could you explain the background behind the decline in profits in FY2023, especially the large dropin 2H of the year, and also the background behind the expected rebound in the current fiscal year.

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A: If you look at the results for FY2023 of equity in earnings of affiliate on page 12, you will see that it is JPY0.14
billion, which is a JPY0.73 billion decrease from the previous year. In particular, this is an equity-method
company that specializes in manufacturing fertilizers, and in FY2022, the performance was strong therefore
there is rebound. Also in FY2023, the overall market was very sluggish. As a result, we could not avoid such a
decrease.
On the other hand, for FY2024, we are assuming that there will be a slight recovery from the bottom, so wehave set the figures as shown above.

[END]

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