Nissan Chemical Corporation
FY2020 Financial Results Briefing
Presenter:
YAGI Shinsuke Representative Director, President & COO
MIYAZAKI Junichi Director, Senior Executive Vice President, CFO
May 14, 2021

Miyazaki: I am Miyazaki. Thank you.
Before going into the explanation of the financial results, I would like to explain about the change inaccounting policy on page 2 today.
There are 3 important changes. The first point of change is that as agent transactions, so-called trading
company transactions, only the profit margin will be recorded as sales. As a result, sales and cost of sales will
each decrease by JPY44.6 billion in FY2021.
The second change is the change in revenue recognition of royalty income. In particular, royalties forveterinary drugs have been recorded twice a year, in August and February, but from FY2021, these will be
divided into quarterly periods, in May, August, November, and February.
Lastly, there is a change regarding sales discounts. This change will be made in the Agrochemicals business.
The idea is to book estimates of the discount according to the sales period. In the past, the amount wasrecorded at the time the amount of money was determined, but from this fiscal year, it will be allocated overa period of time.
As a result, the first quarter increased in terms of the number of discounts recorded, and therefore, revenue
will decrease. For the second quarter, it will increase, and revenue will decrease. For the first half, it will
increase, and revenue will decrease. For the second half, the amount of discount will decrease, therefore, therevenue will increase. For the full year, it will come out even.
As for the impact on the balance sheet in FY2021, we will make a retroactive adjustment of JPY2.1 billion to
the current discount in the beginning retained earnings item.

1Moving onto the highlights of the financial results. Please turn to page 3.
First, regarding the results for the second half of FY2020, operating income increased by JPY3.9 billion to
JPY24.5 billion, compared to the same period last year. Net income increased by JPY3.3 billion to JPY19.6
billion from JPY16.3 billion in the previous year.
Compared to the forecast, operating income ended above the plan by JPY2.2 billion, and net income ended
above the plan by JPY2.1 billion.
Now, this is the full-year results for FY2020.
First, the YoY comparison. Operating income was JPY42.5 billion compared to JPY38.6 billion in the previous
year, securing an increase of JPY3.9 billion or 10%.
For net income, it is an increase of JPY2.7 billion, or 9%, from JPY30.8 billion in the previous year to JPY33.5
billion.
As a result, operating income and ordinary income have reached record highs for the seventh consecutive
year, and net income for the eighth consecutive year, despite the coronavirus pandemic.
ROE was 17.5%, higher than the previous year's 16.9% and also higher than the November forecast of 16.6%.

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Moving onto page 4. This is the return to shareholders. The annual dividend will be JPY104, an increase of
JPY14 from the previous year's JPY90. At the time of the November announcement, the dividend forecast
was JPY98, so this represents an upward swing of JPY6. As a result, we will be able to increase dividends forthe ninth consecutive year.
The dividend payout ratio was 44.9%, meeting the medium-term target of 45%. Treasury stock repurchases
totaled JPY10 billion, the same amount as the previous year. The total return ratio was 74.6%, compared to75.1% in the previous year, roughly in line with the medium-term target of 75%.
Third point is the highlights of the forecast for FY2021.
First, let's look at the YoY comparison. Operating income will be JPY43.6 billion compared to JPY42.5 billion,
an increase of JPY1.1 billion. Net income will be JPY34.1 billion, an increase of JPY0.6 billion. ROE is 17%,
which is lower than FY2020, but meets the target of 16% in the medium-term plan.
Next is our forecast for shareholder returns in FY2021. We plan to pay a dividend of JPY108, an increase of
JPY4 from the previous year. As a result, dividends are expected to increase for the 10th consecutive year.
The dividend payout ratio is 45.2% compared to 44.9% in the previous year, meeting the medium-termtarget of 45% as well.
As for the acquisition of treasury stocks, as announced today, we have started with an upper limit of JPY7.0
billion. The total return ratio is 65.7% at this stage.
Moving onto the comparison with the medium-term plan. Operating income is expected to exceed the
medium-term plan target of JPY43 billion by JPY0.6 billion, so despite the coronavirus pandemic, we expect3

to achieve the target. Net income is also expected to exceed the mid-term plan target by about JPY1.1
billion.

Moving onto page 5. This is the table of results for FY2020.
I already gave you an overview, so please see EPS here.
In FY2019, it was JPY210, and in FY2020, it was JPY231.7.
At the bottom of the table, crude oil prices were USD68 in FY2019 and USD43 in FY2020, which was a low oil
price situation.

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Page 6 shows the results for the second half of FY2020, so please refer to it later.

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Moving onto page 7. This is the results for FY2020.
I have already outlined this as well, so I will just talk about the extraordinary income and loss.
Extraordinary income and loss for this fiscal year, FY2020, increased by JPY0.6 billion. This includes JPY1.6
billion in gains on sales of securities, and the number of sales was JPY3.1 billion.
We have sold all of our shares in 11 description of the stocks we held.
As a result, operating income and ordinary income have reached record highs for 7 consecutive years, and net
income has reached record highs for 8 consecutive years, as indicated by the red letters in the frame below.

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Next, page 8 shows the results for the second half of FY2020, which you can also see later.

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Page 9 is the results for the third quarter as a review.

8Moving onto page 10. This is the results for the fourth quarter.
I will only touch on the comparison of earnings forecasts here.
As you can see, overall sales and operating income exceeded the forecasts by JPY0.6 billion and JPY0.8 billion,
respectively.

9Moving onto page 11.
As you can see, the figures for non-operating income/expense and extraordinary income/loss for FY2019 andFY2020 are not much different.

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Next, on page 12 is the cash flow.
As for FY2020, others under cash flow from investing activities indicate negative figures of JPY7.5 billion. This
includes JPY5.4 billion for the acquisition of DITHANE.
Despite this major acquisition, we continue to have ample cash flow, and our final cash and deposits are
JPY32.4 billion, an increase of JPY1.8 billion from the previous fiscal year.
In FY2021, we expect cash and deposits to decrease slightly to a balance of JPY27.6 billion at the end of the
fiscal year, as expenditures will increase due to the timing of cash for investment.

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Moving onto page 13. Page 13 shows the balance sheet.
Cash and deposits were JPY32.4 billion at the end of the March 2021, and borrowings were JPY22.7 billion, so
we are still in a positive net cash position.
The equity ratio is 74.9%.
One more point, please look at the listed stocks in the lower left corner.
The breakdown of this increase of JPY3.7 billion from JPY20.7 billion to JPY24.4 billion is shown in the note ofnumber 1 in the bracket at right.
Acquisitions were zero, but sales were JPY1.5 billion, and the valuation difference increased by JPY5.2 billion.

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Next, on page 14, is a table of forecast for FY2021.
As you can see in the middle, operating income is expected to be JPY43.6 billion.
Net sales will be JPY172.5 billion, a JPY36.6 billion decrease from last year, but this is due to the change inaccounting standards mentioned earlier.
The impact of the change in accounting policy is summarized in the number 1 in the brackets outside of thetable.
There will be an impact on agency transactions in the first and second half of the fiscal year, and sales
discounts will increase by JPY1.0 billion in the first half and decrease by JPY1.0 billion in the second half.
Therefore, this will have an impact on earnings in the first and second half. It will come out even for full year.
EPS shown in the table is JPY239.18, an increase of over JPY7.
The assumption of the exchange rate shown at the bottom of the page is JPY107 to the dollar.
Crude oil is assumed to be USD55 per barrel, up from the result of USD43 per barrel in the previous year.

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Page 15 is the forecast for the FY2021.
I already explained the overview, but as you can see in the description framed in red, operating income andordinary income are expected to reach new highs for the eighth consecutive year, and net income for the
ninth consecutive year.

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Page 16 shows the forecast for the first quarter and the first half.
Please check this later.

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Continuing on, page 17, is the sales situation by segment for FY2020.

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Then, page 18 shows the operating income by segment.
Please see the change here. The total increase in profit for the year was JPY3.9 billion.
By segment, Chemicals increased by JPY0.2 billion, Performance materials increased by JPY5.4 billion,
Agrochemicals decreased by JPY1.1 billion, and Pharmaceuticals decreased by JPY0.5 billion.
Shown at the right end is the forecast. In comparison with this forecast, Chemicals ended above the plan,
Performance materials above the plan, and Agrochemicals and Pharmaceuticals ended below the plan.
This is how it turned out.

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Next, page 19 shows the sales by segment for FY2021.
As before, the first and second quarters are also shown.

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Page 20 shows the forecast of operating income for the full year.
The increase/decrease values for each segment are on the far right.
Chemicals is expected to increase by JPY0.9 billion.
Performance Materials is expected to increase by JPY1.4 billion.
Agrochemicals will be down by JPY0.6 billion.
Pharmaceuticals will be down by JPY0.1 billion.
The total forecast is expected to increase by JPY1.1 billion.

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Next, on pages 21 to 30, is the status of the growth engine.
Please turn to page 21.
At the beginning of the year, we had estimated that the total would be JPY13.4 billion.

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Please see page 22.
We ended with the total of JPY11.6 billion.
This includes DITHANE.

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Moving onto page 23.
This is the forecast for FY2021, which is expected to increase to JPY15.8 billion, and this also includes DITHANE.
The rest is description of the products of each growth engine, which you can see later.

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Then I will skip ahead to page 31.
This is the performance in Chemicals segment.
Page 31 is the conventional summary page.

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Page 32 is the material flow.

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Next, page 33 shows the status of sales.
Please see the results for the second half of FY2020 in the middle of this page.
First of all, Fine Chemicals saw a 15% increase in total sales, but the forecast on the left was a 21% increase.
This is because TEPIC exceeded the plan, but environmental related products were below the plan, resulting
in the decrease in the increase ratio of sales.
On the other hand, Basic Chemicals declined 9% YoY in the second half, but the previous forecast was for a
13% decline, so I think we ended above the plan.
As for our forecast for FY2021, Fine Chemicals is expected to increase by 13% and Basic Chemicals to increaseby 6% for full year, and we are expecting improvement overall.

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Moving onto page 35. This is the profit overview of the segment.
Due to the time constraint, I will focus on the comparison to the forecast for the second half of FY2020, YoYchange of FY2020 for the full year and forecast for 2021 for each segment.

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First, please see page 36.
The upper right shows the comparison to the forecast for the second half.
In the Fine Chemicals, TEPIC's sales ended above the plan, but the environmental related products ended
below the plan, and the high cost of raw materials and fuel was added to that. However, due to the impact oflower fixed costs, sales were in short of the plan, but profits exceeded the plan.
As for Basic Chemicals, exports of melamine, nitric acid products, urea and AdBlue exceeded the plan. Salesof high-purity sulfuric acid and domestic melamine ended below the plan, but the low price of raw materials
and fuel has had a positive effect. Sales and operating income are both above the plan.
In total, sales increased by JPY0.2 billion and operating income increased by JPY0.3 billion.
Next, on the lower left, are the annual figures for FY2020.
First is Fine Chemicals. Sales for TEPIC General increased due to the recovery from 3Q. Sales of environmental
related products decreased. Also, TEPIC, for electronic applications, is on a recovery trend since 3Q. Thanks
to the lower price of raw materials and fuel, both sales and profits increased.
For Basic Chemicals, sales of high-purity sulfuric acid and nitric acid products increased, but sales from exportsof melamine and domestic melamine decreased. As a result of the low prices of raw materials and fuel, sales
and operating income decreased, but the extent of the decrease for operating income was very small.
As a whole, sales were down JPY2.4 billion but profits were up JPY0.2 billion.

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Next is the forecast for FY2021.
For Fine Chemicals, sales of all products will increase. Partly due to a positive effects of inventory changes,
both sales and operating income are expected to increase.
For Basic Chemicals, we expect sales to increase in all products except the export of melamine. However,operating income is expected to remain flat due to the increase in fixed costs and the negative impact of
inventory fluctuations.
As a result of the above, sales will increase by JPY2.7 billion and profit will increase by JPY0.9 billion.

Next, we will move on to Performance materials. That is on page 37. This is a summary table.

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Then, page 38 is the sales distribution.

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Page 39 shows the sales trend of major products.
First, please see the second half of FY2020. SUNEVER in Display materials were up 4%, which was higher than
the forecast of zero.
For Semiconductor materials, sales increased by 15%, which was higher than the 9% forecast.
As for Inorganic materials, it increased 10% and exceeded the plan of 2% decrease.
For the full year, sales of SUNEVER increased by 5%, those of Semiconductor materials increased by 20%, andthose of Inorganic materials increased by 1%.
For FY2021, SUNEVER expects an annual increase of 2%, Semiconductor materials an increase of 10%, andInorganic materials an increase of 5%.

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Page 40 shows the status of SUNEVER by mode.
As for the VA, it shows the downward arrow (sales decrease) for FY2020, but the situation is practically flat. It
will turn to increase in FY2021.
Sales of IPS will continue to increase, mainly due to strong sales of photo IPS.

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Next, starting on page 41, is the profit overview for Performance materials.

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On page 42, the upper right-hand corner, there is a comparison with the forecast for the second half of FY2020.
As you can see, sales and profits of Displays, Semiconductors, and Inorganic materials have exceeded the plansignificantly.
In Displays, the increase above the plan for photo IPS and growth in the non-smartphone sector has been
noticeable.
For Semiconductors, the increase above the plan in ARC had a significant effect.
In Inorganic materials, SNOWTEX increased above the plan.
In all sub-segments, fixed costs were below the plan, and overall sales and operating income increased by
JPY1.8 billion and JPY1.8 billion, respectively.
Bottom left is the year over year comparison for FY2020.
Sales and profit increased in the Display, Semiconductor, and Inorganic materials, respectively.
In the area of Displays, fixed costs increased by about JPY0.1 billion, but the increase in Photo IPS sales drove
the overall performance. The semiconductor market continued to be strong, and there was a significant
decrease in fixed costs. Inorganic materials also increased due to higher sales and lower fixed costs.
Overall, net sales increased by JPY6.1 billion and operating income increased by JPY5.4 billion.
Next is the forecast for FY2021.

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Both sales and profits are expected to increase for Display. Sales of photo IPS will continue to increase, and at
the same time, sales of VA will also increase.
For Semiconductor, sales will continue to increase in ARC and other semis materials. Inorganic sales will
increase, but profit will decrease due to a larger increase in fixed costs.
Overall, sales and operating income are expected to increase by JPY4.2 billion and JPY1.4 billion, respectively.

Next, on page 43, is Agrochemicals.
The summary of Agrochemicals is on page 43.

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Page 44 shows the movement of major products in Agrochemicals.
Please see the percentage of FY2020 results in the middle of this page.
First, the ROUNDUP was flat compared to the previous year. This is because MAXLOAD had a large-scalecampaign in FY2019, and because the consumption tax was raised in FY2019, there was a last minute purchase
before that. Sales in FY2020 decreased due to the reaction to that.
On the other hand, AL sales have increased due to continued sales expansion and expansion of distribution
channels. As a result, the ROUNDUP came out even in total.
For Fluralaner, sales of active pharmaceutical ingredients decreased due to continued inventory adjustments,
and despite an increase in royalty income, the total sales decreased by 12%.
Regarding ALTAIR, sales increased due to the launch of new generation products and the recovery of exports,
but the results were lower than our forecast because we were a bit more aggressive in our forecast.
Two lines below is GRACIA, which saw large decrease. The reason for the decrease is the fact that, in the firsthalf of the year, there were few insect pests due to low temperatures, and that in the third quarter, there
were few insect pests due to long rains. In addition, there is a considerable amount of inventory in distribution,
which has resulted in a decrease in sales.
Regarding QUINTEC, it declined by 8%, and this is largely due to the delay in production at our contract
manufacturing partner.
Lastly, DITHANE started selling the product in Japan in January.

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As a result of the above, looking at GRACIA alone, as shown in the bar graph below, the results for FY2020
were much lower than our forecast. Sales are expected to increase in FY2021.

Moving onto page 45.
This is a summary of the 2 drugs that we recently acquired, QUINTEC and DITHANE.

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Then moving onto page 46.
This shows the timing of launch of our major product. There is no change from the previous report.

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Next, please see page 47. This is an explanation of Fluralaner.
There are no major changes here either, but BRAVECTO launched a spot product for dogs in Japan in January.
Also, BRAVECTO Plus has been launched in Japan as well.

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Page 48 is the situation of Fluralaner.
As you can see in the second point, the status of quarterly sales is shown.
As I mentioned at the beginning, the month in which royalty sales are recorded changes, so the royalty income
is spread out over each quarter.
This is the image of the sales trend from FY2019 to FY2023.
This is the image I presented in May last year, and there are no factors that would change this image at present,
therefore the situation continues as it is.

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Next, page 49 shows the status of our joint ventures in India.
We are also making steady progress in this area.
As for the dispatched employees from Japan, they have already come back to Japan due to the coronavirus
pandemic, but the foundation work has already started.

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Moving onto page 51. This is the profit overview of the segment.

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Please see the comparison with the plan for the second half of FY2020 at upper right of page 52.
Sales for DITHANE, PERMIT, and LEIMAY ended above the plan. The Fluralaner and ROUNDUP ended almost
in line with the plan. Ended below the plan was domestic GRACIA, ALTAIR, QUINTEC and TARGA.
Although the fixed costs were lower than planned and there was a positive impact of inventory fluctuations,due to the negative factor of inventory valuation loss, operating income ended below the plan by JPY0.5 billion.
Next, on the lower left, are the results for FY2020.
For the full year, sales increased in DITHANE, ALTAIR, exports of GRACIA, LEIMAY, and PERMIT. Sales was flatin ROUNDUP. Sales decreased in Fluralaner, domestic GRACIA, QUINTEC, and TARGA.
Fixed cost was up and amortization of QUINTEC and DITHANE was also increased.
In addition, there were negative factors such as inventory valuation losses and changes in inventories,
resulting in a decrease in operating income of JPY1.1 billion while sales decreased by JPY0.2 billion.
Next is the forecast for FY2021.
As you can see, sales are expected to increase for DITHANE, domestic GRACIA, QUINTEC, LEIMAY, and
ROUNDUP. ALTAIR will be flat. Sales for Fluralaner is expected to decrease due to continued inventory
adjustments. Sales from PERMIT and exports of GRACIA will also decrease.
Since we expect a large increase in fixed costs of JPY1.2 billion, sales are expected to increase by JPY2.4 billion,
but operating income is expected to decrease by JPY0.6 billion.

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Next is the Pharmaceuticals. That is on page 53. There is a summary of Pharmaceuticals on page 53.

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Then, on page 54 is LIVALO.
As you can see in the table below, the domestic LIVALO turned to increase in FY2020 due to the completionof inventory adjustment, but it will decrease again in FY2021.
On the other hand, overseas sales had been increasing steadily until FY2017.
But due to the expiration of market exclusivity in Europe, there was a large decrease in FY2020.
We expect this to continue in FY2021.

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Moving onto page 55.
This is the pipeline in Pharmaceuticals segment.
There is no change here.

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Moving onto page 56. This is the situation of Custom Chemicals.
As you can see in the table here, sales in FY2013 were JPY1.2 billion, but now they have more than tripled to
JPY3.8 billion, which greatly compensates for the decline in profits from Drug Discovery.

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Moving onto page 57.
This shows the change in business strategy for Pharmaceuticals.
This has not changed since the announcement in May 2020.

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Next, page 59 is the profit overview for the Pharmaceuticals.
Let me discuss the comparison to the forecast for the second half on page 60 first.
In Drug Discovery, operating income ended below the plan. In addition, Custom Chemicals also suffered avaluation loss on its inventory, which ended below the plan. Overall, profits were below the plan by JPY0.2
billion.
The result for FY2020 is shown on bottom left. Profit for Drug Discovery was down by JPY0.8 billion.
On the other hand, Custom Chemicals secured an increase of JPY0.24 billion despite negative factors such as
inventory valuation loss and inventory fluctuation.
As a result, the profit decreased by JPY0.57 billion in total.
To the right is the forecast for the FY2021.
For the Drug Discovery, profits will decline by JPY0.58 billion due to the continued decline in sales of LIVALO.
Since we expect a profit increase of JPY0.5 billion in Custom Chemicals, we are forecasting a decrease inoperating income of the level of JPY0.08 billion in total.

Page 61 shows depreciation, investment, and research and development expenses.
Research and development expenses dropped in FY2020 once, but are expected to return slightly in FY2021.

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Page 62 is the major investment.

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Moving onto page 63. This is an ESG initiative.
Let me explain major points since the last report.
First of all, in January 2021, we revised our long-term target for greenhouse gas reduction, setting a target of
reducing greenhouse gas emissions by 30% from the FY2018 level by FY2030.
Then, in April, we announced our Diversity Statement and Vision.
In the area of governance, we plan to appoint our first female director at the Board of Directors meeting next
month in June 2021.
As a result, from June onward, we will have 10 directors, 4 of whom will be from outside the Company.

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Next is a comparison with the medium-term plan.
Now, please look at page 66.
This is a comparison between the forecast for FY2021, and the medium-term plan for FY2021.
If you look at (B)-(A) for Chemicals, operating income is down JPY2.7 billion, and the overall sales are expected
to be below the expectation in more products. Of course, we could not have predicted the impact of Chinese
products or the impact of the coronavirus.
As for Performance materials, in terms of operating income, Displays and Semiconductors are expected to
exceed the plan substantially. Photo IPS, and Semiconductors in general, are expected to exceed the plan.
Inorganic are expected to be below the plan significantly. This is due in large part to the fact that oilfieldmaterials are not growing.
In the Agrochemicals, operating income is expected to decrease by JPY3.5 billion. Although there will be an
addition of DITHANE and QUINTEC, the decrease is mainly due to the inventory adjustment of Fluralaner.
In Pharmaceuticals, operating income will be down JPY0.4 billion, but Drug Discovery is expected to be above
the plan. For Custom Chemicals, contract production of peptides has not yet started, which is a negative factor.
Overall, it is an increase of JPY0.6 billion. For our company, the medium-term plan is a commitment, not apipe dream. We are not selective about profit and we are confident that we can achieve it.

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Page 67 onward describes the features of our company. If I may just touch on page 71.
As for share repurchases, we have acquired total of JPY42.71 million shares, and cancelled JPY42.6 million
shares by FY2020.
This number of shares is equivalent to 23% of the number of shares before the acquisition started.
This concludes my explanation.

Message from the President
Moderator:
Next, I would like to introduce Yagi's career prior to his address as President.
He was born in 1962 and is now 58 years old. Joined the Company in 1985.
In 2016, he was appointed as Executive Officer and Plant Manager of the Sodegaura Plant.
In 2018, he became Managing Executive Officer and Head of Production Technology Department.

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In 2020, he was appointed as Director, Senior Managing Executive Officer, and Head of Production Technology
in charge of Production Technology, Chemicals Division.
In 2021, he was appointed Representative Director, President & COO.
Now, Yagi will say a few words as President.
Yagi: Hello, everyone. I am Yagi, the president. I would like to extend my greetings upon assuming the position.
As introduced, I have been involved in all business fields of our group from the standpoint of production
technology and manufacturing. In addition to safe and secure operations and consideration for the global
environment, we have worked to develop the Group by maintaining and strengthening the technologies andfacilities of our manufacturing processes, which are the source of our competitiveness, and by formulating
investment plans that effectively utilize our management resources and enhance our competitiveness.
In recent years, in order to establish a competitive advantage and respond to drastic changes in the businessenvironment, we have been promoting the digitization of our factories and other initiatives aimed at shifting
to next-generation factories in all of our factories.
Furthermore, amidst intensifying competition, I have been working on operational reforms beyond theframework of manufacturing, such as reviewing the relationship between production and R&D and promoting
the creation of a system that contributes to the early creation of new products.
And I have been strongly involved in all kinds of investment projects in all businesses, such as theestablishment of global production bases, the construction and enhancement of production plants, and thestrengthening of research facilities, and have formulated and implemented optimal plans based on our graspof the most advanced information.
Based on my experience covering all of these business areas, I will fulfill the role of President with a strong
resolve, devote all my energy to the management of the Company, and take on the challenge of further
improving the corporate value of our group.
Now, upon assuming the position of President, I believe that I have 2 immediate responsibilities.
The first is to ensure the completion of Vista 2021, our medium-term management plan, which will end thisfiscal year. As explained earlier in the financial results, we are making steady progress on our numerical targets,
but we will continue to implement various measures without loosening our effort. We will also strive toachieve the Vista 2021 management targets of 16% ROE and 75% total payout ratio.
Second thing is to work on the next medium-term management plan and a new long-term management planwith an enhanced perspective looking beyond 2030.
The key to the Group's growth is the creation of a new growth engine by focusing management resources on
research and development, planning and searching for new businesses, products, and technologies,
strengthening our core businesses and developing human resources.
Over the next year, we will raise awareness of our contribution to society through global changes such as
global warming countermeasures and population issues, the advent of a digital society, and increasingly
diverse human values, and we will draw up a growth strategy with an eye to a transformed future, aiming toestablish a stronger business portfolio.
In addition, we will actively promote CSR management based on the SDGs and ESGs, and thoroughly pursue
measures to increase corporate value, thereby defining the path that the Group should take in the future.

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In terms of management indicators, we aim to achieve equal or higher target than current medium-term plan
which is ROE of 16% and total payout ratio of 75%.
For the next management plan, I believe that it is important to disclose and explain what kind of value theGroup will provide to all stakeholders.
For institutional and individual investors, we are working to disseminate accurate information about our groupthrough financial results briefings, individual interviews, and timely and appropriate information disclosure.
We will strive to improve our corporate value over the medium and long term by reflecting the opinions andconcerns we receive from you in our management.
We will continue to make concerted efforts to realize a corporate group that is trusted by society throughactive dialogue with all of our stakeholders.
I would like to take this opportunity to express my sincere gratitude to all of you for your continued supportand encouragement.

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Question & Answer<Questioner 1>
Q: I would like to ask the new president about the first point. I understand that you will be making a longterm plan in the future. What issues do you see with Nissan Chemical so far?
For example, the profitability of Chemicals is very low, Please tell me your thought about these issues andportfolio reform that needs to be worked on going forward.
A: Yagi will answer.
First of all, regarding Chemicals, we will review the business portfolio and sort out the product group by deeply
factoring in the profitability.
In addition, while we will of course continue to pursue growth in our existing business fields, we will also
spend the next year examining the possibility of introducing new businesses in our new medium-term andlong-term management plans.
We are currently working on a project to formulate a long-term management plan looking at FY2030 andbeyond, with young people taking the lead in creating the management plan and vision. We are proceedingwith the plan to formulate a medium-term management plan based on it.
Q: Thank you very much.
Next, it is about the veterinary API Fluralaner. It seems that BRAVECTO's sales at the end of the period fromJanuary to March 2021 have increased considerably, but even in this situation, do you expect inventory
adjustments to continue?
A: Regarding the inventory adjustment for Fluralaner, we are well aware that BRAVECTO is selling well at theend. In our discussions with Merck & Co., Inc., we have not received any information that would change ourcurrent long-term forecast for the inventory situation of Fluralaner, which is that the inventory adjustment
will continue until FY2022, so we will proceed with the understanding that the inventory adjustment willcontinue until then.
Q: Is it correct that there was no additional order for Fluralaner and that sales are falling as expected?
A: Yes, it has been performing almost exactly as you said.
Q: I understand. One more point. For Agrochemicals as a whole, your forecast for FY2021 is for an increase insales of JPY2.4 billion and a decrease in operating income of JPY0.6 billion. Please tell us about the JPY1.2
billion in fixed costs and other factors that may have contributed to the decrease in profits.
A: Regarding the increase in fixed costs of JPY1.2 billion, this is based on the assumption that travel,transportation, research and development, and other expenses will all increase significantly. In addition, theimpact of the inventory adjustment of Fluralaner is also significant. Although DITHANE's sales will increase,
we are now forecasting a decrease in profits.

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<Questioner 2>
Q: I would like to ask the new president, Mr. Yagi, about the first point. In terms of the current businessportfolio of your company, I feel that the weight of Performance materials and Agrochemicals is quite large.
How are you thinking about means of creating new businesses, for example, through mergers andacquisitions? I think it would be quite difficult to conduct M&A in a place that is not involved with yourcompany at all, so please tell us about your thoughts on M&A.
A: Yagi will answer.
In terms of M&A, we are not considering the initiatives that aim for only M&A. In particular, we do notconsider M&A in enclaves that have little relevance to our business segment because of the high risk involved.
In our current medium-term and long-term management plan, we have to think about what fields we canutilize our technology, people, and resources in, and then we will incorporate M&A and alliances as tools toenter those fields.
Q: In that case, is it correct that you are not thinking to change your current business portfolio largely in thenext medium-term business plan?
A: No, if there are businesses or areas that can be derived from these segments based on the technology,
we would like to incorporate it.
Q: Thank you very much.
As the second question, please let me ask about SUNEVER. Looking at page 40 of the presentation materials
for VA mode sales, the actual results for FY2020 are negative single-digit percentages, while the forecast for
FY2021 is positive single-digit percentages. Could you please explain this trend?
A: In terms of VA, it has decreased in FY2020 due to a decrease in operation at some of our customers who
use our products. On the other hand, for FY2021, we are planning for an increase as our customers begin fullscale operation of their expansion lines.

<Questioner 3>
Q: The first question is about the veterinary API Fluralaner. On page 48, you mentioned earlier that there isno factor to change this at present.
However, it seems that not only Merck's sales but also sales of other veterinary drugs manufacturers havebeen growing, I believe that the environment has changed compared to the previous year. So do you feel any
discomfort in the fact that there is no reason for your company to change the current scenario? The only
reason why you do not change this is because there is no additional order from Merck? Can you give us somemore details about this point?
A: In our discussions with Merck, we naturally heard about the end sales trend of BRAVECTO, but they said
that the inventory is sufficient. Therefore, we cannot change it any further.
Q: I think you originally had the view that inventory adjustment would continue for 3 years, so I think there is
still naturally enough inventory even though BRAVECTO is selling so well at the moment. Is there any
possibility that the inventory adjustment will be completed earlier, or that the decline in sales will be milder?

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A: We are told that they will not change that either, so it is impossible for us to make any assumptions beyond
that, so we have no choice but to consider things based on the current situation. We have a regular meetingwith Merck, so we will have to wait and see how it develops.
Q: I see, I understand. According to your company's internal analysis, there is no indication that the pace of
decline will be any faster, is it correct?
A: Not that either. I think that is the pace we expect.
Q: Why is that? Why do you analyze the situation in such a way when the environment has clearly changed
so much compared to a year ago?
A: The original inventory was very large.
Q: I see. I understand that the inventory was originally quite large. However, compared to a year ago, theexternal environment has changed considerably, so I wonder if the outlook for the end of inventory
adjustment will remain unchanged.
A: I have not seen any factors that would change that either.
Q: I understand. Next, I would like to ask you about the Chemicals forecast for the new fiscal year is shown on
page 33. You expect that environmental related products will grow by 24% in the new fiscal year. Can you give
us some background on this?
A: As a factor for the increase in environmental related products, as you know, we completed the expansionof the production of isocyanuric acid called CA in December last year. In addition to that, we have completed
the facility for packing this product this March. From here, we plan to increase sales of isocyanuric acid and
HI-LITE, which is made from isocyanuric acid.
In this area, although the situation for swimming pools in Japan is severe, the demand for private pools in the
US and other countries is already an increasing trend.
At the same time, we can expect an increase in the use of disinfectants such as for coronavirus disinfection.
A: Let me add something. There is a material flow chart on page 32, and there is isocyanuric acid there. It
comes from urea et cetera and is used as a raw material for HI-LITE. We are the only manufacturer of
isocyanuric acid in Japan, and we use it for our own HI-LITE production as well as supplying it to othercompanies as the raw materials for their HI-LITE. So the sales of this will increase.
Q: I understand. Also, the sales growth of Melamine is expected to be only 4% in FY2021. On the other hand,market price seems to have risen considerably in the last 1 or 2 months, so the 4% increase seems a bit
conservative. Could you give me the background to this?
A: The price of melamine has been recovering since the fourth quarter of last year, and is now on an increasing
trend. For this, China's production capacity is extremely high. It is difficult to predict that prices will continue
to move in a positive direction, so we are taking a cautious approach in this regard.

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<Questioner 4>
Q: First point is about the inventory adjustment of Fluralaner. Could you tell me what did you originally think
the growth rate of the veterinary drug market would be? I had originally thought it would be in the mid-single
digit percent. Is it about right?
Also, you mentioned that the inventory adjustment will last until FY2022. Would it be the first or second halfof FY2022 in your impression?
A: I think the image of the growth of veterinary medicine you just mentioned is about right. It is hard to say
when in the year of 2022. The order of inventory of APIs from Merck's fluctuates considerably depending on
the quarter, so it is difficult to say whether it is in the first half or the second half.
Q: I see. I understand. The second question is about semiconductor materials. In the last year or so, there has
been a decoupling trend in the semiconductor supply chain, and I feel that the importance of supply chainsoutside of Asia may increase in the future. In this regard, your company is only selling the products in Asia.
The question is whether this could be a risk in the medium to long term.
A: In this situation, our materials are very widely used in the manufacture of advanced semiconductors, andTaiwan and Korea are leading other areas by a wide margin, so we do not expect any major changes in thenear future.

<Questioner 5>
Q: What are your thoughts on the fixed cost? Fixed costs for Performance materials were expected to increaseby JPY0.9 billion at the beginning of FY2020, but as a result, they decreased by JPY1.8 billion, although thismay have been due to the impact of the coronavirus pandemic.
Also, Agrochemicals was expected to increase by JPY1.4 billion at the beginning of FY2020, but it ended up
increasing by only JPY0.3 billion.
In FY2021, you plan to have an increase in fixed costs in the Performance materials area of JPY1.6 billion, andJPY1.2 billion in Agrochemicals. Can you please tell me the probability of this, and how high the probability isthat it will be used?
A: We are assuming that the coronavirus effect will disappear in 2H FY2021 and that the movement of people
on business trips will normalize. In addition, the cost was lower than the plan partly due to research anddevelopment expenses in FY2020, but we expect it to return. These are the large factors. I think the budget
may overestimate the fixed cost.
Q: Regarding the increase in the fixed cost of JPY1.6 billion in Performance materials and JPY1.2 billion in
Agrochemicals, do you expect them to increase from the second half based on your assumption that thecoronavirus pandemic will converge to some extent?
A: Actually, there will also be an increase in research and development expenses, so we are expecting an
increase in the first half as well.
Q: I understand. Next is the view of GRACIA in the area of Agrochemicals. Last year, the performance was notgood partly due to the long rains. In terms of the expected increase of 20% for this year, does it sell to certain
extent as long as there is no bad weather?

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Won't it be the case that, for example, you didn't use much last year, so you have leftover stock and didn't
use much this year after all?
A: In terms of GRACIA, it is true that last year's results were considerably lower than expected due tounseasonable weather and external factors. Therefore, as you pointed out, we have been proceeding withrelatively high level of distribution inventory since the beginning of the year.
However, we believe that this product is highly dependent on pest outbreaks and weather factors, and if wehave a normal outbreak of targeted pests, we expect to achieve the forecasted or planned figures.
Also, our distribution inventory is relatively clearing out, so we would appreciate it if you could understandthat our plan is based on the assumption of occurrence of usual outbreak.
Q: About GRACIA, what are the weights between Japan and Korea right now?
A: In terms of weight, Japan is by far the larger country.

<Questioner 6>
Q: On page 44, LEIMAY's sales have been growing quite strongly, with a 20% increase in sales inFY2020 and a
22% increase in sales in FY2021 outlook. Will we start to see the contribution of mixtures for the European
market particularly in FY2021 outlook? Can you give us some additional explanation about this strong growthof LEIMAY?
A: With regard to the growth of LEIMAY in FY2021 outlook, as you pointed out, of course, it includes the
mixtures for overseas.

<Questioner 7>
Q: I would like to ask you about semiconductor materials. In 4Q of FY2020, it looks like sales are decreasing
compared to 3Q.
A: It is true that the performance in 4Q was weaker than that in 3Q.
However, this does not mean that the market itself has deteriorated or that our market share has declined.
Sales in 4Q FY2020 appear to be small because due to the delay of the timing of the shipment, customers
wanted to have inventory in 3Q FY2020 ahead of schedule, and also the shipment in March was postponed
to April of FY2021 due to the production schedule.
Q: I see. Also, there is talk that Chinese smartphones are a bit weak. Do you think there will be much impact
on your business, semiconductors or displays?
A: In the field of semiconductors, Chinese smartphone makers are different from manufacturers that directly
manufacture semiconductors. They buy semiconductor chips to make smartphones, so there will be no drop
in operations at semiconductor manufacturers.
Q: What about the display side?

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A: Basically, there will be no major impact from smartphones in China. Even if there was a slight downturn,
we did not expect it to have any impact on our sales as panel manufacturers would be able to maintain
operations by shifting production to other applications.
[END]

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