Consolidated Financial Results for the Nine Months Ended December 31, 2017
(JPGAAP)
February 2, 2018
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: February 9, 2018
Supplemental information: Yes
Financial results meeting : None
(Amounts rounded down to the nearest million yen)

1. Consolidated Financial Results for the Nine Months Ended December 31, 2017 (From April 1, 2017 to December 31, 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

Nine Months Ended December 31, 2017
Nine Months Ended December 31, 2016
(Note) Comprehensive Income:Ordinary
IncomeNet Income Attributableto Owners of Parent% Millions of Yen%

Millions of Yen%

23,94724.0

17,73424.6

19,312(5.2)

14,236(4.1)

132,680

8.7

22,39219.7

122,069(1.1)

18,700(2.7)

Nine Months Ended December 31, 2017

: 22,703 million yen , 65.7%

Nine Months Ended December 31, 2016

: 13,705 million yen , (20.1)%

Basic Earnings
per share

Diluted Earnings
per share

Yen

Yen

Nine Months Ended December 31, 2017117.68㸫Nine Months Ended December 31, 2016

92.86

㸫

(2) Consolidated Financial Position
Total Assets

Net Assets

Equity Ratio

Millions of Yen

Millions of Yen%

As of December 31, 2017

227,003

172,30375.1

As of March 31, 2017

231,748

163,707

69.9(Reference) Shareholders' equity:

As of December 31, 2017

: 170,464 million yen

As of March 31, 2017

: 162,041 million yen

2. Cash Dividends
Cash Dividends per shareFirst
Quarter

SecondQuarterYen

Third
Quarter

Yen

Year-end

Yen

Year Ended March 31, 2017

䠉

24.00

㸫

Year Ending March 31, 2018

䠉

32.00

䠉

Year Ending March 31, 2018
(Forecast)

Annual

Yen

Yen

28.00

52.00

34.00

66.00

(Note) Revision of the latest released dividend forecast: None

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

179.38

9.7(Note) Revision of the latest released forecast of financial results: None
The above basic earnings per share is recalculated using the average number of share outstanding.
(The impact of the repurchase of own shares described in "Notice Regarding Repurchase of the Company’s Own Shares " announced today is considered.)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 December 31, 2017

: 151,000,000 shares

As of March 31, 2017

: 154,000,000 shares

2. Number of treasury shares
As of December 31, 2017

: 546,208 shares

As of March 31, 2017

: 2,242,017 shares

3. Average number of shares outstanding
As of December 31, 2017

: 150,700,798 shares

As of December 31, 2016

: 153,315,546 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......................................................................................................... 3................................................................................................................... 4(1) Consolidated Balance Sheets ...................................................................................................................... 4(2) Consolidated Statements of Income and Statements of Comprehensive Income(3) Consolidated Statements of Cash Flows...................................................... 6........................................................................................................ 8(4) Notes to Consolidated Financial Statements................................................................................................... 9(Notes on Assumption of Going Concern).................................................................................................. 9(Notes on Significant Changes in Shareholders' Equity)(Segment Information)................................................................................. 9.......................................................................................................................... 9(Significant Subsequent Events)............................................................................................................. 10

1

1. Qualitative Information on Quarterly Results(1) Business Performance㻌㻌 During the year ended December 31, 2017 (from April 1, 2017 to December 31, 2017), the domestic economy
has kept slowly recovering due to various factors including expansion of capital investment, positive businessperformance and employment situation.
Under these circumstances, in the Chemicals Segment, the sales of Basic Chemicals and Fine Chemicals
increased. In the Performance Materials Segment, the sales of Display Materials, Semiconductor Materials andInorganic 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 132,680 million yen (an increase of
10,611 million yen from the same period of the previous year). Operating income was 22,392 million yen (anincrease of 3,691 million yen). Ordinary income was 23,947 million yen (an increase of 4,634 million yen). Net
income attributable to owners of parent was 17,734 million yen (an increase of 3,497 million yen). Compared tothe target, the sales were above 400 million yen, operating income were above 700 million yen, ordinary income
were above 1,100 million yen and net income attributable to owners of parent were above 700 million yen.
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 sulfuric acid (agent used for cleaning semiconductor) increased. In the Fine Chemicals, thesales of “TEPIC” (epoxy compound for LED sealants) increased, while “HI-LITE” (chlorinated isocyanuric acid forsterilizing) decreased. In addition, the profit rate of Chemical Segment decreased because of the price increaseof raw fuel.
As a result of these factors, the sales of this segment were 25,924 million yen (an increase of 355 million yen).
Operating income was 2,519 million yen (a decrease of 86 million yen). Compared to the target, the sales andoperating income were the same.
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 / Monomer sol (various kinds of coating materials,
resin additive) increased the sales.
 As a result of these factors, the sales of this segment were 44,178 million yen (an increase of 4,851 millionyen). Operating income was 11,676 million yen (an increase of 1,709 million yen). Compared to the target, thesales were above 500 million yen and operating income were above 700 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. In addition,
agricultural chemicals for overseas were also well shipped.
As a result of these factors, the sales of this segment were 32,494 million yen (an increase of 4,254 millionyen). Operating income was 7,459 million yen (an increase of 2,609 million yen). Compared to the target, thesales were below 600 million yen and operating income were above 200 million yen.

2

Pharmaceuticals
The shipment of “LIVALO” decreased in Japan due to expansion of generic products, while 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 5,834 million yen (a decrease of 288 million yen).
Operating income was 1,053 million yen (a decrease of 326 million yen). Compared to the target, the sales were
the same and operating income were above 100 million yen.
Trading
The sales of this segment were 44,992 million yen (an increase of 3,675 million yen). Operating income was
1,432 million yen (an increase of 150 million yen). Compared to the target, the sales were above 100 million yen
and operating income were below 100 million yen.

㻌
Others
The sales of this segment were 14,293 million yen (a decrease of 150 million yen). Operating income was 270
million yen (an increase of 89 million yen).

㻌(2) Financial Position㻌
(Position of Assets, Liabilities and Net Assets)
Total assets as of December 31, 2017 were 227,003 million yen (a decrease of 4,745 million yen from March
31, 2017). It is mainly due to the decrease of notes and accounts receivable – trade.
Also, total liabilities as of December 31, 2017 were 54,700 million yen (a decrease of 13,341 million yen). It ismainly due to the decrease of loans payable.
Net assets as of December 31, 2017 were 172,303 million yen (an increase of 8,596 million yen).
 As a result of these factors, equity ratio was 75.1% (an increase of 5.2% 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 nine months ended December
31, 2017 were 34,325 million yen (30,536 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 nine months ended
December 31, 2017 were 12,030 million yen (7,835 million yen).
Due to the decrease in loans payable, payment for dividends and share repurchase, net cash used infinancing activities for the nine months ended December 31, 2017 were 31,605 million yen (30,145 million yen).
As a result of these factors, cash and cash equivalents at the end of this period were 26,508 million yen,reflecting exchange of 117 million yen. It decreased by 9,192 million yen from March 31, 2017 (28,010 million
yen).
(3) Forecast of Consolidated Business Results and Other Forward-looking Information
There is no change in the forecast of consolidated business results for the fiscal year ending March 31, 2018from the statement announced on November 6, 2017.
(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.

3

2. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of Yen)
As of
December 31, 2017

As ofMarch 31, 2017
AssetsCurrent assets
Cash and deposits

35,701

26,508Notes and accounts receivable - trade

60,07547,242Merchandise and finished goods

28,602

34,62864915

Raw materials and supplies

7,778

9,170

Other

8,375

7,384

Work in process

Allowance for doubtful accounts

(33)

(39)

140,564

125,810

Buildings and structures, net

23,82423,546

Other, net

28,14530,850Total property, plant and equipment

51,96954,397

0

6

Other

1,576

1,679

Total intangible assets

1,577

1,686

Investment securities

32,46539,425

Other

5,269

5,776

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

Intangible assets
Goodwill

Investments and other assets

Allowance for doubtful accounts

(98)

(92)

Total investments and other assets

37,63645,10991,183

101,192

231,748

227,003

Total non-current assets
Total assets

4

(Millions of Yen)
As of
March 31, 2017

As ofDecember 31, 2017

Liabilities
Current liabilities
Notes and accounts payable - trade

14,943

19,391

Short-term loans payable

26,225

9,978

Income taxes payable

3,288

1,670

Provision for bonuses

1,920

616

28

21

Other

11,25912,102

Total current liabilities

57,66543,780

4,580

3,345

Provision for directors' bonuses

Non-current liabilities
Long-term loans payable
Provision for business structure improvement

594

532

Provision for loss on business of subsidiaries and affiliates

309

309

Net defined benefit liability

101

115

Other

4,791

6,617

Total non-current liabilities

10,376

10,91968,041

54,700Capital stock

18,942

18,942

Capital surplus

13,611

13,613Retained earnings

126,370

124,414

Total liabilities
Net assets
Shareholders' equity

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

Total shareholders' equity

151,337

155,008

10,07914,229Foreign currency translation adjustment

243

884

Remeasurements of defined benefit plans

380

342

10,703

15,455

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

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

5

1,666

1,838

163,707172,303

231,748

227,003(2) Consolidated Statements of Income / Consolidated Statements of Comprehensive Income- Consolidated Statements of Income(Millions of Yen)
Nine Months Ended
December 31, 2016

Nine Months Ended
December 31, 2017

Net sales

122,069

132,680

Cost of sales

72,187

77,384Gross profit

49,881

55,296

Selling, general and administrative expenses

31,181

32,904

Operating income

18,70022,392Non-operating income
Interest income

13

18

Dividend income

538

613

Equity in earnings of affiliates

236

1,020

Other

784

614

1,573

2,266

Interest expenses

121

99

Loss on disposal of non-current assets

333

257

Plant stop losses

192

218

Other

314

136

Total non-operating income
Non-operating expenses

Total non- operating expenses

961

711

19,312

23,947Extraordinary income--

Extraordinary losses--

Income before income taxes and non-controlling interests

19,312

23,947

Income taxes - current

4,137

5,649

Income taxes - deferred

795

411

Total income taxes

4,932

6,060

Net income

14,37917,886142

152

14,236

17,734

Ordinary income

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

6

- Consolidated Statements of Comprehensive Income(Millions of Yen)
Nine Months Ended
December 31, 2016

Nine Months Ended
December 31, 2017

14,37917,886

Valuation difference on available-for-sale securities

(534)

4,150

Foreign currency translation adjustment

(85)

705

Remeasurements of defined benefit plans, net of tax

(55)

(38)

1

(0)

Net income
Other comprehensive income

Share of other comprehensive income of entities accounted forusing equity method
Total other comprehensive income
Comprehensive income

(674)

4,816

13,70522,703

13,57522,486

129

216(Comprehensive income attributable to)
Owners of parent
Non-controlling interests7(3) Consolidated Statements of Cash Flows(Millions of Yen)
Nine Months Ended
December 31, 2016

Nine Months Ended
December 31, 2017

Income before income taxes and non-controlling interests

19,312

23,947

Depreciation and amortization

6,183

7,441

Interest and dividend income

(552)

(631)

Interest expenses

121

99

Loss (gain) on disposal of non-current assets

333

257

Cash flows from operating activities

Decrease (increase) in notes and accounts receivable - trade

12,548

13,169Decrease (increase) in inventories(3,549)(8,023)

Increase (decrease) in notes and accounts payable - trade

3,884

4,171

Other

(555)

(302)

Subtotal

37,72640,129Interest and dividend income received

1,576

1,309

Interest expenses paid

(101)

(85)

Income taxes paid

(8,664)(7,026)

Net cash provided by (used in) operating activities

30,53634,325

Cash flows from investing activities
Purchase of investment securities

(308)

(757)

Proceeds from sales of investment securities

2,988

65

Purchase of property, plant and equipment(8,225)(10,663)

Payments for retirement of property, plant and equipment

(249)

(217)

Purchase of intangible assets

(992)

(407)

Net decrease (increase) in short-term loans receivable

326

591

Purchase of long-term prepaid expenses

(824)

(60)

Other

(549)

(581)

(7,835)(12,030)

Net increase (decrease) in short-term loans payable(15,916)(15,954)

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

Cash dividends paid

(7,680)(9,063)

(52)

(39)

(5,001)(5,001)

Net cash provided by (used in) investing activities
Cash flows from financing activities

Dividends paid to non-controlling interests
Share repurchase
Other

(13)

(11)

(30,145)(31,605)

143

117

Net increase (decrease) in cash and cash equivalents(7,300)(9,192)

Cash and cash equivalents at beginning of period

35,33535,701(25)-

28,01026,508Net 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 period8(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 third 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 third quarter of current consolidated fiscal year.
Segment Information
1. Information Regarding Sales, Income (Loss) of Reportable Segments(Millions of Yen)

1) For the Nine Months Ended December 31, 2016 (From April 1, 2016 to December 31, 2016)
Chemicals

Performance Agricultural
Materials
Chemicals

Pharmaceuticals

Trading

Others

Total

Adjustment(1)

Consolidated
Total

122,069

Sales
Sales to outside customers

18,72434,64525,125

6,095

31,761

5,701

122,054

14

Intersegment Sales

6,844

4,682

3,114

26

9,556

8,741

32,966(32,966)-

Total Sales

25,56939,32728,2406,122

41,317

14,443155,021(32,951)

122,069

Segment Income or Loss
(Operating Income or Loss)

2,605

9,966

4,850

1,380

1,281

181

20,265(1,564)18,700Notes: (1) The (1,564) million yen adjustment in segment income includes (240) million yen in intersegment eliminations, 14 million yen sales
not attributable to any reporting segment, and (1,338) 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 Nine Months Ended December 31, 2017 (From April 1, 2017 to December 31, 2017)
Chemicals

Performance Agricultural
Materials
Chemicals

Pharmaceuticals

Trading(Millions of Yen)
OthersAdjustment(1)

Consolidated
Total

132,680

䠉

132,680

Total

Sales
Sales to outside customers

18,836

39,07029,516

5,807

33,813

5,635

7,087

5,108

2,977

26

11,1798,657

35,037(35,037)

㻙Total Sales

25,924

44,17832,494

5,834

44,992

14,293

167,718(35,037)

132,680

Segment Income or Loss
(Operating Income or Loss)

2,519

11,676

7,459

1,053

1,432

270

24,412(2,020)22,392

Intersegment Sales

Notes: (1) The (2,020) million yen adjustment in segment income includes (218) million yen in intersegment eliminations and (1,801) 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.

9

(Significant Subsequent Events)
The Company, at the board of Director's meeting held on February 2, 2018, has decided to repurchase its shares in the market
under Article 156 of the Japanese Corporation Act, as applied pursuant to Article 165, Paragraph 3 of the same Act.
1. Purpose of repurchaseTo facilitate flexible implementation of capital policy in response to changes in the business environment.
2. Details of repurchase(1) Class of shares: Common shares of the company(2) Total number of shares: Up to 1,000,000 shares(Rate of the maximum shares to be acquired to the total outstanding shares: 0.66%)(3) Total amount: Up to 4,000,000,000 yen(4) Period of repurchase: From February 5, 2018 to April 27, 2018

(For reference) Number of treasury shares as of December 31, 2017
Total number of shares issued(excluding treasury shares)
Number of treasury shares: 150,453,792 shares:

546,208 shares

10