Consolidated Financial Results for the Three Months Ended June 30, 2018
(JPGAAP)
August 3, 2018
Stock Exchange: Tokyo
Name of listed company: NISSAN CHEMICAL CORPORATION
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 4463 8404
Scheduled submission date of quarterly report: August 10, 2018䚷䚷䚷䚷䚷 Scheduled dividend payment date: 䇷Supplemental information: Yes
Financial results meeting : None
(Amounts rounded down to the nearest million yen)

1. Consolidated Financial Results for the Three Months Ended June 30, 2018 (From April 1, 2018 to June 30, 2018)(1) Consolidated Operating Results(% indicates the rate of increase/decrease against the same period of the previous year)

OperatingincomeNet sales

Three months ended June 30, 2018
Three months ended June 30, 2017
(Note) Comprehensive income:Ordinary
incomeNet income attributableto owners of parent

Million yen%

Million yen%

Million yen%

Million yen%

50,877

7.3

10,6796.4

11,902

9.7

8,830

12.0

47,4205.2

10,0405.6

10,851

16.0

7,887

15.5

Three months ended June 30, 2018

: 7,499 million yen , (21.2%)

Three months ended June 30, 2017

: 9,521 million yen , 94.7%

Basic earnings
per share

Diluted net income
per share

Yen

Yen

Three months ended June 30, 2018

59.25

㸫

Three months ended June 30, 2017

52.22

㸫

(2) Consolidated Financial Position
Total assets

Net assets

Equity ratio

Million yen

Million yen%

As of June 30, 2018

220,510

173,313

77.8

As of March 31, 2018

246,040

176,364

71.0(Reference) Shareholders' equity:

As of June 30, 2018

: 171,653 million yen

As of March 31, 2018

: 174,586 million yen

2. Cash Dividends
Cash dividends per shareFirst
quarter

Secondquarter

Yen

Year ended March 31, 2018䠉Year ending March 31, 2019䠉Year ending March 31, 2019
(Forecast)Third
quarter

Yen

Year-end

Yen

Annual

Yen

Yen

32.00

㸫

36.00

68.00

38.00

㸫

40.00

78.00

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

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2019 (From April 1, 2018 to March 31, 2019)(% indicates the rate of increase/decrease against the same period of the previous year)
OperatingincomeNet sales

Ordinary
incomeNet income attributableto owners of parent

Basic earnings
per share

Million yen%

Million yen%

Million yen%

Million yen%

Yen

Six months
ending September 30, 2018

96,700

6.3

18,4006.6

18,8005.4

14,1007.0

94.79

Year ending March 31, 2019

204,000

5.5

36,8005.2

38,0004.9

28,5005.0

191.76(Note) Revision of the latest released forecast of financial results: None
Basic earning per share are modified in consideration of treasury shares that has been implemented until June 8, 2018.

4. Notes(1) Changes in significant consolidated subsidiaries(Changes in specified subsidiaries involving changes in scope of consolidation)(2) Application of special accounting treatment to preparation of quarterly financial statements: None: 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 June 30, 2018

: 150,000,000 shares

As of March 31, 2018

: 151,000,000 shares

2. Number of treasury shares
As of June 30, 2018

: 1,510,948 shares

As of March 31, 2018

: 1,534,562 shares

3. Average number of shares outstanding
As of June 30, 2018

: 149,025,872 shares

As of June 30, 2017

: 151,042,450 shares* Presentation regarding implementation status of quarterly review procedures
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)................................................................................. 9(Additional Information)......................................................................................................................... 9(Segment Information).......................................................................................................................... 9

1

1. Qualitative Information on Quarterly Results(1) Business Performance
During the year ended June 30, 2018 (April 1, 2018 to June 30, 2018), the domestic economy
continued to recover moderately such as increase in capital investment and improvement in
employment and income conditions due to global economy expanding and steady corporate
earnings. Under this circumstance, in the Chemicals Segment, sales of Basic Chemicals remained
unchanged and Fine Chemicals decreased. In the Performance Materials Segment, sales of
Semiconductor Materials was particularly strong. In the Agricultural Chemicals Segment, shipmentsof active ingredients for veterinary pharmaceuticals increased. In the Pharmaceuticals Segment,
sales of "LIVALO" (anti-cholesterol drug) decreased both in Japan and overseas.
As a result, the sales for this period was 50,877 million yen (an increase of 3,456 million yen fromthe same period of the previous year). Operating income was 10,679 million yen (an increase of 638
million yen). Ordinary income was 11,902 million yen (an increase of 1,051 million yen). Net income
attributable to owners of parent was 8,830 million yen (an increase of 942 million yen). Compared to
the first quarter target, the sales was the same level as expected, operating income was above 200
million yen, ordinary income was above 600 million yen and net income attributable to owners ofparent was above 400 million yen.
Explanations by segments are as below.
The Chemicals Segment
In the Basic Chemicals, sales of melamine (adhesive agent for particle board) increased, whilesales of high-purity sulfuric acid (agent used for cleaning semiconductor) decreased. In the Fine
Chemicals, sales of "TEPIC" (epoxy compound for LED sealants) decreased. Despite raw material
and freight price increase, profit overall was maintained due to price revisions.
As a result, sales of this segment was 8,696 million yen (a decrease of 140 million yen) andoperating income was 1,560 million yen (an increase of 41 million yen). Compared to the first quartertarget, net sales was below 500 million yen and operating income was below 100 million yen.
The Performance Materials Segment
In the Display Materials, "SUNEVER" (LCD alignment coating) for smartphone had healthy sales.
In the Semiconductor Materials, sales of bottom anti-reflective coatings for semiconductors (ARC®)
and multi-layer process materials (OptiStack®) increased in response to expanding demand. In the
Inorganic Materials, "SNOWTEX" (semiconductor polishing, hard coating, etc.) had healthy sales.
Sales of Oragno / Monomer sol (various kinds of coating materials, resin additive) was the samelevel as that for the previous year. Sales of Oilfield materials (for enhancing oil recovery) increased.
As a result, sales of this segment was 15,635 million yen (an increase of 1,535 million yen) andoperating income was 3,922 million yen (an increase of 315 million yen). Compared to the firstquarter target, the sales was above 400 million yen and operating income was above 600 million
yen.
*ARC® and OptiStack® are registered trade mark of Brewer Science, Inc.
The Agricultural Chemicals Segment
Shipments of Fluralaner (active ingredients for veterinary pharmaceuticals) expanded, anddomestic sales of "ALTAIR" (paddy rice herbicide) also performed well. In addition, agrochemicals foroverseas such as "PULSOR" (fungicide) increased. On the other hand, sales of "ROUNDUP"(non-selective herbicide) decreased due to the impact of earlier shipments in the previous fiscal year.
As a result, sales of this segment was 16,359 million yen (an increase of 1,758 million yen) andoperating income was 5,136 million yen (an increase of 592 million yen). Compared to the first2

quarter target, net sales was below 900 million yen and operating income was below 500 million yen.
The Pharmaceuticals Segment"LIVALO" sales declined both in Japan and overseas, while "Custom Chemicals" (custom
manufacturing and process researching services for pharmaceutical companies) performed well.
As a result, sales of this segment was 1,845 million yen (a decrease of 302 million yen) andoperating income was 262 million yen (a decrease of 283 million yen). Compared to the first quartertarget, net sales was below 100 million yen and the operating income was same as the forecast.
Trading
Sales of this segment was 17,801 million yen (an increase of 3,249 million yen) and operating
income was 562 million yen (an increase of 139 million yen). Compared to the first quarter target, thesales was below 200 million yen and operating income was above 100 million yen.
OthersSales of this segment was 4,600 million yen (a decrease of 780 million yen) and operating income
was 71 million yen (a decrease of 56 million yen).
(2) Financial Position(Position of Assets, Liabilities and Net Assets)
Total assets as of June 30, 2018 was 220,510 million yen (a decrease of 25,530 million yen fromMarch 31, 2018). It is mainly due to the decrease of cash and deposits.
Also, total liabilities as of June 30, 2018 was 47,196 million yen (a decrease of 22,479 million yen).
It is mainly due to the decrease of short-term loans payable.
Net assets as of June 30, 2018 was 173,313 million yen (a decrease of 3,050 million yen).
 As a result of these factors, equity ratio was 77.8% (an increase of 6.8% from March 31, 2018).
(Position of Cash Flow)
Deducting income taxes paid from income before income taxes and non-controlling interests,
depreciation and gain and loss on working capital, net cash provided by operating activities for thethree months ended June 30, 2018 was 6,468 million yen (11,283 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 threemonths ended June 30, 2018 was 3,993 million yen (4,353 million yen).
Due to the decrease in loans payable, payment for dividends and share repurchase, net cashused in financing activities for the three months ended June 30, 2018 was 26,125 million yen (18,347
million yen).
As a result of these factors, cash and cash equivalents at the end of this period was 14,106 million
yen, reflecting exchange of 54 million yen. It decreased by 23,595 million yen from March 31, 2018(24,263 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, 2019 from the statement announced on May 11, 2018.
(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(Million yen)
As ofMarch 31, 2018

As ofJune 30, 2018

AssetsCurrent assets
Cash and deposits

37,702

14,106

Notes and accounts receivable - trade65,422

62,913Merchandise and finished goods

29,85530,938115

505

Raw materials and supplies

7,797

8,615

Other

4,748

4,665

Work in process

Allowance for doubtful accounts

(34)

(31)

145,606

121,711

Buildings and structures, net

24,411

24,179Other, net

30,062

29,700Total property, plant and equipment

54,47353,879Software

775

778

Other

993

911

1,768

1,689

Investment securities

38,51737,653

Other

5,766

5,667

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

Intangible assets

Total intangible assets
Investments and other assets

Allowance for doubtful accounts

(92)

(92)

Total investments and other assets

44,191

43,229100,433

98,798246,040

220,510

Total non-current assets
Total assets

4

(Million yen)
As ofJune 30, 2018

As ofMarch 31, 2018
Liabilities
Current liabilities
Notes and accounts payable - trade18,57915,190

Short-term loans payable

26,145

10,616

Income taxes payable

5,156

2,364

Provision for bonuses

2,011

630

27

6

Provision for directors' bonuses
Other

10,95011,613

Total current liabilities

62,87140,420

2,446

2,446

Provision for business structure improvement

516

412

Provision for loss on business of subsidiaries and affiliates

309

309

Net defined benefit liability

126

192

Other

3,406

3,415

Total non-current liabilities

6,804

6,775

69,67547,196

Capital stock

18,942

18,942

Capital surplus

13,613

13,613Retained earnings

133,822

133,077

Treasury shares(5,962)(6,767)

Total shareholders' equity

160,416

158,865

Non-current liabilities
Long-term loans payable

Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
13,653

12,338Foreign currency translation adjustment

Valuation difference on available-for-sale securities

125

71

Remeasurements of defined benefit plans

390

377

14,17012,788

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

5

1,778

1,660

176,364

173,313

246,040

220,510

(2) Consolidated Statements of Income / Consolidated Statements of Comprehensive Income- Consolidated Statements of Income(Million yen)Three Months Ended
June 30, 2017

Three Months Ended
June 30, 2018

Net sales

47,42050,877

Cost of sales

26,33328,296Gross profit

21,087

22,581

Selling, general and administrative expenses

11,047

11,901

Operating income

10,04010,679Interest income

56Dividend income

294

308

Equity in earnings of affiliates

288

316

Non-operating income

Other

335

706

Total non-operating income

922

1,337

Non-operating expenses
Interest expenses

40

36

Loss on disposal of non-current assets

50

53

Other

21

24

Total non- operating expenses

112

114

10,851

11,902Extraordinary income

Ordinary income--

Extraordinary losses--

Income before income taxes and non-controlling interests

10,851

11,902

Income taxes - current

2,244

2,273

Income taxes - deferred

643

735

Total income taxes

2,888

3,008

Net income

7,962

8,893

74

63

7,887

8,830

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

6

- Consolidated Statements of Comprehensive Income(Million yen)Three Months Ended
June 30, 2017

Three Months Ended
June 30, 2018

7,962

8,893

Valuation difference on available-for-sale securities

1,815(1,315)

Foreign currency translation adjustment

(242)

(66)

Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted forusing equity method
Total other comprehensive income

(12)

(13)

(0)

0

1,559

(1,394)

9,521

7,499

9,473

7,448

47

50

Net income
Other comprehensive income

Comprehensive income(Comprehensive income attributable to)
Owners of parent
Non-controlling interests7(3) Consolidated Statements of Cash Flows(Million yen)Three Months Ended
June 30, 2017

Three Months Ended
June 30, 2018

Income before income taxes and non-controlling interests

10,851

11,902

Depreciation and amortization

2,203

2,434

Interest and dividend income

(299)

(315)

Interest expenses

40

36

Loss (gain) on disposal of non-current assets

50

53

Cash flows from operating activities

Decrease (increase) in notes and accounts receivable - trade

3,280

2,476

Decrease (increase) in inventories(1,118)(2,322)(913)(3,346)

84(112)

Increase (decrease) in notes and accounts payable - trade
Other
Subtotal

14,17910,808Interest and dividend income received

359

487

Interest expenses paid

(23)

(25)

Income taxes paid

(3,232)(4,801)

Net cash provided by (used in) operating activities

11,283

6,468

(2)

(902)

Cash flows from investing activities
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of property, plant and equipment
Payments for retirement of property, plant and equipment
Net decrease (increase) in short-term loans receivable

1396(4,268)(2,504)

(48)

(43)

65

(917)

(100)

(21)

(4,353)(3,993)

Net increase (decrease) in short-term loans payable(9,054)(15,575)

Cash dividends paid

(4,249)(5,380)

(39)

(167)

(5,000)(5,001)(4)(0)(18,347)(26,125)(21)

54

Net increase (decrease) in cash and cash equivalents(11,438)(23,595)

Cash and cash equivalents at beginning of period

35,70137,702

Cash and cash equivalents at end of period

24,263

14,106Other
Net cash provided by (used in) investing activities
Cash flows from financing activities

Dividends paid to non-controlling interests
Share repurchase
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents8(4) Notes to Consolidated Financial Statements(Notes on Assumption of Going Concern)
Not applicable.
(Notes on Significant Changes in Shareholders' Equity)
The Company canceled 1,000,000 treasury shares on May 8, 2018 based on the resolution of Board of Directors' meeting held on April 24, 2018.
As a result, retained earnings and treasury shares decreased by 4,195 million yen during the first quarter of current consolidated fiscal year.
Also, the Company repurchased its own shares based on the resolution of Board of Directors' meeting held on May 11, 2018. As a result, treasury
shares increased by 4,999 million yen during the first quarter of current consolidated fiscal year.
(Additional Information)"Partial Amendments to Accounting Standard for Tax Effect Accounting" (ASBJ Statement No. 28, February 16, 2018) was adopted from the
beginning of the first quarter of this fiscal year. As a result, deferred tax assets are classified as "Investment and other assets" and deferred
tax liabilities are classified as "Non-current liabilities" respectively.
Segment Information
1. Information Regarding Sales, Income (Loss) of Reportable Segments(Million yen)

1) For the Three Months Ended June 30, 2017 (From April 1, 2017 to June 30, 2017)
Chemicals

Performance Agricultural
Materials
Chemicals

Pharmaceuticals

Trading

Others

Total

Adjustment(1)

Consolidated
Total

47,420

Sales
Sales to outside customers

6,432

12,50913,354

2,121

11,134

1,866

47,420㻙Intersegment Sales

2,404

1,589

1,246

26

3,417

3,514

12,199(12,199)㻙Total Sales

8,836

14,09914,601

2,148

14,552

5,381

59,619(12,199)

47,420

Segment Income or Loss
(Operating Income or Loss)

1,518

3,606

4,543

545

422

128

10,765(725)

10,040Notes: (1) The (725) million yen adjustment in segment income includes (95) million yen in intersegment eliminations and (629) 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.
(Million yen)

2) For the Three Months Ended June 30, 2018 (From April 1, 2018 to June 30, 2018)
Chemicals

Performance Agricultural
Materials
Chemicals

Pharmaceuticals

Trading

Others

Total

Adjustment(1)

Consolidated
Total

50,877

Sales
Sales to outside customers

6,235

13,90014,972

1,845

11,982

1,940

50,877

㻙Intersegment Sales

2,460

1,734

1,386

㻙

5,819

2,660

14,062(14,062)㻙Total Sales

8,696

15,635

16,3591,845

17,801

4,600

64,940(14,062)

50,877

Segment Income or Loss
(Operating Income or Loss)

1,560

3,922

5,136

262

562

71

11,514(835)

10,679Notes: (1) The (835) million yen adjustment in segment income includes (81) million yen in intersegment eliminations and (754) 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