Nissan Chemical Corporation
3Q FY2021 Financial Results Briefing
Presenter:
MIYAZAKI Junichi Director, Senior Executive Vice President & CFO
February 4, 2022

I’m Miyazaki, Vice President. I’d like to get started. Please see page 4. This is a summary of 3Q results.
First, 3Q alone. Sales increased by JPY5.8 billion, operating profit increased by JPY7.0 billion, and net income
increased by JPY4.8 billion.
Regarding operating profit. As you can see at the bottom of this page, in the point number one note, pleaserefer to page 51 and page 5. The impact of the change in accounting policies resulted in an increase of JPY4.0
billion. As a result, the actual operating profit was an increase of JPY3.0 billion from the previous fiscal year.
Next is the cumulative total for the first three quarters. Operating profit increased by JPY10.3 billion. Excluding
the impact of accounting policies of JPY3.1 billion, the actual operating profit was an increase of JPY7.2 billion.
Net income increased by JPY7.2 billion, and the figures for operating profit, ordinary profit, and net income
were all record highs for the first three quarters of the fiscal year. The previous high was in December of 2018,
so this record was updated.
Compared to the outlook for the 3Q, sales were JPY2.8 billion higher, operating profit was JPY3.2 billion higher,
and net income was JPY2.0 billion higher.
Shareholder return for the first three quarters was JPY50 for the interim dividend, an increase of JPY4 fromthe previous fiscal year. We also conducted a share repurchase of JPY7.0 billion in July.

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Next, please see page 5. This is the overall figure.
In the middle of the page, you can see the cumulative results for the first three quarters of FY2021. Sales,
operating profit, ordinary profit, and net income were JPY141.3 billion, JPY33.9 billion, JPY35.8 billion, andJPY25.6 billion, respectively.
In 3Q, operating profit was JPY12.6 billion, ordinary profit was JPY13.5 billion, and net income was JPY9.3
billion.
On the right side of the page, compared to the same period last year, sales increased by JPY3.1 billion,
operating profit by JPY10.3 billion, and net income by JPY7.2 billion.
As you can see in the second line from the bottom of the table, the exchange rate during this period was
JPY110 for 1H of FY2021 and JPY114 for 3Q, resulting in a weighted average of JPY111, which is JPY5 weaker
than last year’s JPY106.

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Please see page 6.
This is a comparison to the outlook. Sales increased by JPY2.8 billion, operating profit increased by JPY3.2
billion, ordinary profit increased by JPY3.7 billion, and net income increased by JPY2.0 billion.

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Next, please see page 7.
This is an analysis of changes in operating profit. Again, it is an increase of JPY7.0 billion compared to the same
period last year, but the actual increase was JPY3.0 billion.
Operating profit of Chemicals increased by JPY0.6 billion over the same period last year. In 3Q, we achieved a
JPY0.3 billion increase compared to the outlook, with the strong performance of melamine and TEPIC being amajor factor.
Operating profit of Performance Materials was JPY1.3 billion higher than the same period last year and JPY1.0
billion higher than the outlook, mainly due to strong sales of Display Materials and Semis Materials.
In the Agrochemicals, the impact of the accounting policies change was concentrated, and the YoY increase
was JPY4.4 billion, but the actual increase was JPY0.4 billion because the change in accounting policies
resulted in an increase of JPY4.0 billion. Compared to the outlook, we have increased our performance by
JPY1.1 billion.
In the Pharmaceuticals, sales of LIVALO decreased, but Custom Chemicals performed well, and operating
profit increased by JPY0.4 billion YoY. This is an increase of JPY0.1 billion over the outlook.
Looking at the first three quarters of the fiscal year, operating profit increased by JPY10.3 billion compared tothe same period last year, with JPY1.9 billion growth in Chemicals, JPY3.8 billion growth in Performance
Materials, JPY3.6 billion growth in Agrochemicals, and JPY0.9 billion growth in Pharmaceuticals.
Excluding the JPY3.1 billion increase in Agrochemicals due to a change in accounting policies, the actual
increase was JPY0.5 billion.

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Next, please see page 8.
This shows the trend of non‐operating income and expenses and extraordinary income and loss.
Looking at non‐operating income and expenses for the first three quarters compared to the same period of
the previous fiscal year, it increased by JPY1.43 billion.
Extraordinary income was JPY0.5 billion in 3Q due to a gain on the sale of investment securities. In addition,
there was an extraordinary loss of JPY0.3 billion due to impairment of unlisted stocks.

5Page 9, the status of cash flow.
As in the previous year, we have ample cash flow.
Operating cash flow increased by JPY0.4 billion compared to the same period last year, which is an increase
in working capital. The increase in operating cash flow was smaller mainly due to a large increase in tradereceivables and inventories in Agrochemicals.
On the other hand, cash flow from investments was positive JPY4.1 billion compared to the previous fiscal
year. This mainly resulted from the absence of the recording of JPY5.4 billion for the acquisition of DITHANE
last year.
Net cash used in financing activities increased by JPY1.7 billion, mainly due to an increase in dividends.
As a result, cash and cash equivalents increased by JPY4.6 billion to JPY25.2 billion at the end of December
2021.

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Next, page 10 is the balance sheet.
As for total assets, they were JPY265.5 billion as of the end of March. As of the end of December, they were
JPY254.7 billion, which is a decrease of JPY10.8 billion.
Below are investment securities. As you can see in the note on the right side, as a result of the sale of them,et cetera, the amount is JPY19.1 billion, a decrease of JPY5.3 billion from JPY24.4 billion at the end of March
2021.
The number of stocks held has decreased from 35 in December 2020 to 30.
As for the equity ratio, on the right, it was 77.5% at the end of December 2021.

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We will now move on to the explanation of the segments.
Page 12 is a summary table of YoY comparisons. Please refer to it later. Page 13 is a table that summarizes thecomparison to the outlook.

Let’s start with the Chemicals segment. Please see page 15.
This shows the YoY trend in sales of main products.
As for Fine Chemicals, TEPIC and environmental related products, as you can see from the figures here, thecumulative total for the three quarters increased by 19%, which is higher than our outlook for the 3Q, although
we do not provide the figures for each product.
As for Basic Chemicals, the total for the first three quarters of the fiscal year was up 20%, with melamine inparticular posting a 65% increase. Also, as for melamine, we have achieved 99% growth for 3Q alone.
All of our main products have exceeded our outlook.

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Page 16 shows the YoY profit and loss trend.
First of all, Fine Chemicals, in the lower left‐hand corner, has increased its sales and profits for 3Q, and for the
first three quarters, respectively.
TEPIC for general applications, in particular, has seen a notable increase in price. Sales of TEPIC for electronicmaterials decreased for 3Q due to the shortage of semiconductors.
Sales of environmental related products increased due to the capacity expansion for isocyanuric acid.
As you can see at the bottom of the page, there were cost factors, such as high feedstock and raw materials
and high shipping costs, but we were able to increase profits.
In terms of Basic Chemicals, as I have just explained, all of our main products have increased in sales andprofits, despite the high cost of feedstock and raw materials and the increase in shipping costs.
As a result, operating profit increased by JPY1.9 billion in the segment in the first three quarters.

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Next, let’s move on to page 17.
As for the comparison to the outlook for 3Q, sales of Fine Chemicals were up, but the figure was a little lower
than the target due to the high cost of feedstock and raw materials.
On the other hand, sales and profits of Basic Chemicals were up due to higher sales of main products.
For the segment as a whole, 3Q saw an upturn in profit of JPY0.3 billion.

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Next is page 19.
This is about the effect of shutdown of melamine, which was mentioned in the previous presentationmaterials. The content of the page has not been changed.

Next, let’s move on to Performance Materials.
As you can see in the bar graph on page 21, overall sales increased from the first three quarters of the previous
fiscal year. In the first three quarters, sales increased more than the outlook.

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Let me explain about SUNEVER. Please see page 22.
In 3Q alone, sales were up 2%, and in the first three quarters, sales were up 5%, which is higher than ouroutlook.

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Next, on page 23, you will see the numbers for each sub‐segment.
For Display Materials, including SUNEVER I mentioned earlier, sales growth was positive 6% in the first threequarters, which is also higher than our outlook.
Semis Materials, including ARC and other semis materials, increased YoY. It is also up from the outlook.
Inorganic Materials are also performing well, except for Oilfield Materials.
As a result, Inorganic Materials increased by 17% in the first three quarters. On the other hand, Semis
Materials increased by 20%.

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Next is Performance Materials. Please see page 24. It shows the YoY comparison.
First is Display Materials. Photo IPS is performing well in the non‐smartphone field, especially in the small‐and medium‐sized fields, and sales are up in both 3Q and the first three quarters.
As for rubbing IPS, the shift to photo IPS is progressing further, so the figure was negative.
VA sales increased in 3Q alone but declined slightly in the first three quarters, due to the impact of line
reductions by customers in South Korea. In terms of revenue, Display Materials sales and profits increased inboth 3Q and the first three quarters of the fiscal year.
Next, Semis Materials. ARC and other materials have all been performing very well, resulting in increased sales
and profits for 3Q alone as well as for the first three quarters.
Sales of Inorganic Materials also increased, and although Oilfield materials sales were slightly down, overallsales and profits increased.

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On page 25, the comparison to the outlook of Performance Materials.
Overall, operating profit was up by JPY1.0 billion. For Display Materials, photo IPS was also up, reflecting thestrong performance of notebooks and others.
Rubbing IPS is on the downswing, and among the rubbing products, large‐sized products and smartphones
are on the downswing, while small‐ and medium‐sized products are on the upside.
For VA, sales are on the upswing.
Next is Semis Materials. Both sales and profits are on the upswing. ARC and other semis materials are also on
the upside.
Inorganic Materials. In SNOWTEX, sales of non‐polishing products were slightly down due to inventory
adjustments, but sales of polishing products were strong.
Sales of Organo/Monomer Sol were up, while Oilfield Materials were down, and other materials were also up,
so overall sales and profits were up.

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Next, Agrochemicals. Please see page 27.
First, let’s look at the sales trends of the main products.
The segment as a whole posted a significant increase in sales, with a positive 11% in the first three quarters.
This exceeds our outlook.
There are individual factors. TARGA, the fourth, LEIMAY, the seventh, and DITHANE, the lowest, below thetargets, while the others exceeded the targets.
As you can see in the bar graph below, sales in GRACIA, in particular, exceeded our outlook by a considerable
margin. The original outlook for the first three quarters of the fiscal year was a YoY decline of 52%, but wecame to a decline of 32%, so the situation considerably recovered.

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I will explain the status of each product as well as the revenue trend on page 28.
First, ROUNDUP. As for 3Q and the first three quarters, we announced that we would raise prices in December,so there was a rush of demand in 3Q. This was a major factor.
For Fluralaner, the first time we recorded royalties in 3Q alone, due to a change in accounting policies, resulted
in a very significant transition. Looking at the first three quarters, sales of APIs decreased, but as I mentioned
earlier, the recording of royalties in 3Q was a major factor in the increase.
For ALTAIR, sales increased slightly in 3Q, but for the first three quarters saw, there was an anomaly in FY2020,
with very large numbers, and therefore in FY2021, sales normalized and declined.
Then, TARGA. Sales in both 3Q and the first three quarters increased largely due to the launch of a mixture
product for India.
Looking at GRACIA in 3Q alone, sales have increased partly because distribution stock has been decreasing
and the need for pest control was greater than expected. In terms of exports, the increase in sales from thelaunch of product for India has made a contribution. However, the first three quarters saw a decline in sales
due to the impact of lower sales in 1H.
In terms of PERMIT, sales decreased slightly in 3Q, but increased in the first three quarters.
For LEIMAY, sales decreased slightly in 3Q, but increased in the first three quarters.

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In 3Q, QUINTEC had earlier shipments from 4Q, resulting in positive figures. The first three quarters saw also
a significant increase in sales due to the positive effects of both shipment shifted from 4Q of FY2020 to 1Q of
FY2021 and shipment shifted from 4Q of FY2021 to 3Q of FY2021.
As for DITHANE, sales started in 4Q of last fiscal year, so sales recorded was equal to the increase in sales.

As for the comparison with the outlook, please see page 29.
Compared to the outlook, operating profit was positive at JPY1.1 billion.
Looking at the products, ROUNDUP has been greatly affected by the rush demand I mentioned earlier.
On the other hand, with regard to Fluralaner, the shipment level of APIs was almost as expected, but the
upward swing in royalties led to an upward swing in sales. It is a small upside.
For TARGA, it was below the target due to the fact that shipment shifted to 4Q.
GRACIA, as I mentioned earlier, there was a greater need for pest control than expected, and there were newlaunches on the market, which led to a positive result.
PERMIT is also up modestly.
LEIMAY below the target. This is due to the delay in overseas ship delivery.
QUINTEC, on the other hand, is ahead of schedule.

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The downside for DITHANE is a small amount.

Page 30 is an explanation of Fluralaner.
There are no particular changes from 2Q.

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Page 31 shows the sales trend of Fluralaner.
The analysis on this page itself has not changed either. Therefore, as you can see on the right, our view that
BRAVECTO’s sales will continue to get some adjustment until bottoming out in FY2022 has not changed.
However, we are aware that inventory adjustment is progressing.

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Page 32 is also from the previous materials, which are an overview of the acquisition of DITHANE and QUINTEC.

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Page 33, details of the joint venture company in India, is also unchanged.

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I’ll move on to the Pharmaceuticals segment. Please see page 35.
As you can see, Drug Discovery increased by JPY0.02 billion YoY, and decreased JPY0.06 billion for the first
three quarters, while Custom Chemicals increased by JPY0.46 billion in 3Q alone and JPY0.96 billion for the
first three quarters.
Although LIVALO, which falls under Drug Discovery, recorded a decrease in sales and an increase in profits in
3Q alone, and there was the impact of inventory adjustment, it had a positive effect, resulting in a slightincrease in profits.
As for the first three quarters, domestic sales increased while export sales decreased, resulting in a decreasein sales and profit.
On the other hand, Custom Chemicals’ profit increased due to strong shipments of generic APIs in 3Q, or the
first three quarters, and also due to a slight shifted in shipments.

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Please refer to page 36 for the comparison to the outlook.
As for Drug Discovery, operating profit for 3Q was just in line with our outlook, and Custom Chemicals
increased JPY0.13 billion, which reflects the strong performance of generic APIs.

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Next, the outlook. Please see page 38.
The full‐year outlook for operating profit is JPY50 billion, which is an increase of JPY2.6 billion from theprevious outlook, which is an upward revision of operating profit.
We combined the actual results for the first three quarters I have just explained, with the figures based on 4Q
outlook used in the announcement of 2Q results to formulate the full‐year outlook.
Originally, we do not review Company‐wide budget figures in 3Q. For each segment, we roughly looked at thesituation of 4Q, and although there may be some ups and downs, we concluded that there is no significant
difference that would change our outlook as a whole, so we have not changed our outlook.
One thing I would like to mention is that, in the 4Q outlook, we found an error in the calculation of theconsolidated adjustments, so we have subtracted JPY0.6 billion from the previous outlook.
The other difference from the 4Q outlook we announced in November is that, in the November outlook, we
included a JPY1.0 billion gain from the sale of securities in 4Q as an extraordinary gain, but we canceled thesale and have factored this into the outlook.
The sale of securities has two purposes. One is to respond to corporate governance and the other is to cover
the extraordinary loss, but we have already sold a sufficiently large amount of securities to respond to
governance and to cover the extraordinary loss.
In addition, since we cannot sell the shares at our sole discretion, we have decided not to sell the shares in
4Q, while monitoring the progress of negotiations with the investees.

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As a result, compared to the same period of the previous fiscal year, operating profit increased by JPY7.5
billion, an increase of 18%. Net income increased by JPY3.8 billion, which is a positive 11%. This will be theeighth consecutive year of record‐high operating profit and ordinary profit, and the ninth consecutive year ofrecord‐high net income.
ROE is currently expected to be 18.6%. Last year’s actual figure was 17.5%, and the expected figure announced
in 2Q result was 18.1%. Compared to the previous outlook, operating profit increased by JPY2.6 billion andnet income increased by JPY0.9 billion due to the elimination of JPY1.0 billion in extraordinary income.
As for shareholder returns, we have increased the year‐end dividend outlook by JPY10 to JPY68. Therefore,
the full‐year dividend will be JPY118, which is an increase of JPY14 over last year.
In addition, we have announced today that we will conduct share repurchase of JPY5.0 billion. As a result, theCompany’s total payout ratio is expected to be 77.1%.

Please see the figures on page 39 for more details.
Operating profit for 4Q was JPY16.7 billion in the November announcement, but we have corrected the error
in the calculation of the consolidation adjustment mentioned earlier and set the figure at JPY16.1 billion.
In the extraordinary income section, the November announcement included JPY1.0 billion, but this time it is
zero.

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Page 40 contains the figures for 3Q and 4Q, respectively, by segment.

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Please see page 41.
This is a comparison of the previous outlook of segment profit, November, and the current outlook, February.
If you look at 4Q vertically, you will see that each segment has not changed. The figure that has changed isthe operating profit of the adjustment amount on the third line from the bottom, which has been changed
from minus JPY0.3 billion to minus JPY0.9 billion.

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Next, you can skip to page 49.
As for ESG‐related changes since the last financial results briefing, first of all, we have been selected as aconstituent stock of the Dow Jones Sustainability Asia Pacific Index in the upper left corner for four
consecutive years.
As for CDP, on the third left from the top, we were listed on A‐list for Water Security for the third year in arow.
And the second from the top on the right, in December, we were selected for constituent in MSCI Japan
Empowering Women (WIN) Select Index.

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Finally, on page 51 is a summary of changes in accounting policies, which I hope you will find helpful. That is
all.

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Comments on the business environment(Person in charge of each business)<Chemicals Division>
In general, 3Q and 4Q both continued to see a rise in the price of feedstock and raw materials, and shipping
costs, especially the price of ships for export. Also, the difficulty of booking is a factor that is dragging us down.
Amid such situation, 3Q’s results compared to the same period of the previous year showed an increase inboth sales and profits, thanks to price hikes for melamine and TEPIC exports and an overall increase in volume,
which offset the increases in feedstock and raw material costs and shipping costs I just mentioned.
As for 3Q outlook, both sales and profits have increased due to the effect of the price hike of melamine and
TEPIC, as well as an increase in volume.
As for 4Q outlook, natural gas is expected to continue to worsen compared to the outlook, and ship prices arerising, making it difficult to make bookings, and exports are moving backward. However, sales of all products
are strong, and we expect to achieve the budget for both sales and operating profit, driven by melamine,
TEPIC, and AdBlue.

<Display Materials Department, Performance Materials Division>
First is the comparison with the same period of the previous fiscal year for 3Q alone.
While sales of rubbing IPS decreased due to operation adjustments at some customers and the ongoing
conversion to photo IPS technology, overall sales and profits increased due to strong VA customer operationand photo IPS conversion from rubbing IPS, in addition to increased demand mainly for notebook PCs.
Compared to the outlook for 3Q, sales of rubbing IPS decreased due to capacity adjustments at somecustomers, while VA customers operated at high levels. Overall sales and profits increased due to steady salesof photo IPS for IT applications.
Finally, as for 4Q outlook, we expect to meet the outlook figures for each application due to the recovery
trend of rubbing IPS from the operation adjustment in 3Q and the continued strong performance of VA andphoto IPS.

<Semiconductor Materials Department, Performance Materials Division>
First of all, compared to the same period of the previous year, sales in 3Q increased due to increased
production by multiple customers. In order of contribution, China, South Korea, and Taiwan were the largest
contributors. By material, the order is ArF, KrF, multilayer process materials, and EUV.
As compared to the outlook for 3Q, sales increased mainly to Chinese customers. This was due to the fact thatthe supply shortage in 1H of the year was resolved in 3Q, and some shipments for 4Q were shifted to 3Q.
Overall Semis Materials sales also saw a slight upturn.

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As for 4Q outlook, there is almost no change in the operating volume of each customer from the previous
outlook, but we expect a slight decrease in sales due to shifting the shipment planned in 4Q for China to 3Q
as mentioned earlier.
<Inorganic Materials Department, Performance Materials Division>
As for the YoY comparisons for 3Q alone, both sales and profits increased compared to the previous fiscal
year. Sales of SNOWTEX increased. Last year, we were greatly affected by the COVID‐19 pandemic, but thisfiscal year, we continue to see steady growth in automotive and semiconductor‐related products.
Sales of Organo/Monomer Sol also increased. This was also due to the recovery from the pandemic and strong
sales of electronic materials. Sales of Oilfield Materials decreased. The reason for this is that we received
orders for large‐scale projects last year.
Next is the comparison to the outlook for 3Q alone. Both sales and operating profit were above the targets.
Sales of SNOWTEX were below the target. Demand has been strong, but due to the impact of regular repairs,
inventories have fallen, and shipments have been adjusted. Sales of Organo/Monomer Sol exceeded thetarget. This was due to a sharp rise in prices of electronic materials. Sales of Oilfield Materials below the target.
Next, the comparison to the outlook for 4Q alone. We expect to achieve our target for sales. We expect toachieve our targets for SNOWTEX, Organo/Monomer Sol, and Oilfield Materials.
One of the concerns is that we do not have enough ships to transport the raw materials for SNOWTEX fromJapan to the US plant. If it is prolonged, there will be concerns about future supply.

<Agrochemicals Division>
First of all, as for the YoY comparison to 3Q alone. In summary, results for all main products exceeded thoseof the same period of the previous year. Looking at each product category, domestic demand for GRACIA has
been increasing due to the relatively high temperature in autumn, in addition to the progress in adjustment
of distribution stock. Additionally, we shipped GRACIA to India for the first time.
As for ROUNDUP, we are experiencing temporary demand in anticipation of a price hike in December.
With regard to QUINTEC for overseas, shipments to the US were changed from 4Q to 3Q, resulting in asignificant increase over the same period last year.
In the animal health product, sales of APIs were almost the same as the same period of the previous fiscal
year, but sales of royalties were significantly higher than the previous fiscal year due to the application of new
accounting policies.
Next, as for the comparison to the outlook for 3Q alone. The overall results were above the target. As for
TARGA, it was below the target due to a shift in shipments to India from 3Q to 4Q. In terms of LEIMAY, due todelays in manufacturing caused by logistics conditions and other factors, it declined in overseas sales as well,
but this was offset by the growth in other main products as mentioned earlier, resulting in an overall increasein sales.
Lastly, the outlook for 4Q alone. At the moment, the outlook for 4Q is expected to be the same as the current
outlook. As for ALTAIR, although there will be some impact from distribution inventory and sluggish rice prices,
we expect to achieve the same level of performance as the outlook due to the projected growth of new
herbicide that will be launched for full‐scale sales this year.

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Domestic sales of GRACIA will be in line with the outlook due to the progress in sales of distribution inventory,
but overseas sales of GRACIA will be lower due to the remaining impact of inventory for Korea. The overall
outlook for GRACIA will also be lower.
As for ROUNDUP, we expect a slight downturn due to the temporary demand caused by the price hike I
mentioned earlier and the reaction to it. Overseas, while QUINTEC’s sales have been affected by earlier
shipments, the sales of TARGA to India are expected to be realized in 4Q, which was delayed from 3Q. We areforecasting to exceed the outlook due to the launch of TARGA mixture product in India, which is expected to
expand sales.
Finally, in the animal health products, sales of APIs will be slightly down. We are forecasting a slight upturn insales of royalties, and a slight downturn in sales of the animal health products as a whole.

<Pharmaceuticals Division>
First of all, the Drug Discovery business saw a decline in 3Q alone compared to the previous fiscal year due toearly shipments of LIVALO in 1H. In Custom Chemicals, shipments of Eldecalcitol were concentrated in 2Q and
3Q, resulting in positive results. Overall, sales of Pharmaceuticals were positive.
Next, the comparison with the outlook for 3Q alone. In Drug Discovery, profit was in line with the outlook due
to lower fixed costs, although LIVALO was below the target. Custom Chemicals sales and profits were above
the target. Overall profits for Pharmaceuticals exceeded the outlook.
Finally, the outlook for 4Q alone. In Drug Discovery, LIVALO will be pushed back from 3Q. Custom Chemicals
expects to achieve the budget for the entire Pharmaceutical business due to an increase in sales of
Maxacalcitol.

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Question & Answer<Questioner 1>
Q: The first is about photo IPS of SUNEVER, this year, the market itself has been strong and there has been ashift from rubbing. I would like to know if there is still room for growth from here on for the next fiscal year.
A: As for photo IPS, we expect that demand will continue to increase in the next fiscal year as the shift tophoto IPS for IT applications progresses. The reason behind this is that each of our customers is planning tofurther increase their photo IPS production capacity, and we expect to increase our sales in the next fiscal
year to accommodate their production.
Q: Thank you very much. Next in the area of Agrochemicals, GRACIA significantly fell short of the outlook
during 1H of the fiscal year and exceeded the outlook in 3Q. Is it correct that this does not mean that you havelowered the outlook of 2H of the fiscal year considerably as of 1H of the year, but that it has come back?
Also, it looks like you have quite a lot of inventories in Agrochemicals in general and in your company as awhole. Are they composed mainly of Agrochemicals and is this okay because you can sell them in 4Q?
A: As for GRACIA, the inventories are expected to have a considerable impact. However, the high temperaturein the fall in 3Q led to a considerable increase in the number of insect pests, which resulted in higher demandand better inventory clearance than we had predicted.
As for inventories, as you mentioned, the demand periods are just around the corner. We are assuming that
we can almost sell them in 4Q.
Q: Is it correct to say that there is no particular segment other than Agrochemicals where profits have been
higher than expected in 3Q due to the increase in inventories?
A: There is nothing special about that.

<Questioner 2>
Q: I first would like to ask you about Semis Materials in Performance Materials. Can you tell us what thesituation will be like in 3Q and 4Q for this segment?
A: The situation is expected to the same in 3Q and 4Q. However, as I explained earlier, we are projecting that
there will be a negative impact from a shift in shipments, which will be caused by the early shipments to
Chinese customer made in 3Q.
Q: Which products were for the earlier shipments to China?
A: We shipped all main products equally, considering the impact of the Chinese New Year.
Q: I understand. Excluding that, roughly from 3Q to 4Q, will KrF, ArF, and others maintain roughly at the samelevel? Is there any adjustment in the Semis Materials at the moment?
A: Yes we see the same level and there are no adjustments to be made.

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Q: I understand. There’s one more thing to ask, which is about Fluralaner. You said that you forecasted anegative 3% in the full‐year, but I wonder if you have changed your view on this.
In the explanation earlier, you seem to have mentioned that 4Q will be slightly below the outlook. I think thisis probably just for 4Q, so if you look at the full year, will this minus 3% change?
A: What I was talking about earlier was a little bit of a downswing in 4Q. It was just for 4Q, and I think we’reseeing a slight uptick overall.
Q: Thank you. Also, It was explained that FY2022 is the bottom, but specifically, for example, will the market
bottom out to some extent in 1H of FY2022, or will it continue to adjust throughout the rest of the fiscal year?
A: It is hard to say where the bottom will be in FY2022, because we are not looking at it that closely. Also, wewill announce the financial result in May 2022, so I think it will be a little clearer at that time.

<Questioner 3>
Q: The first question is about Performance Materials on page 25. In this 3Q, while sales exceeded the target
by JPY0.4 billion, operating profit exceeded the target by JPY1.0 billion, could you please tell me the reasonof this gap?
A: As for the reasons for the increase in profit, the main factors are the JPY0.4 billion decrease in fixed costs
and the large increase in photo IPS sales in the Display Materials.
Q: I see. The second question is about fixed costs. In the 3Q results, there was a profit increase of JPY0.4 billion
in the Performance Materials, and I think there was a profit increase of JPY0.1 billion in Agrochemicals also. I
think the plan for 2H of the fiscal year originally factored in the increase in travel and transportation expenses
due to the control of the COVID‐19 infection, so if the current situation continues in 4Q, is it likely that the
fixed costs will be less used? Or should we not be so optimistic about the fixed costs in 4Q, as some of theexpenses will be postponed from 3Q to 4Q? Can you tell us more about the fixed cost situation?
A: We have not budgeted that much for travel and transportation expenses, so we do not expect to see alarge saving in 4Q. The unaccounted for fixed costs in 3Q was partly due to the delay in R&D expenses.
Q: I understand. Is that R&D expenses going to be pushed back from 3Q to 4Q and be digested in 4Q? Are
there almost no expenses to be getting pushed back?
A: Yes, there is such tendency for R&D expenses. Other than that, there are no such expenses.

<Questioner 4>
Q: The first question is about photo IPS. I think there has been more momentum than ever before to introduce
photo alignment materials for medium‐sized panels in China. About the outlook for the photo IPS ratio, is it
likely that the adoption ratio will increase linearly, or is it likely that the photo IPS ratio will increasesignificantly in FY2022, given the recent conversion of customers’ equipment? Could you please explain thetime frame as well?
A: As for the penetration ratio of photo IPS, future expansion is expected to be linear in terms of annual
growth.

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Q: I understand. Thank you. The second point is about the capacity expansion of Agrochemicals at the Onoda
Plant, which was reported in some industry magazines. Could you please explain the background to thecapacity expansion?
A: One of the objectives of the expansion of Onoda plant is that the current capacity of the plant has reachedthe upper end for manufacturing existing products.
One more thing is to reinforce the plants for the new herbicides, especially the two herbicides that will be
released in the future.
In order to respond to the increasing demand, we are currently working not only on Onoda, but also on ourplant in India, which is establishing now.

<Questioner 5>
Q: The first is about Fluralaner. Based on your explanation earlier, on an annual basis, does Fluralaner exceed
the outlook?
A: That’s right.
Q: So, you said earlier that you have not changed your outlook that the bottom will be reached in FY2022, but
is it okay to think that the upward portion is due to the fact that inventories are cleared more than in theoriginal scenario?
A: Yes, that’s right. The inventory situation has improved from the original scenario.
Q: I understand. Also, regarding Agrochemicals, aside from Fluralaner, GRACIA is probably the most difficult
one to forecast for the next fiscal year. Looking at GRACIA over the past couple of years, it’s been fluctuating
significantly and predictions haven’t come true at all. Do you think you will be able to make a correct
assumption from your accumulated experiences?
A: It is true that the outlook of GRACIA is not correct. However, as I mentioned earlier, the inventory clearance
is progressing more than we expected, so we are now at the starting line.
As for GRACIA, insecticides, the amount of pesticides used, especially depending on the climate and theoccurrence of insect pests, can vary by as much as double or even 1/2 the amount we predict. Now that theinventory is relatively cleared, which is the start line, we would be able to show the results in line with ouroutlook if it is a normal occurrence. However, with less occurrence, we will certainly not meet the outlook. If
there are a lot of pests, we will considerably exceed the outlook.
Q: One last thing. Custom Chemicals has a very good figure during this current fiscal year, but will it be able
to keep up this pace next fiscal year and beyond?
A: As for Custom Chemicals, I believe that the demand environment has not changed significantly, as I expect
the results to be about the same next fiscal year as well.
Q: When you say the same, you mean the absolute value is the same. Not the growth rate.
A: That’s right. We expect the growth rate as well to flat around the same level in the next fiscal year.
[End]

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