Consolidated Financial Results for the Six Months Ended September 30, 2020
(JPGAAP)
November 12, 2020
Stock Exchange: Tokyo
Name of listed company: Nissan Chemical Corporation
URL: http://www.nissanchem.co.jp/
Code number: 4021
Representative: KINOSHITA Kojiro, President
Inquiry to: DAIMON Hideki, Executive Officer and Director of Finance and Accounting Department Tel. +81 3 4463 8404
Scheduled submission date of quarterly report: November 13, 2020䚷䚷䚷䚷䚷 Scheduled dividend payment date: December 7, 2020
Supplemental information: Yes
Financial results meeting : Yes (For institutional investors and analysts)(Amounts rounded down to the nearest million yen)

1. Consolidated Financial Results for the Six Months Ended September 30, 2020 (From April 1, 2020 to September 30, 2020)(1) Consolidated Operating Results(% indicates the rate of increase/decrease against the same period of the previous year)

OperatingincomeNet sales

Six months ended September 30, 2020
Six months ended September 30, 2019
(Note) Comprehensive income:Ordinary
incomeNet income attributableto owners of parent

Million yen%

Million yen%

Million yen%

Million yen%

94,494(2.0)

17,980(0.3)

18,173(2.5)

13,896(4.3)

96,466(1.6)

18,026(7.1)

18,646(9.5)

14,523(5.8)

Six months ended September 30, 2020

: 16,436 million yen ,48.7%

Six months ended September 30, 2019

: 11,051 million yen ,(33.7%)

Basic earnings
per share

Diluted net income
per share

Yen

Yen

Six months ended September 30, 2020

95.96

㸫

Six months ended September 30, 2019

98.75

㸫

(2) Consolidated Financial Position
Total assets

Net assets

Equity ratio

Million yen

Million yen%

As of September 30, 2020

229,234

187,974

81.3

As of March 31, 2020

249,522

185,528

73.7(Reference) Shareholders' equity:

As of September 30, 2020

: 186,337 million yen

As of March 31, 2020

: 183,917 million yen

2. Cash Dividends
Cash dividends per shareFirst
quarter

SecondquarterYen

Thirdquarter

Yen

Year ended March 31, 2020

䠉

42.00

Year ending March 31, 2021

䠉

46.00

Year ending March 31, 2021
(Outlook)Year-end

Yen

Annual

Yen

Yen

㸫

48.00

90.00

㸫

52.00

98.00

(Note) Revision of the latest released dividend outlook: Yes
Please refer to " Revision of Financial Results Outlook, Interim Dividend Payment and Dividend Outlook" for details.

3. Outlook of Consolidated Financial Results for the Fiscal Year Ending March 31, 2021 (From April 1, 2020 to March 31, 2021)(% indicates the rate of increase/decrease against the same period of the previous year)
OperatingincomeNet salesYear ending March 31, 2021

Ordinary
incomeNet income attributableto owners of parent

Basic earnings
per share

Million yen%

Million yen%

Million yen%

Million yen%

Yen

209,500

1.3

40,300

4.3

41,1002.7

31,4002.0217.56(Note) Revision of the latest released outlook of financial results: Yes
Please refer to " Revision of Financial Results Outlook, Interim Dividend Payment and Dividend Outlook" for details.

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 September 30, 2020

: 145,000,000 shares

As of March 31, 2020

: 146,000,000 shares

2. Number of treasury shares
As of September 30, 2020

: 856,260 shares

As of March 31, 2020

: 522,578 shares

3. Average number of shares outstanding
As of September 30, 2020

: 144,827,351 shares

As of September 30, 2019

: 147,069,733 shares(Note) The Company has introduced “Board Benefit Trust (BBT)” from the second quarter of the previous fiscal year.
The shares held by the Trust are included in the number of treasury shares at the end of the period, and they are includedin the number of treasury shares deducted in calculating the average number of shares outstanding over the period.
The number of shares held by the Trust (included in treasury shares) at the end of the period was 165,800 shares.
In addition, the average number of shares held by the Trust during the period was 165,983 shares.
This is not included in the average number of shares outstanding.
* Presentation regarding implementation status of quarterly review procedures
The financial release is not subject to quarterly review.
* Explanations regarding appropriate use of business outlook and other special notes
The business outlook contained in this report is based on information available at the time of disclosure.
Actual operating results may differ materially from the outlook due to various factors.
For supplemental information, please refer to our website.
The transcript of financial results audio webcast will be released on our website as well.

Table of Contents for Attached Materials

1. Qualitative Information on Quarterly Results(1) Business Performance(2) Financial Position........................................................................................................ 2.............................................................................................................................. 2..................................................................................................................................... 3(3) Outlook of Consolidated Financial Results and Other Forward-looking Information .................................................... 4(4) Basic Policy on Distribution of Earnings
2. Consolidated Financial Statements......................................................................................................... 4................................................................................................................... 5(1) Consolidated Balance Sheets ...................................................................................................................... 5(2) Consolidated Statements of Income / Consolidated Statements of Comprehensive Income ......................................... 7(3) Consolidated Statements of Cash Flows........................................................................................................ 9(4) Notes to Consolidated Financial Statements..................................................................................................10(Notes on Assumption of Going Concern).................................................................................................10(Notes on Significant Changes in Shareholders' Equity)(Segment Information)................................................................................10.........................................................................................................................101

1Qualitative Information on Quarterly Results(1) Business Performance
During the second quarter of the current fiscal year (April 1, 2020 to September 30, 2020), the domestic economy was severely affected by
the spread of the COVID-19. As a result of a sharp drop in domestic demand and a decrease in exports due to the deterioration of the world
economy, a significant negative growth was recorded, surpassing that immediately after the global financial crisis. Under these circumstances,sales of Basic Chemicals decreased in the Chemicals Segment. In the Performance Materials Segment, Display Materials andSemiconductor Materials performed well. In the Agricultural Chemicals Segment, shipments declined. In the Pharmaceuticals Segment, sales
in the drug discovery business decreased, despite an increase in sales in “Custom Chemicals” (custom manufacturing and process
researching services for pharmaceutical companies).
As a result, business performance during the first half of the current fiscal year was as follows. Sales and each income were below the same
period of previous fiscal year, however operating income, ordinary income and net income attributable to owners of parent exceeded theoutlook announced in May.
࣭ Consolidated Financial Results for the Second Quarter(Million yen, amounts rounded down to the nearest million yen)

2Q FY2019

2Q FY2020

Year-on-Year

2Q FY2020

Change from

(Actual)(Actual)Change(Outlook)

OutlookNet sales

96,466

94,494(1,971)

96,600(2,106)

Operating income

18,026

17,980(46)

16,100+1,880Ordinary income

18,646

18,173(473)

16,700+1,473

14,523

13,896(626)

12,500+1,396

Net income attributableto owners of parent

Explanations by segments are as below.
The Chemicals Segment
In the Basic Chemicals, although sales of high purity sulfuric acid (agent used for cleaning semiconductor) increased, shipmentsof melamine (adhesives agent for particle board) decreased. In the Fine Chemicals, sales of "TEPIC" (powder coating agent for
paint, sealants, etc.) and environmental chemicals (sterilizing and disinfecting agents for pools and septic tanks, etc.) decreased.
As a result, sales of this segment were 14,711 million yen (a decrease of 2,131 million yen) and operating loss was 139 million yen(a decrease in profit of 447 million yen). Compared to the outlook (Note), net sales were below 2.3 billion yen and operating income
was below 1.3 billion yen.
(Note)The outlook is described on page 19 and 20 of the FY2019 Presentation Materials (announced on May 15, 2020).
The Performance Materials Segment
In the Display Materials, sales of "SUNEVER" (LCD alignment coating) for tablets and notebook PCs performed well. In the Semiconductor
Materials, sales of anti-reflection coating materials for semiconductors (ARC®*) and multilayer materials (OptiStack®*) increased, reflecting
the strong operation of customers. In the Inorganic materials, sales of oil and gas materials (shale oil and gas mining efficiency-improving
materials) decreased, while sales of "SNOWTEX" for polishes for electronic materials were firm.
As a result, sales of this segment were 34,593 million yen (an increase of 3,205 million yen) and operating income was 10,733 million yen(an increase of 2,384 million yen). Compared to the outlook (Note), net sales were above 0.5 billion yen and operating income was above 2.0
billion yen.
(Note)The outlook is described on page 19 and 20 of the FY2019 Presentation Materials (announced on May 15, 2020).
* ARC® and OptiStack® are registered trademarks of Brewer Science, Inc.

2

The Agricultural Chemicals Segment
Sales of Fluralaner (active ingredients for veterinary pharmaceuticals) decreased due to the impact of inventory adjustment bycustomers. In the domestic agrochemicals segment, sales of "ALTAIR" (paddy rice herbicide) were firm, but shipments of "GRACIA"(insecticide) declined due to moderate insect pests outbreaks. In the overseas agrochemicals segment, sales of "QUINTEC"(fungicide), acquired in the third quarter of last year, and "GRACIA" were robust.
As a result, sales of this segment were 25,746 million yen (a decrease of 2,125 million yen) and operating income was 7,794 million
yen (a decrease of 1,588 million yen). Compared to the outlook (Note), net sales were below 0.3 billion yen and operating income
was above 1.1 billion yen.
(Note)The outlook is described on page 19 and 20 of the FY2019 Presentation Materials (announced on May 15, 2020).
The Pharmaceuticals Segment
Sales of "LIVALO" (anti-cholesterol drug) declined due to increased sales of generic drugs. In "Custom Chemicals", sales of active
pharmaceutical ingredients (generics) increased.
As a result, sales of this segment were 3,025 million yen (a decrease of 406 million yen) and operating income was 26 million yen(a decrease of 501 million yen). Compared to the outlook (Note), net sales were above 0.2 billion yen and operating income was
below 0.1 billion yen.
(Note)The outlook is described on page 19 and 20 of the FY2019 Presentation Materials (announced on May 15, 2020).
Trading
Sales of this segment were 33,736 million yen (an increase of 420 million yen), and operating income was 1,242 million yen (anincrease of 224 million yen). Compared to the outlook (Note), net sales were above 0.7 billion yen and operating income was above
0.2 billion yen.
(Note)The outlook is described on page 19 and 20 of the FY2019 Presentation Materials (announced on May 15, 2020).
OthersSales of this segment were 9,412 million yen (a decrease of 418 million yen) and operating income was 45 million yen (a decrease of77
million yen).
(Note) From FY2020, we have changed the method of totaling operating income by segments. Year-on-year comparisons arecalculated using figures compiled using the same method. Under the new method, consolidation adjustments (such as unrealized
gains on inventories and non-current assets) previously allocated to individual segments are collectively processed with theadjustments for the entire company. The impact of this change is minor.
(2) Financial Position(Position of Assets, Liabilities and Net Assets)
Total assets as of September 30, 2020 was 229,234 million yen (a decrease of 20,287 million yen from March 31, 2020). It is mainly due tothe decrease of notes and accounts receivable - trade.
Also, total liabilities as of September 30, 2020 was 41,260 million yen (a decrease of 22,733 million yen). It is mainly due to the decrease ofloans payable.
Net assets as of September 30, 2020 was 187,974 million yen (an increase of 2,446 million yen).
As a result of these factors, equity ratio was 81.3% (an increase of 7.6% from March 31, 2020).
(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 the six months ended September 30, 2020 was 33,629 million yen (31,936 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 six months ended September 30, 2020 was
2,585 million yen (2,423 million yen).

3

Due to the decrease in loans payable, payment for dividends and share repurchase, net cash used in financing activities for the six months
ended September 30, 2020 was 32,770 million yen (33,449 million yen).
As a result of these factors, cash and cash equivalents at the end of this period was 28,897 million yen, reflecting exchange of 14 million
yen. It decreased by 1,741 million yen from March 31, 2020 (31,870 million yen).
(3) Outlook of Consolidated Financial Results and Other Forward-looking Information
Outlook for the year ending March 31, 2021 was revised as follows based on the cumulative second quarter and demand outlook.
For the exchange rate of the third quarter and beyond, it is assumed that 1 U.S. dollar is 105 yen.
Revision of consolidated financial results’ outlook for the year ending March 31, 2021 (April 1, 2020 to March 31, 2021)(Billion yen, amounts rounded to the nearest billion yen)Previous

Revisedoutlook(A)outlook(B)Increase or(Reference)

Rate of change

decrease

(%)

(B-A)

Results for theprevious fiscal year

Net sales

214.5

209.5

(5.0)

(2.3)%

206.8

Operating income

39.3

40.3

+1.0

+2.5%

 38.6



40.4

41.1

+0.7

+1.7%

40.0



30.8

31.4

+0.6

+1.9%

 30.8214.23 yen

217.56 yen㸫㸫

210.09 yen

Ordinary income
Net income attributableto owners of parent
Basicearnings

per

share

Revision of consolidated net sales and operating income outlook for the year ending March 31, 2021
(Billion yen, amounts rounded to the nearest billion yen)
 Net sales
Previous Operating income
Revised

Previous

RevisedChemicals

35.6

31.7

2.7

1.2

Performance Materials

70.1

69.8

18.1

20.6

Agricultural Chemicals

65.5

64.6

18.4

18.7

Pharmaceuticals

6.4

6.8

0.4

0.6

Trading

68.2

69.1

2.0

2.1

Others

25.0

23.4

0.7

0.6

Adjustment(56.3)(55.9)

(3.0)

(3.5)

Total

214.5

209.5

39.3

40.3

(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 themedium and long terms.
In medium-term business plan “Vista2021” Stage II launched from April 2019, the company aims to realize dividend payout ratio to be 45%
and total payout ratio to be 75% after FY2019.

4

2. Consolidated Financial Statements(1) Consolidated Balance Sheets(Million yen)
As ofMarch 31, 2020

As of
September 30, 2020

AssetsCurrent assets
Cash and deposits

30,63928,897

Notes and accounts receivable - trade72,50949,073Merchandise and finished goods

33,13135,999Work in process

153

685

Raw materials and supplies

10,59012,521

Other

7,199

5,002

(26)

(23)

154,196

132,156

Buildings and structures, net

24,85024,593

Other, net

26,731

26,589Total property, plant and equipment

51,581

51,183

566

531

Other

6,812

6,625

Total intangible assets

7,379

7,156

Investment securities

30,87333,941Other

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment

Intangible assets
SoftwareInvestments and other assets
5,575

4,882

Allowance for doubtful accounts

(84)

(84)

Total investments and other assets

36,36438,73895,325

97,078249,522229,234

Total non-current assets
Total assets

5

(Million yen)
As ofMarch 31, 2020

As of
September 30, 2020

Liabilities
Current liabilities
Notes and accounts payable - trade16,876

13,987

Short-term loans payable

23,538

4,889

Income taxes payable

6,167

5,145

Provision for bonuses

2,151

2,193

26

9

Other

11,254

11,328

Total current liabilities

60,01537,555

1,076

866

Provision for business structure improvement

284

184

Provision for loss on business of subsidiaries and affiliates
Provision for share-based remuneration for directors(and other officers)
Net defined benefit liability

309

-

46

47

Provision for directors' bonuses

Non-current liabilities
Long-term loans payable

208

224

Other

2,053

2,381

Total non-current liabilities

3,978

3,704

63,993

41,260Capital stock

18,942

18,942

Capital surplus

13,613

13,613Retained earnings

146,997

148,773

Treasury shares(2,470)(4,339)Total shareholders' equity

177,082

176,990

Valuation difference on available-for-sale securities

7,782

10,186

Foreign currency translation adjustment

(896)

(792)

Remeasurements of defined benefit plans

(51)

(47)

6,834

9,347

Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income

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

6

1,610

1,637

185,528

187,974

249,522229,234

(2) Consolidated Statements of Income / Consolidated Statements of Comprehensive Income- Consolidated Statements of Income(Million yen)
Six Months Ended
September 30, 2019

Six Months Ended
September 30, 2020

Net sales

96,466

94,494

Cost of sales

56,26754,764Gross profit

40,19839,730

Selling, general and administrative expenses

22,171

21,749Operating income

18,026

17,980127Non-operating income
Interest income
Dividend income

359

336

Equity in earnings of affiliates

395

263

Other

595

343

1,362

951

Interest expenses

70

45

Loss on disposal of non-current assets

200

288

Plant stop losses

218

50

Foreign exchange losses

222

263

Other

29

110

Total non- operating expenses

742

758

18,646

18,173Gain on sales of investment securities

1,694

1,089

Total extraordinary income

1,694

1,089

Licensing arrangement fee

834-

Total extraordinary losses

834-

Income before income taxes and non-controlling interests

19,506

19,262

Income taxes - current

5,034

5,527

Total non-operating income
Non-operating expenses

Ordinary income
Extraordinary income

Extraordinary losses

Income taxes - deferred

(100)

(173)

Total income taxes

4,934

5,354

Net income

14,572

13,90849

11

14,523

13,896

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

7

- Consolidated Statements of Comprehensive Income(Million yen)
Six Months Ended
September 30, 2019

Six Months Ended
September 30, 2020

14,572

13,908(2,567)2,404

Foreign currency translation adjustment

(935)

119

Remeasurements of defined benefit plans, net of tax

(17)

3

Share of other comprehensive income of entities accounted forusing equity method(0)0

Net income
Other comprehensive income
Valuation difference on available-for-sale securities

Total other comprehensive income
Comprehensive income(3,521)

2,527

11,051

16,436

11,085

16,409(34)

26(Comprehensive income attributable to)
Owners of parent
Non-controlling interests8(3) Consolidated Statements of Cash Flows(Million yen)
Six Months Ended
September 30, 2019

Six Months Ended
September 30, 2020

Income before income taxes and non-controlling interests

19,506

19,262

Depreciation and amortization

4,698

4,763

0

33

Cash flows from operating activities

Amortization of goodwill
Interest and dividend income
Loss (gain) on sales of investment securities
Interest expenses
Loss (gain) on disposal of non-current assets

(372)

(343)

(1,694)(1,089)

70

45

200

288

Decrease (increase) in notes and accounts receivable - trade

17,051

23,482

Decrease (increase) in inventories(2,980)(5,288)

Increase (decrease) in notes and accounts payable - trade(1,824)(2,929)

Other

689

1,116

35,34639,340Interest and dividend income received

945

904

Interest expenses paid

(70)

(45)

Income taxes paid

(4,285)(6,570)Net cash provided by (used in) operating activities

31,936

33,629

(6)

(106)

2,909

1,625

-

(302)

(4,175)(4,025)

(176)

(252)

Subtotal

Cash flows from investing activities
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries
Purchase of property, plant and equipment
Payments for retirement of property, plant and equipment
Purchase of intangible assets

(128)

(249)

Net decrease (increase) in short-term loans receivable

(618)

742

Purchase of long-term prepaid expenses

(420)

(15)

Other

193

(0)

(2,423)(2,585)(19,400)(18,458)

(930)

(320)

(6,206)(6,990)(111)-

Share repurchase(6,799)(7,000)Net cash provided by (used in) financing activities(33,449)(32,770)

Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Repayments of long-term loans payable
Cash dividends paid
Dividends paid to non-controlling interests

Effect of exchange rate change on cash and cash equivalents

(376)

(14)

Net increase (decrease) in cash and cash equivalents(4,312)(1,741)

Cash and cash equivalents at beginning of period

36,18330,639Cash and cash equivalents at end of period

31,87028,8979

(4) Notes to Consolidated Financial Statements(Notes on Assumption of Going Concern)
Not applicable.
(Notes on Significant Changes in Shareholders' Equity)
The Company made a stock payment of 100 shares to the eligible party on April 24, 2020 based on the trust agreement of the Board
Benefit Trust (BBT) resolved by the Board of Director's meeting on July 30, 2019. In addition, the Company made a stock payment of 300
shares to the eligible party on July 22, 2020. As a result, treasury shares decreased by 1 million yen during the second quarter of current
consolidated fiscal year. Also, the Company canceled 1,000,000 treasury shares on August 31, 2020 based on the resolution ofBoard of Directors' meeting held on August 18, 2020. As a result, retained earnings and treasury shares decreased by 5,130 million yen during
the second quarter of current consolidated fiscal year.
Also, the Company repurchased 1,333,900 treasury shares based on the resolution of Board of Directors' meeting held on May 15, 2020.
As a result, treasury shares increased by 6,999 million yen during the second quarter of current consolidated fiscal year.
(Segment Information)
1. Information Regarding Sales, Income (Loss) of Reportable Segments
1) For the Six Months Ended September 30, 2019 (From April 1, 2019 to September 30, 2019)
Chemicals

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals

Trading(Million yen)
Others

Total

Adjustment(1)

Consolidated
Total

Sales
Sales to outside customers

12,184

27,77526,2853,420

22,8093,984

96,4596

Intersegment Sales

4,658

3,612

1,586

11

10,507

5,847

26,222(26,222)㻙

16,842

31,387

27,871

3,431

33,316

9,831

122,682(26,216)

96,466

308

8,349

9,382

527

1,017

123

19,709(1,682)

18,026

Total Sales
Segment Income or Loss
(Operating Income or Loss)

96,466

Notes: (1) The (1,682) million yen adjustment in segment income includes (187) million yen in intersegment eliminations, 6 million yen sales
not attributable to any reporting segment, and (1,501) 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.
2) For the Six Months Ended September 30, 2020 (From April 1, 2020 to September 30, 2020)
Chemicals

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals

Trading(Million yen)
Others

Total

Adjustment(1)

Consolidated
Total

Sales
Sales to outside customers

10,15730,34023,532

3,002

23,856

3,601

94,492

1

Intersegment Sales

4,553

4,252

2,213

22

9,879

5,810

26,733(26,733)

㻙

14,711

34,59325,746

3,025

33,736

9,412

121,226(26,731)

94,494(139)

10,733

7,794

26

1,242

45

19,702(1,722)

17,980Total Sales
Segment Income or Loss
(Operating Income or Loss)

94,494

Notes: (1) The (1,722) million yen adjustment in segment income includes (73) million yen in intersegment eliminations, 1 million yen sales
not attributable to any reporting segment, and (1,650) 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.
2. Matters related to changes in reportable segment, etc.
(Change to calculation method for profit (loss) by reportable segment)
In order to more appropriately evaluate and manage the performance of each reportable segment, the Company reviewed the method of adjusting
intersegment transactions and has changed the method of calculation for profit or loss of each reportable segment. Segment information for thesecond quarter of the previous fiscal year is based on the revised method.

10