3Q FY 2019 Financial Results Conference Call
Q&A Session Summary
Date: Friday, February 7, 2020: 4:15 p.m. to 5:00 p.m.
Presenter: MIYAZAKI Junichi, Director, Senior Executive Vice President & CFO,
Head of the Finance & Accounting Department
Presentation materials: https://www.nissanchem.co.jp/eng/ir_info/library/pdf/AM/am2019_12.pdf■ Overall
Q1: Would you please tell us about the upward/downward swing from the second half
outlook in the operating profit by segments?
A1: While the prospects for operating profit in the 4Q (Jan-Mar) remain uncertain, since it
appears likely that the chemicals segment will remain down in the 4Q as it was in the 3Q(Oct-Dec), there is a high possibility that second-half results will be lower than planned.
The performance materials segment is up in both the 3Q and the 4Q, so we expect it toexceed plans in the second half as well. We expect operating profit in the agrochemicals
and pharmaceuticals segments to be largely in line with plans for the second half.
■ Chemicals Segment
Q2: There was little sign of recovery in the 3Q in areas such as melamine marketconditions and TEPIC shipments. Do you expect a recovery in the 4Q?
A2: Although at the time we announced the financial results for the first half in November, wedid expect something of a recovery in the second half, but the 3Q results were very
unsatisfactory. In light of current conditions, we believe that a recovery from the 3Q to the4Q is unlikely.
■ Performance Materials Segment
Q3: Has the new coronavirus (COVID-19) had any impact?
A3: When we checked on customers' operating conditions in the display and semiconductors
markets, all were operating normally as of February 5, so that at this time there has beenno impact.

Q4: What is the outlook for the operating conditions of semiconductor makers in the4Q? While it appears that they have recovered more quickly than had been expected
since the 3Q, do you think the recovery will slow in the 4Q? Or, do you expect therecovery to accelerate further?
A4: We expect operating conditions to continue to recover in the 4Q as they did in the 3Q.

■ Agrochemicals Segment
Q5: You project a major increase in Fluralaner in the 4Q. How confident are you ofthis?
A5: We are quite confident about the 4Q.
Q6: Would it be correct to say that inventory adjustments in the end market for
Fluralaner are almost complete? How do you see the next period and beyond?
A6: We have not yet obtained clear information on inventory adjustments, so we areuncertain about the next period.

Q7: Zoetis plans to bring to market a triple vaccine called Simparica Trio(internal/external antiparasitic medication). How do you view this as a competitorfor Bravecto?
A7: We estimated the size of the market for internal/external antiparasitic medications suchas Simparica Trio to be limited and not that large compared to the market for external
antiparasitic medications, which is the main market for Bravecto. It appears that there is
not much demand for internal/external antiparasitic medications in the United States, whichis the largest market for veterinary medicines. Outbreaks of filaria are concentrated in thesoutheast U.S., and demand appears low in the west and other regions of the country.
In addition, since as a maker of veterinary medicines we need to sell combination
medications at more of a discount compared to single medications, we do not consider
them very attractive. We believe that Zoetis may be introducing this combination
medication to counter products such as Bravecto that were introduced earlier, since it has
been late to bring single medications to market. While MSD*, which sells Bravecto, ismoving forward on development of combination medications from a product-lineup
perspective, we believe that it will continue to handle single medications as its mainproducts.

Q8: Regarding the acquisition of Quinoxyfen, do you plan to sell it yourself in the U.S.?
A8: We have appointed an agent for the U.S. market. It is a second-tier agrochemicals
company that already sells our agrochemicals in the U.S.

Q9: Are you aiming to acquire any businesses in the future from agrochemicals
makers around the world like the recent acquisition of Quinoxyfen?
A9: We would consider opportunities that would fit our portfolio.
*MSD: MSD Animal Health, the global animal health business unit of Merck (US)