1Q FY 2019 Financial Results Conference Call
Q&A Session Summary
Date: Friday, August 2, 2019: 4:30 p.m. to 5:15 p.m.
Presenter: Junichi Miyazaki, Director, Senior Executive Vice President & CFO,
Head of Finance & Accounting Department
Presentation materials: https://www.nissanchem.co.jp/eng/ir_info/library/pdf/AM/am2019_06.pdf■ Overall
Q1: There seemed to be a lot of front-loaded shipments in the 1Q (Apr-Jun) in theAgrochemicals and Pharmaceuticals Segments. Please explain about theupward/downward swings in light of the 1Q result in terms of the achievement
accuracy of the first-half outlook.
A1: On the whole, it is fairly difficult to read at this moment in time whether or not we willreach the first-half expectations. The situation with Chemicals has been harsher than
expected, and it seems it will be difficult to achieve the first-half outlook. Performance
Materials also might be below target. We are expecting good shipments of Display
Materials in the 2Q (Jul-Sep) exceeding our targets, as same as in the 1Q. The situation
with Semiconductor Materials has been harsh, and unexpectedly so too is Oilfield Materials
in Inorganic Materials. The restrained budget of the US customers inevitably leads to lessaccess to our products. Agrochemicals is considered to be approximately as expected.
Because the outlook for Fluralaner has not changed from the initial outlook, and there are
upward swings with GRACIA in actual demand and front-loaded shipment, we currently
have no clue on how much will remain in the first half. Because there were a lot of frontloaded shipments for Pharmaceuticals, we consider that the upward swing in profits will beadjusted.

Q2: Fixed costs seem to be quite below the outlook. How much downward swing areyou expecting in this full year?
A2: Because recording of some fixed costs has been postponed while some fixed costs(especially R&D costs) have been saved due to non-free delivery of samples, we haven’t
reviewed the annual expectations at this moment. However, our company usually tends toend with lower fixed costs than the outlook.
■ Performance Materials Segment
Q3: Looking at the sales of SUNEVER by mode, it seems that the VA (VerticalAlignment) mode especially is growing strongly. Which areas are showing growth?
A3: I think we have been increasing the share of VA as planned mainly in China. The upward
swing of photo-alignment IPS also is mainly attributed to China, in terms of area.

Q4: Is the YOY sales increase of SUNEVER attributed to the growth of mid- and smallsized products?
A4: YOY comparison showed a slightly negative growth in products for smartphones.
However, those for notebook computers and monitors are growing.
■ Agrochemicals Segment
Q5: Please tell us in detail about the frontloaded shipment of Fluralaner and GRACIA.
A5: As for Fluralaner, it is considered that the current upward swing will be adjusted forsomewhere in this year, so we haven’t changed the annual outlook. As for GRACIA, there
are the two factors of front-loaded shipment and an upward swing, and we consider thatthe upward swing in the 1Q is mainly attributed to front-loaded shipment from the 2Q, but
the sales of GRACIA tend to go above outlook even on a full-year basis. Because GRACIA
requires a long time for manufacturing, we currently can’t make enough of them comparedto the sales.

Q6: How is the inventory adjustment of BRAVECTO going?
A6: I think it’s still under way. We still don’t have a grasp of the details of MSD*’s
manufacturing and inventory adjustment.

Q7: Compared to the second-half outlook of Nissan Chemical’s Fluralaner, the recent
sales of MSD hasn’t grown so much on a YOY basis. Will you possibly make adownward revision with the sales of Fluralaner?
A7: Our shipment volume and MSD’s sales volume do not necessarily correlate with eachother. If you look at them especially over a short span like a quarter or half of the year,
there tends to be a large gap between the timings of their manufacturing/sales and ourrecording of the sales.

Q8: Did the lawsuit in the US impact the downward swing of ROUNDUP?
A8: There has been no impact from the lawsuit with regard to the Japanese market, where
we sell ROUNDUP. The cause of the downward swing is AL, specifically, product mix within
the AL series. Because we focused on expanding the sales of AL (1.2L), which is the leastexpensive in the series, aiming to increase the numbers of customers of AL, the salesamount as a result was below the outlook.
*MSD: MSD Animal Health, the global animal health business unit of Merck (US)END