Forecasts for the fiscal year ending March 31, 2021, and the newmedium-term business plan are undisclosed due to inability toreasonably estimate business impact from the global COVID-19
pandemic. Forecasts will be promptly released as soon as conditions
allow for reasonable estimates.

©Nippon Chemical Industrial Co., Ltd.

For the year ended March 31, 2020

Summary ofFinancial Results

1 Summary of Consolidated Financial Results
for the Year Ended March 31, 2020
2 Review of the Previous Medium-TermBusiness Plan
(year ended March 31,2018,
to the year ended March 31, 2020)

May 15, 2020Nippon Chemical Industrial Co., Ltd.
© Nippon Chemical Industrial Co., Ltd.

4092

1© Nippon Chemical Industrial Co., Ltd.

Summary of Consolidated
Financial Results for the Year
Ended March 31, 2020

Consolidated financial results for the year
ended March 31, 2020
(Millions of yen)
Year ended
Year ended
March 31, 2019 March 31, 2020

ChangeChange rate

Net sales

36,15736,24385

0.2%

Operating profit

3,084

2,481(603)(19.6%)

Ordinary profit

3,057

2,545(512)(16.7%)

Profit2,154

1,857(296)(13.8%)

ROE

6.2%

5.2%

©Nippon Chemical Industrial Co., Ltd.

4Specialty
Chemicals

Leasing
Business

Airconditioning
BusinessOthers
Total

Net salesYear ended
March 31, Change
2020

15,584

15,509(74)Operatingprofit661

492(169)

Net sales

14,84915,470620

Operatingprofit1,423

1,280(143)

Net sales

893

912

18

Operatingprofit548

532(16)

Net sales

3,869

3,418(451)

Operatingprofit350

139(211)Net sales

959

931

(27)

Operatingprofit8162(19)

Net sales

36,15736,24385

Operatingprofit3,084

2,481(603)©Nippon Chemical Industrial Co., Ltd.

Specialty Chemicals

Inorganic
ChemicalsYear ended
March 31,2019

Others(Millions of yen)

Inorganic Chemicals

Earnings for the year ended March 31, 2020, by Business
Chromium Compounds Decline for coat
Silicates and Silica

Growth for environmental-related

Inorganic Phosphorus
Compounds

Weakness in optical glass andstrongness in LCDs

Other Inorganic
Chemicals

Weakness in lithium products andsolidness in cuprous oxide

Phosphine Derivatives

Large decline for overseas

Agrochemicals

Decline for major customers

Battery Materials

Solidness for major customers

Electronic CeramicMaterials

Large growth forautomobile/communication

Circuit Materials

Solidness for major customers

Other Specialty
Chemicals

Solidness in organic electronicmaterials

Leasing Business

Extension of AEON Town Koriyama

Air-conditioning
Business

Weak demand for new designs,
construction and maintenanceBook Store Operation

Flat over the same period theprevious year
Weakness in environmental
measurement

Others5

Consolidated balance sheet - Assets(Millions of yen)

As ofMarch 31, 2019

As ofMarch 31, 2020

ChangeCash and deposits

30,794
9,051

29,696
9,392(1,098)341

Notes and accounts receivable - trade

10,861

10,820(41)

Inventories

10,364518
34,70327,014
319
6,597
773
65,4978,840
644
36,25429,279
644
5,735
596
65,950(1,524)
126
1,551
2,264
325
(862)
(177)
452

[Assets]
Current assets

Other
Non-current assets
Property, plant and equipment
Intangible assets
Investment securities
Other
Total assets©Nippon Chemical Industrial Co., Ltd.

6

Consolidated balance sheet - Liabilities & Net assets(Millions of yen)

[Liabilities & Net assets]
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Other
Non-current liabilities
Long-term borrowings
Retirement benefit liability
Deferred tax liabilitiesOther
Total liabilities

As ofMarch 31, 2019

As ofMarch 31, 2020

Change18,925
4,617
9,143
5,165
11,073
5,422
1,299
2,118
2,233
29,99915,930
3,194
7,825
4,911
14,251
8,161
1,999
1,706
2,385
30,181(2,995)(1,423)(1,317)
(254)
3,178
2,739
699
(412)
152
182

32,5142,983
35,49765,49733,7991,968
35,76865,9501,285(1,015)270
452[Net assets]
Shareholders' equity
Accumulated other comprehensive income
Total net assets
Total liabilities and net assets©Nippon Chemical Industrial Co., Ltd.

7Consolidated statements of income(Millions of yen)

Net sales
Cost of sales
Selling, general and administrative expenses
Operating profit
Non-operating income
Non-operating expenses
Ordinary profit
Extraordinary income
Extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferredProfit©Nippon Chemical Industrial Co., Ltd.

Year ended
March 31, 2019Year ended
March 31, 2020

Change36,15728,073
4,999
3,084
326
354
3,057
55
156
2,956
746
56
2,154

36,24328,457
5,304
2,481
293
229
2,545
194
228
2,511
624
29
1,857

85384
305
(603)
(33)
(125)
(512)
139
72(445)
(122)
(27)
(296)

8

Consolidated statements of cash flows
I Cash flows from operating activities
Profit before income taxes
Depereciation
Changes in inventories
Other
II Cash flows from investing activities
Capital expenditure
Other
III Cash flows from financing activities
Changes in loans payable
Cash dividends paid
Other
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents resulting from inclusionof subsidiaries in consolidation
Cash and cash equivalents at end of period©Nippon Chemical Industrial Co., Ltd.

(Millions of yen)

Year ended
March 31, 2019Year ended
March 31, 2020

2,632
2,956
2,155
(2,148)(331)(3,966)(3,965)(1)
1,445
2,068(614)
(9)
2
113
8,927

4,776
2,511
2,657
1,523
(1,915)(5,503)(5,794)
291
842
1,423
(570)
(11)
(5)
109
9,041

-

165

9,041

9,315

9

２

Review of the Previous
Medium-Term Business Plan
(year ended March 31, 2018,
to the year ended March 31, 2020)© Nippon Chemical Industrial Co., Ltd.

Medium-term Business Plan policy

Toward earning sustained and steady profits(i) Concentrated investment(ii) Aggressive development(iii) Reinforcement ofin priority areasof overseas strategies

business foundation

Expand Specialty Chemicals businessSell to non-Japan Asian markets
aggressively

Regain business in existing domesticmarkets

Arrange for the construction of anew plant incorporating nextgeneration products

Reinforce the liaison between ourinternational business sites

Utilize asset holdings effectively

Push forward with mergers andacquisitions (M&As)

Verify the proposed establishment ofa South East Asian production baseand implement it

Promote developing humanresources

Growth strategy©Nippon Chemical Industrial Co., Ltd.

Structural reformand reinforcement11Review of the previous medium-term business plan
Groundwork for realization of sustained and steady profits
Measures

Concentrated
investment inpriority areas

Aggressive
developmentof overseas
strategies

Actual results・Investments in electronic materials and organic products
・Determination and ongoing implementation of construction of thenew production building for electronic materials
・Acquisition of Rockgate Corporation by the subsidiary Nippon Puretec
Co., Ltd., resulted in covering physical and chemical appliances including
cryogenic refrigerators for quantum computer・Examination of overseas production of some products mainly inSoutheast Asia
・Promotion of overseas operations of our products・Strengthening of cooperation between overseas bases with the aim ofexpanding trade between the bases

・Effective use of holding assets: Completed redevelopment of the site
Reinforcement for the former Nishi-yodogawa plant site
・Further customer development/share expansion of existing productsof business・Well-placed human resources and securing human resources throughfoundation
mid-career recruiting©Nippon Chemical Industrial Co., Ltd.

12

Review of the previous medium-term business plan
The plan was achieved in net sales and profits until the second year,
but it was unachieved for the third year.
Promotion of aggressive investment increased depreciation, which squeezed profits.
(Millions of yen)

OperatingprofitPlan: 2,500

Plan: 2,800

Plan: 2,900

Actual: 4,000

Actual: 3,000

Actual: 2,400

350

Net sales
Plan:

Actual:35,00036,700Plan:

36,000

Actual:Plan:

Actual:36,10037,50036,200300

2018/3©Nippon Chemical Industrial Co., Ltd.

2019/32020/313

Review of the previous medium-term business plan
Proactive promotion of capital expenditures resulted in an upward
tendency in depreciation
cDevelopments in capital expenditures and depreciation（Hundred millions of yen）

Capital expenditures80

60

Depreciation

2730

22

21
1920
20

40
10
20

035

2226

46

54

16/3

17/3

18/3

19/3

20/3

©Nippon Chemical Industrial Co., Ltd.

014

Review of the previous medium-term business plan
Operating profit reached 4,000 million yen in the year ended
March 31, 2018, and then it has shown a downward tendency.
Developments in net sales and operating profit for the last 10 years(Hundred millions of yen）

Net sales(Hundred millions of yen）

Operating profit

500

40400

20300

0
The previous MediumTerm Business Plan
(18/3～20/3)▲20200
10/3

11/3

12/3

13/3

©Nippon Chemical Industrial Co., Ltd.

14/3

15/3

16/3

17/3

18/3

19/3

20/3

15

Review of the previous medium-term business plan
Capital expenditures and net sales of new products
PlanCapital expenditures (Hundred millions of yen)

Capital expenditures

ActualConcentrated investment in electronicmaterials and organic products.
For electronic materials, we increased thecapacity of the existing Fukushima No.1
factory. Additionally, the construction of anew production building in Tokuyama
factory was started with an eye toward thefuture. We will obtain expanding demandand stabilize supply through the above. We
will also focus on the groundwork for longterm growth.

Net sales of new products
The plan was unachieved because ofchanges in demand developments causedchanges in the new product developmentplan.
We will develop new products using ourcore technology.
©Nippon Chemical Industrial Co., Ltd.

5334

4630

26

18/3

54

19/3

20/3
PlanNet sales of new products (Hundred millions of yen)
28
22

21

18/3

Actual

24

19/3

20

16

20/3

* A “new product” is defined as one that has been registered within
the last three years, counting FY of registration as the first year.

16Future Outlook
Continue to implement measures to realize sustainable andstable earnings despite undermined earnings estimates
Consolidated earnings estimates for the year ending March 31, 2021 areundisclosed because of the difficulty in reasonable estimation of the business
impact from the global COVID-19 pandemic as of now.
We will continue to set realization of sustained and steady profits as the mostimportant issue and implement the following key measures:(i) Maintain market shares in existing businesses and develop new customers bysatisfying diversifying customer needs and providing differentiated products(ii) Develop high value-added products, using our core technologies of inorganic
synthesis, crystalline/structure control, surface modification/coating, andphosphine derivatives(iii) Create new value by strengthening cooperation in the domestic and overseas
group and sharing/analyzing information©Nippon Chemical Industrial Co., Ltd.

17

18