Consolidated Financial Results for the Three Months Ended June 30, 2020
(JPGAAP)
August 11, 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: August 13, 2020
Scheduled dividend payment date: ―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 Three Months Ended June 30, 2020 (From April 1, 2020 to June 30, 2020)(1) Consolidated Operating Results(% indicates the rate of increase/decrease against the same period of the previous year)

OperatingincomeNet sales

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

Million yen%

Million yen%

Million yen%

Million yen%

49,280

1.2

9,810

5.0

10,416

4.4

7,608

(2.9)

48,718

(4.2)

9,341

(12.5)

9,981(16.1)

7,835(11.3)

Three months ended June 30, 2020

: 10,091 million yen ,71.1%

Three months ended June 30, 2019

: 5,898 million yen ,(21.3%)

Basic earnings
per share

Diluted net income
per share

Yen

Yen

Three months ended June 30, 2020

52.38

－

Three months ended June 30, 2019

53.13

－

(2) Consolidated Financial Position
Total assets

As of June 30, 2020

Equity ratio

Million yen

Million yen%

232,075

184,55478.8

185,52873.7

249,522

As of March 31, 2020
(Reference) Shareholders' equity:

Net assets

As of June 30, 2020

: 182,914 million yen

As of March 31, 2020

: 183,917 million yen

2. Cash Dividends
Cash dividends per shareFirst
quarter

Secondquarter

Yen

Year ended March 31, 2020－

Year ending March 31, 2021－

Year ending March 31, 2021
(Outlook)

Third
quarter

Yen

Year-end

Yen

Annual

Yen

Yen

42.00

－

48.00

90.00

46.00

－

50.00

96.00

(Note) Revision of the latest released dividend outlook: None

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 sales

Ordinary
incomeNet income attributableto owners of parent

Basic earnings
per share

Million yen%

Million yen%

Million yen%

Million yen%

Yen

Six months
ending September 30, 2020

96,6000.1

16,100(10.7)

16,700(10.4)

12,500(13.9)

86.64

Year ending March 31, 2021

214,500

3.7

39,3001.7

40,4001.030,8000.1

214.23(Note) Revision of the latest released outlook of financial results: None

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 June 30, 2020

: 146,000,000 shares

As of March 31, 2020

: 146,000,000 shares

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

: 1,332,596 shares

As of March 31, 2020

: 522,578 shares

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

: 145,262,467 shares

As of June 30, 2019

: 147,485,633 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 166,100 shares.
In addition, the average number of shares held by the Trust during the period was 166,117 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.
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 year ended June 30(April 1, 2020 to June 30, 2020), the domestic economy experienced a sharp decline in demand due torequests for suspension of work and refraining from going out to prevent the spread of COVID-19 infection. Exports also declined due to theworsening of the global economy. As a result, the domestic economy worsened considerably. Under these circumstance, sales of Basic
Chemicals decreased in the Chemicals Segment. In the Performance Materials Segment, Display Materials and Semiconductor Materials
performed well. Sales of the Agricultural Chemicals Segment were basically unchanged from the previous fiscal year. In the Pharmaceuticals
Segment, sales in the drug discovery business decreased, despite an increase in sales in “Custom Chemicals” (custom manufacturing andprocess researching services for pharmaceutical companies).
As a result, business performances for this period were as follows.
(Million yen)
1Q FY2019

1Q FY2020

ChangeChange from
Outlook (Note)

Sales

48,71849,280

+561

(500)

Operating income

9,341

9,810

+468

+1,300Ordinary income

9,981

10,416+435+1,300

7,835

7,608

(227)

+800

Net income attributable toowners of parent(Note) Outlook is described on page 14 of the FY2019 Presentation Materials (announced on May 15, 2020).
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" for general use (powder coating
agent for paint) and environmental chemicals decreased.
As a result, sales of this segment were 7,415 million yen (a decrease of 987 million yen) and operating income was 668 million yen(a decrease of 195 million yen). Compared to the outlook (Note), sales were below 1.1 billion yen and operating income was below
0.5 billion yen.
(Note) Outlook is described on page 19 and 20 of the FY2019 Presentation Materials.
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-reflective coating for semiconductors (ARC®*) increased, reflecting favorable operation by customers. In the Inorganic
materials, sales of "SNOWTEX" for polishing electronic materials were firm, but sales of Oilfield materials (for enhancing oil recovery)
decreased.
As a result, sales of this segment were 17,084 million yen (an increase of 1,959 million yen) and operating income was 5,310 million yen (anincrease of 1,332 million yen). Compared to the outlook (Note), sales were above 0.2 billion yen and operating income was above 1.1 billion
yen.
(Note) Outlook is described on page 19 and 20 of the FY2019 Presentation Materials.
*ARC® is registered trade mark of Brewer Science, Inc.

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The Agricultural Chemicals Segment
Sales of Fluralaner (active ingredients for veterinary pharmaceuticals) decreased due to the impact of inventories of customers. In domestic
agrochemicals market, sales of "ALTAIR" (paddy rice herbicide) were firm, but shipments of "ROUNDUP" (non-selective leaf treatment
herbicide) declined due to the reorganization of sales standards. In overseas agrochemicals market, sales of "GRACIA" (insecticide) and"TARGA" (herbicide) were strong.
As a result, sales of this segment were 14,582 million yen (a decrease of 84 million yen) and operating income was 4,017 million yen (adecrease of 454 million yen). Compared to the outlook (Note), sales were below 0.6 billion yen and operating income was above 0.4 billion
yen.
(Note) Outlook is described on page 19 and 20 of the FY2019 Presentation Materials.
The Pharmaceuticals Segment
Sales of "LIVALO" (anti-cholesterol drug) declined due to increased sales of generic drugs in Japan and overseas. Sales of "Custom
Chemicals" increased.
As a result, sales of this segment were 1,500 million yen (a decrease of 371 million yen) and operating loss was 70 million yen (adecrease of 452 million yen). Compared to the outlook (Note), sales were above 0.3 billion yen and operating income was the same.
(Note) Outlook is described on page 19 and 20 of the FY2019 Presentation Materials.
Trading
Sales of this segment were 18,182 million yen (an increase of 711 million yen), and operating income was 652 million yen (anincrease of 126 million yen). Compared to the outlook (Note), sales were above 1.1 billion yen and operating income was above 0.2
billion yen.
(Note) Outlook is described on page 19 and 20 of the FY2019 Presentation Materials.
OthersSales of this segment were 4,785 million yen (a decrease of 83 million yen) and operating income was 47 million yen (a decrease of 7
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 June 30, 2020 was 232,075 million yen (a decrease of 17,446 million yen from March 31, 2020). It is mainly due to thedecrease of cash and deposits.
Also, total liabilities as of June 30, 2020 was 47,521 million yen (a decrease of 16,472 million yen). It is mainly due to the decrease of shortterm loans payable.
Net assets as of June 30, 2020 was 184,554 million yen (a decrease of 974 million yen).
As a result of these factors, equity ratio was 78.8% (an increase of 5.1% 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 three months ended June 30, 2020 was 12,394 million yen (9,976 million yen for thesame period of the previous year).
Due to the investment on plant and equipment, net cash used in investing activities for the three months ended June 30, 2020 was 1,557
million yen (603 million yen).
Due to the decrease in loans payable, payment for dividends and share repurchase, net cash used in financing activities for the three3months ended June 30, 2020 was 24,851 million yen (29,782 million yen).
As a result of these factors, cash and cash equivalents at the end of this period was 16,633 million yen, reflecting exchange of 9 million
yen. It decreased by 14,005 million yen from March 31, 2020 (15,566 million yen).
(3) Outlook of Consolidated Financial Results and Other Forward-looking Information
There is no change in the outlook of consolidated business results for the first half and full year ending March 31, 2021 from thestatement announced on May 15, 2020. The outlook did not reflect the effects of the COVID-19 pandemic. At this time, thepandemic is expected to have only a limited impact on the figures.
(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.

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

As ofJune 30, 2020

AssetsCurrent assets
Cash and deposits

30,63916,633

Notes and accounts receivable - trade72,50963,003Merchandise and finished goods

33,131

34,624153

561

Raw materials and supplies

10,59011,422

Other

7,199

8,410

(26)

(27)

154,196

134,629

Buildings and structures, net

24,85024,620

Other, net

26,731

26,229Total property, plant and equipment

51,58150,849

566

518

Other

6,812

6,665

Total intangible assets

7,379

7,183

Investment securities

30,87334,575

Other

5,575

4,922

Work in process

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

Intangible assets
SoftwareInvestments and other assets

Allowance for doubtful accounts

(84)

(84)

Total investments and other assets

36,364

39,412

95,32597,446

249,522232,075

Total non-current assets
Total assets

5

(Million yen)
As ofMarch 31, 2020

As ofJune 30, 2020

Liabilities
Current liabilities
Notes and accounts payable - trade16,876

15,828

Short-term loans payable

23,53812,651

Income taxes payable

6,167

1,916

Provision for bonuses

2,151

677

26

7

Other

11,254

11,270Total current liabilities

60,01542,352

Provision for directors' bonuses

Non-current liabilities
Long-term loans payable

1,076

1,076

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

309

46

50

208

227

Other

2,053

3,322

Total non-current liabilities

3,978

5,169

63,99347,521

Capital stock

18,942

18,942

Capital surplus

13,613

13,613Retained earnings

146,997

147,615

Treasury shares(2,470)(6,545)

Total shareholders' equity

177,082

173,625

Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

7,782

10,163Foreign currency translation adjustment

(896)

(824)

Remeasurements of defined benefit plans

(51)

(49)

6,834

9,289

1,610

1,639

185,528

184,554249,522232,075

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

6

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

Three Months Ended
June 30, 2020

Net sales

48,71849,280

Cost of sales

28,31028,480Gross profit

20,40820,799Selling, general and administrative expenses

11,067

10,989Operating income

9,341

9,810

Non-operating income
Interest income

65Dividend income

330

306

Equity in earnings of affiliates

287

256

Other

273

272

Total non-operating income

898

841

42

31

Non-operating expenses
Interest expenses
Loss on disposal of non-current assets

32

65

Foreign exchange losses

170

99

Other

12

38

Total non- operating expenses

258

235

9,981

10,416

Gain on sales of investment securities

852-

Total extraordinary income

852

-

-

-

Income before income taxes and non-controlling interests

10,833

10,416

Income taxes - current

2,197

1,988

Ordinary income
Extraordinary income

Extraordinary losses

764

800

Total income taxes

Income taxes - deferred

2,961

2,788

Net income

7,872

7,627

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

7

36

19

7,835

7,608

- Consolidated Statements of Comprehensive Income(Million yen)Three Months Ended
June 30, 2019

Three Months Ended
June 30, 2020

7,872

7,627

(1,378)

2,380

(586)

81

Remeasurements of defined benefit plans, net of tax(8)1

Share of other comprehensive income of entities accounted forusing equity method(0)0(1,974)

2,464

5,898

10,091

5,913

10,062(15)

28

Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment

Total other comprehensive income
Comprehensive income(Comprehensive income attributable to)
Owners of parent
Non-controlling interests8(3) Consolidated Statements of Cash Flows(Million yen)Three Months Ended
June 30, 2019

Three Months Ended
June 30, 2020

Income before income taxes and non-controlling interests

10,833

10,416

Depreciation and amortization

2,260

2,317

0

16

Interest and dividend income

(336)

(311)

Loss (gain) on sales of investment securities

(852)

(0)

Interest expenses

42

31

Loss (gain) on disposal of non-current assets

32

65

Decrease (increase) in notes and accounts receivable - trade

4,849

9,528

Decrease (increase) in inventories(1,459)(2,697)

Increase (decrease) in notes and accounts payable - trade(1,071)(1,065)

Other

(874)

(261)

Subtotal

13,42518,038Cash flows from operating activities

Amortization of goodwill

Interest and dividend income received

604

410

Interest expenses paid

(37)

(29)

Income taxes paid

(4,016)(6,025)

Net cash provided by (used in) operating activities

9,976

12,394(2)(81)

Proceeds from sales of investment securities

1,746

0

Purchase of property, plant and equipment

Cash flows from investing activities
Purchase of investment securities(2,247)(2,049)Payments for retirement of property, plant and equipment

(29)

(43)

Purchase of intangible assets

(16)

(104)

Net decrease (increase) in short-term loans receivable

(26)

749

Purchase of long-term prepaid expenses

(44)

(14)

Other

17

(15)

(603)

(1,557)

Net increase (decrease) in short-term loans payable(17,463)(10,860)

Cash dividends paid

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

Share repurchase(3,829)(4,075)

Setting up the trust for share repurchase(2,170)(2,925)

Net cash provided by (used in) financing activities(29,782)(24,851)

Net cash provided by (used in) investing activities
Cash flows from financing activities

Dividends paid to non-controlling interests

(206)

9

Net increase (decrease) in cash and cash equivalents

Effect of exchange rate change on cash and cash equivalents(20,616)(14,005)

Cash and cash equivalents at beginning of period

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

15,566

16,6339

(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. As a result, treasury shares decreased by 0 million yen during thefirst quarter of current consolidated fiscal year.
In addition, the Company repurchased 810,000 treasury shares based on the resolution of Board of Directors' meeting held on May 15, 2020.
As a result, treasury shares increased by 4,074 million yen during the first quarter of current consolidated fiscal year.
(Segment Information)
1. Information Regarding Sales, Income (Loss) of Reportable Segments
1) For the Three Months Ended June 30, 2019 (From April 1, 2019 to June 30, 2019)
Chemicals

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals(Million yen)
Trading

Others

Total

Adjustment(1)

Consolidated
Total

Sales
Sales to outside customers

6,025

13,37013,898

1,860

11,6801,877

48,712

5Intersegment Sales

2,377

1,754

769

11

5,789

2,991

13,693(13,693)

㻙

8,402

15,125

14,667

1,871

17,4704,868

62,406(13,687)

48,718

864

3,977

4,471

382

526

55

10,278

(937)

9,341

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

48,718Notes: (1) The (937) million yen adjustment in segment income includes (183) million yen in intersegment eliminations, 5 million yen sales
not attributable to any reporting segment, and (759) 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 Three Months Ended June 30, 2020 (From April 1, 2020 to June 30, 2020)
Chemicals

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals(Million yen)
Trading

Others

Total

Adjustment(1)

Consolidated
Total

Sales
Sales to outside customers

5,127

14,84012,9991,500

13,126

1,684

49,2790Intersegment Sales

2,287

2,244

1,583

-

5,055

3,100

14,271(14,271)-

7,415

17,084

14,582

1,500

18,182

4,785

63,550(14,270)

49,280

668

5,310

4,017

(70)

652

47

10,627

(817)

9,810

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

49,280Notes: (1) The (817) million yen adjustment in segment income includes (59) million yen in intersegment eliminations, 0 million yen sales
not attributable to any reporting segment, and (758) 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 the firstquarter of the previous fiscal year is based on the revised method.

10