Consolidated Financial Results for the Nine Months Ended December 31, 2018
(JPGAAP)
February 8, 2019
Stock Exchange: Tokyo
Name of listed company: Nissan Chemical Corporation
URL: http://www.nissanchem.co.jp/
Code Number: 4021
Representative: Kojiro Kinoshita, President
Inquiry to: Hironori Yoshida, Executive Officer and Director of Finance and Accounting Department Tel. +81 3 4463 8404
Scheduled submission date of quarterly report: February 14, 2019
Supplemental information: Yes
Financial results meeting : Yes(Amounts rounded down to the nearest million yen)

1. Consolidated Financial Results for the Nine Months Ended December 31, 2018 (From April 1, 2018 to December 31, 2018)(1) Consolidated Operating Results(% indicates the rate of increase/decrease against the same period of the previous year)

OperatingincomeNet sales

Nine months ended December 31, 2018
Nine months ended December 31, 2017
(Note) Comprehensive income:Ordinary
incomeNet income attributableto owners of parent

Million yen%

Million yen%

Million yen%

Million yen%

141,872

6.9

23,821

6.4

25,391

6.0

18,833

6.2

132,680

8.7

22,392

19.7

23,94724.0

17,734

24.6

Nine Months Ended December 31, 2018

: 15,443 million yen , (32.0%)

Nine months ended December 31, 2017

: 22,703 million yen , 65.7%

Basic earnings
per share

Diluted net income
per share

Yen

Yen

Nine months ended December 31, 2018126.64

㸫Nine months ended December 31, 2017117.68㸫(2) Consolidated Financial Position
Total assets

Net assets

Equity ratio

Million yen

Million yen%

As of December 31, 2018221,646

175,31478.3

As of March 31, 2018

246,040

176,364

71.0(Reference) Shareholders' equity:

As of December 31, 2018

: 173,594 million yen

As of March 31, 2018

: 174,586 million yen

2. Cash Dividends
Cash dividends per shareFirst
quarter

SecondquarterYen

Thirdquarter

Yen

Year-end

Yen

Year ended March 31, 2018

䠉

32.00

㸫

Year ending March 31, 2019

䠉

40.00

㸫

Year ending March 31, 2019
(Forecast)

Annual

Yen

Yen

36.00

68.00

42.00

82.00

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

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2019 (From April 1, 2018 to March 31, 2019)(% indicates the rate of increase/decrease against the same period of the previous year)
OperatingincomeNet salesYear ending March 31, 2019

Ordinary
incomeNet income attributableto owners of parent

Basic earnings
per share

Million yen%

Million yen%

Million yen%

Million yen%

Yen

205,500

6.3

38,1008.9

40,10010.7

30,00010.5

201.92(Note) Revision of the latest released forecast of financial results: None
The above basic earnings per share is recalculated using the average number of share outstanding.
(The impact of the repurchase of own shares described in "Notice Regarding Repurchase of the Company’s Own Shares " announced today is considered.)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 December 31, 2018

: 149,000,000 shares

As of March 31, 2018

: 151,000,000 shares

2. Number of treasury shares
As of December 31, 2018:

511,532 shares

As of March 31, 2018

: 1,534,562 shares

3. Average number of shares outstanding
As of December 31, 2018

: 148,719,567 shares

As of December 31, 2017

: 150,700,798 shares* Presentation regarding implementation status of quarterly review procedures
The financial release is not subject to quarterly review.
* Explanations regarding appropriate use of business forecasts and other special notes
The business forecast contained in this report is based on information available at the time of disclosure.
Actual operating results may differ materially from the forecast 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..................................................................................................................................... 4(3) Forecast of Consolidated Financial Results and Other Forward-looking Information(4) Basic Policy on Distribution of Earnings
2. Consolidated Financial Statements.................................................. 4......................................................................................................... 4................................................................................................................... 5(1) Consolidated Balance Sheets ...................................................................................................................... 5(2) Consolidated Statements of Income and Statements of Comprehensive Income(3) Consolidated Statements of Cash Flows...................................................... 7........................................................................................................ 9(4) Notes to Consolidated Financial Statements.................................................................................................. 10(Notes on Assumption of Going Concern)................................................................................................. 10(Notes on Significant Changes in Shareholders' Equity)................................................................................10(Additional Information)........................................................................................................................10(Segment Information).........................................................................................................................10(Significant Subsequent Events)............................................................................................................. 111

1㸬Qualitative Information on Quarterly Results(1) Business Performance
During the year ended December 31 (April 1, 2018 to December 31, 2018), the domestic economy continued toshow a moderate recovery such as increase in capital investment and recovery in consumer spending due to steadycorporate earnings and improvement in employment and income conditions. While, the outlook for the world economy
is becoming uncertain, due to U.S.-China trade friction etc. In the Chemicals Segment, sales of Basic Chemicals
increased, while sales of Fine Chemicals decreased from the same period of the previous year. In the Performance
Materials Segment, Display Materials and Semiconductor Materials performed well. In the Agricultural Chemicals
Segment, shipments of Fluralaner (active ingredients for veterinary pharmaceuticals) increased. In the Pharmaceutical
Segment, the domestic sales of "LIVALO" (anti-cholesterol drug) decreased due to expansion of generic products.
As a result, business performance for this period was as follows.
    (Million yen)Year ending FY2017

Year ending FY2018

Accumulated Consolidated

Accumulated Consolidated

Period for the Third Quarter

Period for the Third Quarter

ChangeChange from(Year on Year)

TargetNet sales

132,680

141,872+9,192+1,000Operating income 22,392

23,821+1,429+1,200Ordinary income 23,947

25,391+1,443+1,100 17,734

18,833+1,098+800

Net income attributable toowners 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) decreased,sales of melamine (adhesives agent for particle board) increased. In the Fine Chemicals, sales increased in "HI-LITE"(chlorinated isocyanuric acid for sterilizing), while "TEPIC" (epoxy compound for LED sealants) decreased. Department
sales increased while profit decreased due to price revisions occur from increases in raw material and freight rates.
As a result, sales of this segment was 26,621 million yen (an increase of 697 million yen) and operating income was2,242 million yen (a decrease of 276 million yen). Compared to the third quarter target, net sales was below 600 million
yen and operating income was below 400 million yen.
The Performance Materials Segment
In the Display Materials, sales of "SUNEVER" (LCD alignment coating) for small-and medium-sized devices suchas smartphones was firm. In the Semiconductor Materials, sales of antireflective coatings for semiconductors (ARC®*
and multi-layered materials (OptiStack®*) increased, supported by strong utilization by customers. In the Inorganic
Materials, sales for "SNOWTEX" (semiconductor polishing, hard coating, etc.) increased, while sales for Organo /Monomer sol (various kinds of coatingmaterials,resin additive) decreased. Shipments of Oilfield materials (forenhancing oil recovery) was solid.
As a result, sales of this segment was 48,644 million yen (an increase of 4,465 million yen) and operating income
was 12,448 million yen (an increase of 772 million yen). Compared to the third quarter target, the sales and operating
income was above 800 million yen.
*ARC® and Optistack® are registered trade mark of Brewer Science, Inc.

2

The Agricultural Chemicals Segment
Shipments of Fluranel remained steady, while sales of "Round-up" (non-selective herbicide) decreased dueto the impact of earlier shipments in the previous fiscal year, intense heat and natural disaster in Japan during
the first half year. Oversea agrochemicals sales was also strong due to increase of “PULSOR” (fungicide) and“Permit” (herbicide) as well as the launch of “GRACIA” (insecticide) in South Korea.
As a result, sales of this segment net was 34,649 million yen (an increase 2,154 million yen) and operating
income was 8,527 million yen (an increase of 1,067 million yen). Compared to the third quarter target, the sales
was above 200 million yen and operating income was above 100 million yen.
The Pharmaceuticals Segment
Sales of "LIVALO" was favorable in South Korea and other countries, while decreased in Japan due to an increasein sales of generics. Sales of "Custom Chemicals" (custom manufacturing and process researching services forpharmaceutical companies) decreased due to absence of a large development project completed in the previous fiscal
year.
As a result, sales of this segment was 5,551 million yen (a decrease of 282 million yen) and operating income was
1,011 million yen (a decrease of 42 million yen). Compared to the third quarter target, the sales was above 600 million
yen and operating income was above 300 million yen.
Trading
Sales of this segment was 51,525 million yen (an increase of 6,532 million yen) and operating income was 1,709
million yen (an increase of 277 million yen). Compared to the third quarter target, the sales was above 800 million yen
and operating income was above 100 million yen.
OthersSales of this segment was 17,676 million yen (an increase of 3,382 million yen) and operating income was 449
million yen (an increase of 179 million yen).

3(2) Financial Position(Position of Assets, Liabilities and Net Assets)
Total assets as of December 31, 2018 was 221,646 million yen (a decrease of 24,394 million yen from March 31,2018). It is mainly due to the decrease of notes and accounts receivable - trade.
Also, total liabilities as of December 31, 2018 was 46,331 million yen (a decrease of 23,343 million yen). It is mainly
due to the decrease of loans payable.
Net assets as of December 31, 2018 was 175,314 million yen (a decrease of 1,050 million yen).
As a result of these factors, equity ratio was 78.3% (an increase of 7.3% from March 31, 2018).
(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 nine months ended December 31, 2018
was 32,434 million yen (34,325 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 nine months ended
December 31, 2018 was 9,684 million yen (12,030 million yen).
Due to the decrease in loans payable, payment for dividends and share repurchase, net cash used in financing
activities for the nine months ended December 31, 2018 was 37,255 million yen (31,605 million yen).
As a result of these factors, cash and cash equivalents at end of this period was 23,099 million yen (26,508 millionyen), reflecting exchange of 97 million yen. It decreased by 14,603 million yen from March 31, 2018.
(3) Forecast of Consolidated Financial Results and Other Forward-looking Information
There is no change in the forecast of consolidated business results for the fiscal year ending March 31, 2019from the statement announced on November 5, 2018.
(4) Basic Policy on Distribution of Earnings
The Company’s basic policy of profit allocation is returning to shareholders by improving company value throughincreasing revenue in the medium and long terms.
We aim to realize dividend payout ratio to be 40% in FY2018 and maintain total payout ratio to be 70% in
medium-term business plan “Vista2021” launched from April 2016.

4

2. Consolidated Financial Statements(1) Consolidated Balance Sheets(Million yen)
As ofMarch 31, 2018

As ofDecember 31, 2018

AssetsCurrent assets
Cash and deposits

37,70223,099Notes and accounts receivable - trade65,422

48,151

Merchandise and finished goods

29,85537,707115

959

Raw materials and supplies

7,797

10,236

Other

4,748

6,161

(34)

(34)

145,606

126,280

Buildings and structures, net

24,411

24,863

Other, net

30,062

29,048

Total property, plant and equipment

54,47353,911

Software

775

759

Other

993

848

1,768

1,607

Investment securities

38,51734,565

Other

5,766

5,373

Work in process

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

Intangible assets

Total intangible assets
Investments and other assets

Allowance for doubtful accounts

(92)

(92)

Total investments and other assets

44,191

39,846

100,433

95,365

246,040

221,646

Total non-current assets
Total assets

5

(Million yen)
As ofMarch 31, 2018

As ofDecember 31, 2018

Liabilities
Current liabilities
Notes and accounts payable - trade18,57920,270

Short-term loans payable

26,145

6,311

Income taxes payable

5,156

642

Provision for bonuses

2,011

656

27

18

Other

10,95012,792

Total current liabilities

62,871

40,692

Provision for directors' bonuses

Non-current liabilities
Long-term loans payable

2,446

1,569

Provision for business structure improvement

516

404

Provision for loss on business of subsidiaries and affiliates

309

309

Net defined benefit liability

126

151

Other

3,406

3,204

Total non-current liabilities

6,804

5,639

69,67546,331

Capital stock

18,942

18,942

Capital surplus

13,613

13,613Retained earnings

133,822

132,661

Treasury shares(5,962)(2,291)

Total shareholders' equity

160,416

162,925

Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
13,653

10,202Foreign currency translation adjustment

125

115

Remeasurements of defined benefit plans

390

351

14,170

10,669

1,778

1,719

176,364

175,314

246,040

221,646

Valuation difference on available-for-sale securities

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)
Nine Months Ended
December 31, 2017

Nine Months Ended
December 31, 2018

Net sales

132,680

141,872

Cost of sales

77,38482,409Gross profit

55,296

59,463

Selling, general and administrative expenses

32,90435,641

Operating income

22,392

23,821Non-operating income
Interest income

18

17

Dividend income

613

676

1,020

603

Equity in earnings of affiliates
Other

614

1,026

2,266

2,324

Interest expenses

99

81

Loss on disposal of non-current assets

257

473

Other

354

199

Total non- operating expenses

711

754

Total non-operating income
Non-operating expenses

Ordinary income

23,94725,391

Extraordinary income--

Extraordinary losses--

Income before income taxes and non-controlling interests

23,94725,391

Income taxes - current

5,649

4,983

Income taxes - deferred

411

1,455

Total income taxes

6,060

6,439

Net income

17,886

18,952

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

7

152

118

17,734

18,833

- Consolidated Statements of Comprehensive Income(Million yen)

Net income

Nine Months Ended
December 31, 2017

Nine Months Ended
December 31, 2018

17,886

18,952Other comprehensive income
4,150(3,450)Foreign currency translation adjustment

705

(18)

Remeasurements of defined benefit plans, net of tax

(38)

(39)

Share of other comprehensive income of entities accounted forusing equity method

(0)

(0)

4,816

(3,509)22,703

15,44322,486

15,332

216

110

Valuation difference on available-for-sale securities

Total other comprehensive income
Comprehensive income(Comprehensive income attributable to)
Owners of parent
Non-controlling interests8(3) Consolidated Statements of Cash Flows(Million yen)
Nine Months Ended
December 31, 2017

Nine Months Ended
December 31, 2018

Income before income taxes and non-controlling interests

23,94725,391

Depreciation and amortization

7,441

7,889

Interest and dividend income

(631)

(694)

Interest expenses

99

81

Loss (gain) on disposal of non-current assets

257

473

Cash flows from operating activities

Decrease (increase) in notes and accounts receivable - trade

13,16917,250Decrease (increase) in inventories(8,023)(11,166)

Increase (decrease) in notes and accounts payable - trade

4,171

1,729

Other

(302)

(439)

Subtotal

40,12940,515Interest and dividend income received

1,309

1,139

(85)

(74)

Income taxes paid

(7,026)(9,145)

Net cash provided by (used in) operating activities

34,32532,434

(757)

(908)

65

398

(10,663)(7,441)

Payments for retirement of property, plant and equipment

(217)

(376)

Purchase of intangible assets

(407)

(172)

Net decrease (increase) in short-term loans receivable591(1,231)

Purchase of long-term prepaid expenses

(60)

(46)

Other

(581)

95

(12,030)(9,684)(15,954)(19,485)

Interest expenses paid

Cash flows from investing activities
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of property, plant and equipment

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(1,535)(1,277)

Cash dividends paid

(9,063)(11,320)

(39)

(167)

(5,001)(5,004)

Dividends paid to non-controlling interests
Share repurchase
Other

(11)

(0)

(31,605)(37,255)

117

(97)

Net increase (decrease) in cash and cash equivalents(9,192)(14,603)

Cash and cash equivalents at beginning of period

35,70137,702

Cash and cash equivalents at end of period

26,50823,099Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents9(4) Notes to Consolidated Financial Statements(Notes on Assumption of Going Concern)
Not applicable.
(Notes on Significant Changes in Shareholders' Equity)
The Company canceled 1,000,000 treasury shares on May 8, 2018 based on the resolution of Board of Directors' meeting held on April 24, 2018.
In addition, the Company canceled 1,000,000 treasury shares on August 31, 2018 based on the resolution of Board of Directors' meeting held on
August 21, 2018. As a result, retained earnings and treasury shares decreased by 8,674 million yen during the third quarter ofcurrent consolidated fiscal year.
Also, the Company repurchased its own shares based on the resolution of Board of Directors' meeting held on May 11, 2018. As a result, treasury
shares increased by 4,999 million yen during the third quarter of current consolidated fiscal year.
(Additional Information)"Partial Amendments to Accounting Standard for Tax Effect Accounting" (ASBJ Statement No. 28, February 16, 2018) was adopted from the
beginning of the first quarter of this fiscal year. As a result, deferred tax assets are classified as "Investment and other assets" and deferred
tax liabilities are classified as "Non-current liabilities" respectively.
(Segment Information)
1. Information Regarding Sales, Income (Loss) of Reportable Segments
1) For the Nine Months Ended December 31, 2017 (From April 1, 2017 to December 31, 2017)
Chemicals

Performance Agricultural
Materials
Chemicals

Pharmaceuticals

Trading(Million yen)
Others

Total

Adjustment(1)

Consolidated
Total

Sales
Sales to outside customers

18,836

39,07029,516

5,807

33,813

5,635

132,680

䠉

132,680

Intersegment Sales

7,087

5,108

2,977

26

11,1798,657

35,037(35,037)

㻙Total Sales

25,924

44,17832,494

5,834

44,992

14,293

167,718(35,037)

132,680

Segment Income or Loss
(Operating Income or Loss)

2,519

11,676

7,459

1,053

1,432

270

24,412(2,020)22,392

Notes: (1) The (2,020) million yen adjustment in segment income includes (218) million yen in intersegment eliminations and (1,801) 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.
(Million yen)

2) For the Nine Months Ended December 31, 2018 (From April 1, 2018 to December 31, 2018)
Chemicals

Performance Agricultural
Materials
Chemicals

Pharmaceuticals

Trading

Others

Total

Adjustment(1)

Consolidated
Total

141,872

Sales
Sales to outside customers

19,32143,09031,372

5,535

36,482

6,070

141,872䠉Intersegment Sales

7,299

5,554

3,276 㻌㻌㻌㻌㻌㻌㻌㻌㻌㻌㻌㻌㻌㻝㻡

15,043

11,606

42,795(42,795)

㻙Total Sales

26,621

48,64434,6495,551

51,525

17,676

184,668(42,795)

141,872

Segment Income or Loss
(Operating Income or Loss)

2,242

12,448

8,527

1,011

1,709

449

26,389(2,568)23,821

Notes: (1) The (2,568) million yen adjustment in segment income includes (426) million yen in intersegment eliminations and (2,141) 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.

10

(Significant Subsequent Events)
The Company, at the board of Director's meeting held on February 8, 2019, has decided to repurchase its shares in the market
under Article 156 of the Japanese Corporation Act, as applied pursuant to Article 165, Paragraph 3 of the same Act.
1. Purpose of repurchaseTo facilitate flexible implementation of capital policy in response to changes in the business environment.
2. Details of repurchase(1) Class of shares: Common shares of the company(2) Total number of shares: Up to 900,000 shares(Rate of the maximum shares to be acquired to the total outstanding shares: 0.61%)(3) Total amount: Up to 4,000,000,000 yen(4) Period of repurchase: From February 12, 2019 to April 26, 2019(For reference) Number of treasury shares as of December 31, 2018
Total number of shares issued(excluding treasury shares)
Number of treasury shares: 148,488,468 shares:

511,532 shares

11