Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020
<Under Japanese GAAP>May 14, 2020

These financial statements have been prepared for reference only in accordance with accounting principles and practices generally accepted in Japan.

Stock exchange listing: Tokyo (First Section)
NAGASE & CO., LTD.
Code number:8012
URL (http: //www.nagase.co.jp/english/)Representative:
Kenji Asakura, Representative Director and President
Contact:
Yoshihisa Shimizu, Executive Officer, General Manager, Accounting DivisionTEL:+81-3-3665-3103
Annual general meeting of stockholders (scheduled): June 22, 2020
Start of distribution of dividends (scheduled): June 23, 2020
Securities report filing (scheduled): June 23, 2020
Supplementary documents: Yes
Investors’ meeting: Yes(Note: Amounts have been rounded down to the nearest million yen.)

1. Consolidated Results for the Fiscal Year Ended March 31, 2020
(April 1, 2019 to March 31, 2020)(1) Consolidated Operating Results
Net salesFYE March 2020
FYE March 2019

Millions of yen(Notes) Comprehensive income

FYE March 2020
FYE March 2019

Operating income%

799,559
807,755(% = year-on-year change)
Profit attributable toOrdinary income
owners of the parent

(1.0)
3.0

Millions of yen%

19,16725,226(24.0)
4.6

Millions of yen%

19,083
26,643(28.4)
2.5

Millions of yen

15,144
20,136%(24.8)
17.2

FYE March 2020: ¥3,579 million (69.7% decrease)
FYE March 2019: ¥11,803 million (42.8% decrease)
Earnings per
share
Yen
122.12161.30(Reference) Equity in earnings of affiliates

Earnings per
share (diluted)
Yen−−

Ordinary income/total assets
%
%
4.9
3.2
6.6
4.7

Return on equity

Operatingincome/net sales
%
2.4
3.1

FYE March 2020: (¥538) million
FYE March 2019: ¥538 million(2) Consolidated Financial Position
Total assets
FYE March 2020
FYE March 2019
(Reference) Equity capitalMillions of yen

611,477
567,346

Net assets
Millions of yen

313,243
312,609

Net worth ratio

Net assets per share
%

Yen

49.9
54.2

2,462.04
2,481.01

Cash flows fromfinancing activities

Cash and cash
equivalents, end of theyear

FYE March 2020: ¥305,322 million
FYE March 2019: ¥307,674 million(3) Consolidated Cash Flows
Cash flows fromoperating activitiesFYE March 2020
FYE March 2019

Millions of yen

33,074
17,375

Cash flows frominvesting activities
Millions of yen(49,208)(7,325)

Millions of yen

24,334(8,909)Millions of yen

50,47144,017

2. Dividends
Annual Dividends per Share
Fiscal
2Q
3Q
year end

1Q
FYE March 2019
FYE March 2020
FYE March 2021 (estimate)

Yen

−
−
−

Yen

18.00
22.00
22.00

Yen

Yen

24.00
22.00
22.00

−
−
−

Annual
Yen

42.00
44.00
44.00

Total dividends
Dividends/
Payout ratio
paid
net assets(consolidated)(full fiscal year)(consolidated)
Millions of yen

5,230
5,456

%

%

26.0
36.0
43.7

1.7
1.8

3. Projected Consolidated Results for the Fiscal Year Ending March 31, 2021
(April 1, 2020 to March 31, 2021)(% = year-on-year change)
Net sales
Millions of yen

Full fiscal year
(Note)

754,000

Operating income
%

(5.7)

Millions of yen

15,000

Profit attributable toowners of the parent

Ordinary income% Millions of yen(21.7)

15,500% Millions of yen(18.8)

12,500Earnings per
share

%

(17.5)

Yen

100.80

Our consolidated earnings forecasts for the fiscal year ending March 2021 are based on the assumption that the economic
impact of the COVID-19 epidemic will largely abate in the second half.

* Notes(1) Changes in major subsidiaries during the period (changes in specified subsidiaries accompanying changes in thescope of consolidation): Yes
New: 1 (Company name: Nagase Holdings America Corporation) Excluded: ― (Company name:)(Note)
Please refer to 3. Consolidated Financial Statements and Notes (5) Notes Related to Consolidated
Financial Statements, (Changes in Significant Subsidiaries During the Period) on P.15 of this document.
(2) Changes of accounting principles, changes in accounting estimates, and restatement of prior period financial
statements after error correctionsi.
Changes in accordance with revisions to accounting and other standards: Yes
ii. Changes in items other than (i) above: Noiii. Changes in accounting estimates: No
iv. Restatement of prior period financial statements after error corrections: No(Note)
Please refer to 3. Consolidated Financial Statements and Notes (5) Notes Related to Consolidated
Financial Statements, (Change in Accounting Policy) on P.15 of this document.
(3) Number of shares issued and outstanding (common stock)i.
Number of shares issued and outstanding as of the fiscal period end (including treasury stock)
March 31, 2020
127,408,285 shares March 31, 2019
127,408,285 shares
ii.

iii.

Number of treasury stock as of the fiscal period end
March 31, 2020
3,396,695 shares

March 31, 2019

3,396,352 shares

Average number of shares during the period
March 31, 2020
124,011,793 shares

March 31, 2019

124,842,824 shares* These consolidated financial statements are not subject to audit by an independent audit corporation* Cautionary Statement with Respect to Forecasts of Consolidated Business Results
The earnings forecasts presented in this document are based upon currently available information and assumptions
deemed rational. A variety of factors could cause actual results to differ materially from forecasts.
Please refer to 1. Business Performance (Forecast for the Fiscal Year Ending March 2021) on P.4 of this document.

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020

Attachments
1. Business Performance2(1) Review of Business Performance2(2) Review of Financial Position

5(3) Dividend Policy and Dividends for the Fiscal Years Ending March 2020 and 2021

6

2. Basic Policy on the Selection of Accounting Standards

6

3. Consolidated Financial Statements and Notes

7(1) Consolidated Balance Sheets

7(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

9(3) Consolidated Statements of Changes in Shareholders’ Equity

11(4) Consolidated Statements of Cash Flows

13(5) Notes Related to Consolidated Financial Statements

15(Assumption for Going Concern)

15(Changes in Significant Subsidiaries During the Period)

15(Changes in Accounting Policies)

15(Segment Information, etc.)

15(Per-Share Data)

22(Significant Subsequent Events)

22

－

1 －

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020

1. Business Performance(1) Review of Business Performance(Performance for the Fiscal Year Ended March 2020)a. General Summary of Results
Although employment continued to improve, the Japanese economy experienced a slowdown in manufacturing and capital
investment during the current consolidated fiscal year as global economy decelerated. Despite a push from strong corporate
earnings in the United States, the slowdown in the Chinese economy due to an extended period of U.S.-China trade frictions, aswell as the global spread of COVID-19 in the fourth quarter, has caused the global economy to deteriorate quickly.
In this environment, the Company recorded domestic sales of ¥402.39 billion (-2.5% year on year) for the current consolidated
fiscal year. Overseas sales amounted to ¥397.16 billion (+0.5%). In total, the Company recorded ¥799.55 billion (-1.0%) in net
sales.
The Company recorded gross profit of ¥104.9 billion (-0.5%) and operating income of ¥19.16 billion (-24.0%) in conjunction
with lower sales. Ordinary income amounted to ¥19.08 billion (-28.4%) while profit attributable to owners of the parent
amounted to ¥15.14 billion (-24.8%).

b. Segment Summary
Functional Materials
The Functional Materials segment recorded lower sales in both domestic and overseas markets.
The Performance Chemicals business recorded lower sales due to lower sales in coating raw materials and urethane materials,
as a result of lower automotive production in Japan and overseas.
The Speciality Chemicals business recorded lower sales overall, from decreased sales of both electronics chemicals for thesemiconductor and other related electronics industries in Japan and overseas, and of industrial oil solutions.
As a result, sales for the segment amounted to ¥169.31 billion, which was a ¥10.3 billion (-5.7%) decrease from the priorconsolidated fiscal year. Operating income fell ¥130 million (-2.4%) to ¥5.36 billion for the year.

Advanced Materials & Processing
The Advanced Materials & Processing segment recorded slightly lower domestic sales as well as lower sales in overseas
markets.
The Colors & Advanced Processing business recorded higher sales as a whole, driven by growth in sales of digital print
processing materials both in Japan and overseas, despite reduced sales in Japan of plastic resins for industrial and packaging
applications and conductive materials.
The Polymer Global Account business mainly sells plastics to the office equipment, appliance, and video game device markets.
Sales in these businesses were lower overall, caused by decreases in Japan, Greater China, and ASEAN.
As a result, sales for the segment amounted to ¥267.07 billion, which was a ¥8.12 billion (-3.0%) decrease. Operating income
was ¥8.52 billion, an increase of ¥430 million (+5.3%) year on year, mainly due to improved profitability among theCompany’s manufacturing subsidiaries in Japan.

Electronics
Despite increased sales of photolithography materials and of formulated epoxy resins for mobile device electronic components
and for semiconductor industries, the Electronics segment recorded lower net sales overall driven by lower sales of precision
processing-related, equipment-related, and display-related materials used in connection with intermediate processing insemiconductors and other applications.
－

2 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020

As a result, sales for the segment amounted to ¥115.12 billion, which was a ¥7.19 billion (-5.9%) decrease. Operating income
decreased ¥2.0 billion (-27.1%) to ¥5.39 billion, mainly due to weaker profitability at some of the Company’s manufacturingsubsidiaries overseas.

Mobility & Energy
The Mobility Solutions business recorded lower sales both in Japan and overseas, due to slightly lower sales in car electronicsrelated products in Japan as well as lower sales in the resins business in Japan and overseas.
As a result, sales for the segment amounted to ¥126.0 billion, which was a ¥13.23 billion (-9.5%) decrease. Operating income
fell ¥1.16 billion (-38.1%) to ¥1.89 billion for the year.
(Note) As of the current consolidated fiscal year, the name of the former Automotive & Energy Segment has been changed to
the Mobility & Energy Segment.

Life & Healthcare
Despite slightly lower domestic sales, the Life & Healthcare segment recorded significantly higher sales overall due tomaterially higher overseas sales.
Sales of TREHA™ and other products in the food ingredients field in the Life & Healthcare Products business were downslightly in Japan but higher overseas. Further, due to the addition of sales from the Prinova Group, newly-acquired by theCompany in the consolidated second quarter of the fiscal year, overseas sales materially increased. Sales of AA2G™ tocustomers in the skin care and toiletries sectors were lower in Japan. However, overseas sales were higher due to favorable
sales primarily in Europe. In the medical and pharmaceutical field, though sales in the pharmaceutical business decreased, salesof pharmaceutical raw materials and intermediates as well as medical materials increased, driving increased sales for thebusiness as a whole.
The Beauty Care Products business, which includes sales of cosmetics and health foods, recorded lower sales due to weak
performance across all product categories.
As a result, sales for the segment amounted to ¥121.54 billion, which was a ¥30.75 billion (+33.9%) increase compared to theprior consolidated fiscal year. On the other hand, the Prinova Group’s contribution to profitability during the fiscal year was
limited because of the temporary costs associated with business combination. In addition, profitability at some of theCompany’s manufacturing subsidiaries in Japan has deteriorated. As a result, operating income fell ¥670 million (-14.5%) to¥3.97 billion for the year.

OthersNo special matters to disclose.

－

3 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020

(Forecast for the Fiscal Year Ending March 2021)
a. Performance Forecast for the Fiscal Year Ending March 2021
The NAGASE Group expects the global economy to worsen significantly in the fiscal year ending March 2021 due to theimpact of the COVID-19 epidemic spreading globally.
With that backdrop, the next fiscal year will be the final year of Mid-term Management Plan ACE-2020. Our basic approach
will be to execute the policies set out in ACE-2020, but we will modify our management strategies as appropriate to respond to
the COVID-19 outbreak and to the external factors we foresee for our customers, markets, and society after the outbreak is
contained.
Our earnings forecasts for the fiscal year ending March 2021, shown below, are based on the assumption that the economic
impact of the COVID-19 epidemic will largely abate in the second half.
In the Life & Healthcare Segment, we foresee a significant increase in sales. This will be driven by the Prinova Group,
acquired by the Company in the consolidated second quarter of the fiscal year, now able to contribute for an entire fiscal year,
and by favorable trends especially in North America and Europe, of sales of vitamins, amino acids, and other products of the
Prinova Group. In other segments, however, we forecast sales to decrease considerably because of the impact of COVID-19
spreading globally.
These forecasts have been developed based on foreign exchange rates of ¥106 to the U.S. dollar and ¥14.7 to the RMB.
Further, these forecasts were calculated based on information available at the time and on certain assumptions deemed rational.
Actual results may vary significantly due to a variety of factors, including the time for containing the COVID-19 outbreak,business conditions overseas and in Japan, exchange rate trends, etc. Any issues that require disclosure in the future will be
disclosed with all haste if important developments relating to our forecasts for the fiscal year ending March 2021 occur.

Net sales

Operating income

Ordinary income(Millions of yen)
Profit attributable toowners of the parent

FYE March 2021 Forecast

754,000

15,00015,50012,500FYE March 2020 Actual

799,559

19,167

19,083

15,144

Change(5.7%)(21.7%)(18.8%)(17.5%)

b. Net Sales Forecast by Business Segment(Millions of yen)FYE March2020 Actual

FYE March
2021 Forecast

ChangeFunctional Materials

169,318

148,000(12.6%)

Advanced Materials & Processing

267,078

243,000(9.0%)

Electronics

115,123

84,500(26.6%)

Mobility & Energy

126,000

103,000(18.3%)

Life & Healthcare

121,545

175,000+44.0%

492

500

+1.5%

799,559754,000(5.7%)

Other
Total Sales－

4 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020

(2) Review of Financial Positiona. Summary of Consolidated Balance Sheets
As of the end of the current consolidated fiscal year, current assets amounted to ¥379.33 billion. This represents an increase of¥13.51 billion compared to the end of the prior consolidated fiscal year, mainly due to an increase in assets related to the newconsolidation of subsidiaries, despite decreases in notes and accounts receivable, inventories, etc. among existing Group
companies. Non-current assets amounted to ¥232.13 billion, up ¥30.62 billion from the end of the prior consolidated fiscal
year. This increase was mainly due to an increase of assets and the recording of goodwill and other intangible assets related to
the new consolidation of subsidiaries, despite a decrease in investments in securities stemming from the sale of certain shares
owned by the Company and lower fair values of shares owned. As a result, total assets increased ¥44.13 billion compared tothe end of the prior consolidated fiscal year to ¥611.47 billion.
Liabilities amounted to ¥298.23 billion, an increase of ¥43.49 billion compared to the end of the prior consolidated fiscal year.
This increase was mainly due to increases in commercial paper, long-term loans, and bonds.
Net assets amounted to ¥313.24 billion, up ¥630 million. While the Company recorded a decrease in net unrealized holding
gain on securities, profit attributable to owners of the parent amounted to ¥15.14 billion, which more than offset this decrease.
As a result, the Company recorded a shareholders’ equity ratio of 49.9%, down 4.3 points compared to the end of the priorconsolidated fiscal year.

b. Summary of Consolidated Cash Flows
Cash and cash equivalents (“Cash”) at the end of the current consolidated fiscal year increased ¥6.45 billion (+14.7%)
compared to the end of the prior consolidated fiscal year, amounting to ¥50.47 billion. Cash from operating activities amounted
to ¥33.07 billion, while Cash used in investing activities amounted to ¥49.2 billion, cash from financing activities amounted to¥24.33 billion, and exchange rate changes increased Cash as well.

(Cash Flows from Operating Activities)
Cash from operating activities for the current consolidated fiscal year amounted to ¥33.07 billion. While the Company
recorded ¥7.03 billion in income taxes paid, income before income taxes amounted to ¥24.2 billion and Cash from a decrease
in working capital amounted to ¥8.94 billion.

(Cash Flows from Investing Activities)
Cash used in investing activities for the current consolidated fiscal year amounted to ¥49.2 billion. This result was mainly due
to ¥44.69 billion from acquisition of subsidiary shares owing to changes in scope of consolidation and ¥12.37 billion inpurchases of tangible and intangible fixed assets, as opposed to ¥10.27 billion in proceeds from sales of investments insecurities.

(Cash Flows from Financing Activities)
Cash from financing activities for the current consolidated fiscal year amounted to ¥24.33 billion. This result was mainly due
to ¥25.45 billion in proceeds from long-term loans, ¥20.0 billion in proceeds from issuance of bonds, and a net increase of¥18.0 billion in commercial paper. These increases exceeded a ¥21.33 billion decrease in short-term loans and outlays of ¥10.0
billion in redemption of bonds.

－

5 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020

FYE March
2016

FYE March
2017

FYE March
2018

FYE March
2019

FYE March
2020

53.5%

54.7%

53.3%

54.2%

49.9%

30.7%

36.9%

39.7%

34.7%

25.9%

3.0

5.6

4.1

4.2

3.2

29.0

13.9

16.3

10.4

23.9

Shareholders’ equity ratio
Shareholders' equity ratio basedon market value
Interest-bearing debt to cash
flow ratio (years)
Interest coverage ratio (times)

Shareholders’ equity ratio: Equity capital/total assets
Shareholders' equity ratio based on market value: Market capitalization/total assets
Interest-bearing debt to cash flow ratio: Interest-bearing debt/operating cash flow
Interest coverage ratio: Operating cash flow/interest payments(Note 1) Indicators are calculated based on consolidated figures.
(Note 2) Market capitalization is calculated using the closing price at the end of the year multiplied by the number ofoutstanding shares at the end of the year (less treasury stock at cost).
(Note 3) Operating cash flow is net cash provided by operating activities as shown in the consolidated statements of cash
flows. Interest-bearing debt is all liabilities in the consolidated balance sheets for which interest is payable.
Interest payments are the amount of interest paid as presented in the consolidated statements of cash flows.

(3) Dividend Policy and Dividends for the Fiscal Years Ending March 2020 and 2021
Our basic policy is to continue paying a stable dividend to our shareholders in line with our consolidated results as we improve
our earnings power and management structure. We look to improve per-share dividends based on considerations of theconsolidated payout ratio and consolidated dividend to equity ratio. We also plan to use funds from internal reserves effectively
in our business growth and to build a stronger management function.
The NAGASE Group declared a year-end dividend of ¥22 per share based on this policy. As a result, the scheduled full-year
cash dividend including the interim dividend will amount to ¥44 per share, an increase of ¥2 per share from the prior year.
After a comprehensive consideration of our forecast earnings capacity (our present consolidated earnings forecasts adjusted forspecial circumstances) and of the stability and continuity of dividend payments , we forecast a full-year dividend of ¥44 pershare for the next fiscal year, the same as the current fiscal year. This dividend will consist of a ¥22 per share interim dividend
and a ¥22 per share year-end dividend.

2. Basic Policy on the Selection of Accounting Standards
The NAGASE Group intends to adopt Japanese accounting standards for the time being to allow for inter-company
comparability.
We have been studying the adoption of International Financial Reporting Standards (IFRS) for some time, and we plan to makethe appropriate policy choice in the future, considering external trends and other factors.

－

6 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020

3. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheets(Millions of yen)
Prior Consolidated Fiscal Year
(March 31, 2019)

Current Consolidated Fiscal Year
(March 31, 2020)

44,068230,459
74,471
1,847
4,683
10,651(355)
365,827

51,408221,116
86,166
1,789
7,730
11,859(732)
379,337

57,846(33,991)
23,85562,488(48,250)
14,23820,45623,940(16,022)
7,917
66,467

61,970(37,033)
24,937
63,667(50,063)
13,60421,09233,303(18,628)
14,67474,30923,866
10,6392,772
37,27935,246
9,064
28,286
72,597

90,263
243
109
2,290
4,959
(92)
97,771
201,518
567,346

76,124
391
1,754
2,085
4,967
(91)
85,232
232,139
611,477

ASSETS
Current assets
Cash and time deposits
Notes and accounts receivable
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Less allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures (net)
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles (net)
Land
Other
Accumulated depreciation
Other (net)Total property, plant and equipment
Intangible fixed assets
Goodwill
Technology-based assets
Other
Total intangible fixed assets
Investments and other assets
Investments in securities
Long-term loans receivable
Retirement benefit asset
Deferred tax assets
Other
Less allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets－

7 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020

(Millions of yen)
Prior Consolidated Fiscal Year
(March 31, 2019)

Current Consolidated Fiscal Year
(March 31, 2020)

117,256
34,964949
12,00010,000
3,594
5,355
287
17,457
201,866

108,285
30,5901,277
30,000
4,625
5,123
170
20,360200,434

10,00017,577
12,075
12,461757
52,870254,737

30,00042,621
9,280
13,6772,221
97,800298,234

9,699
10,647
247,617(5,070)262,892

9,699
10,646
257,067(5,071)
272,342

41,857
(7)
3,224
(292)
44,781
4,934
312,609567,346

32,618
3
1,051
(694)
32,9797,921
313,243
611,477

LIABILITIESCurrent liabilities
Notes and accounts payable
Short-term loans
Current portion of long-term loans
Commercial paper
Current portion of bonds
Accrued income taxes
Accrued bonuses for employees
Accrued bonuses for directors
Other
Total current liabilities
Long-term liabilities
Bonds
Long-term loans
Deferred tax liabilities
Retirement benefit liability
Other
Total long-term liabilities
Total liabilities
NET ASSETS
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized holding gain on securities
Deferred (loss) gain on hedges
Translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets－

8 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Millions of yen)
Prior Consolidated Fiscal Year
(April 1, 2018 March 31, 2019)

Current Consolidated Fiscal Year
(April 1, 2019 March 31, 2020)

807,755
702,313
105,441

799,559
694,657
104,901

12,696
23,644
3,289
275

12,787
26,491
2,967
147

4,088

4,975

1,698
24
(243)
1,815
32,92480,21525,226

1,545
22
281
2,037
34,47785,734
19,167

184
1,809
261
538
985
3,779

148
2,173
266
666
3,254

1,702
228
430
2,361
26,643

1,355
538
747
697
3,339
19,083

282
4,355
6
205
4,849

21
9,723
52
4
9,801

78
275
205
2,294
2
208
194
28
3,289
28,204
6,400
1,395
7,796
20,408271
20,136

46
204
3,116
1,028
288
4,684
24,200
7,395
1,288
8,684
15,515371
15,144

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Selling expenses
Employee salaries and allowances
Provision for accrued bonuses for employees
Provision for accrued bonuses for directors
Depreciation and amortization other than amortizationof goodwill
Retirement benefit expenses
Provision for retirement benefits for directors
Allowance for doubtful accounts
Amortization of goodwill
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Rent income
Equity in earnings of affiliates
Other
Total non-operating income
Non-operating expenses
Interest expenses
Equity in losses of affiliates
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on sales of shares of subsidiaries and affiliates
Subsidy income
Other
Total extraordinary gains
Extraordinary losses
Loss on sales of non-current assets
Loss on disposal of non-current assets
Loss on reduction of non-current assets
Impairment losses
Loss on sales of investment securities
Loss on valuation of investment securities
Loss on business withdrawal
Other
Total extraordinary losses
Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Profit attributable to non-controlling interests
Profit attributable to owners of the parent－

9 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020

(Consolidated Statements of Comprehensive Income)(Millions of yen)
Prior Consolidated Fiscal Year
(April 1, 2018 March 31, 2019)

Current Consolidated Fiscal Year
(April 1, 2019 March 31, 2020)

20,40815,515(8,907)
7298
25(9,231)11(1,973)
(402)

(29)

(339)

(8,604)
11,803(11,935)
3,579

11,640
163

3,380
199

Net income
Other comprehensive income
Net unrealized holding loss on securities
Deferred gain on hedges
Translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive loss of affiliates
accounted for by the equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:Shareholders of the parent
Non-controlling interests

－

10 －

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020

(3) Consolidated Statements of Changes in Shareholders’ Equity
Prior Consolidated Fiscal Year (April 1, 2018 to March 31, 2019)(Millions of yen)
Shareholders’ equity
Common stock
Balance, beginning of period

Capital surplus

9,699

Retained earnings

11,158Less treasury stock,at cost232,534

Total shareholders’equity(3,114)250,278

ChangesCash dividends(5,133)(5,133)

Profit attributable to ownersof the parent

20,136

20,136

Purchases of treasury stock(1,956)Equity transactions with
non-controlling interests(1,956)(500)

Changes in scope of
consolidation
Changes other thanshareholders’ equity
accounts (net)Total changes
Balance, end of period

(500)

(11)

79

68

-

(511)

15,082(1,956)

12,614

9,699

10,647

247,617(5,070)262,892

Accumulated other comprehensive income

Balance, beginning of period

Net unrealized
holding gain on
securities

Deferred loss onhedgesTranslation
adjustments

Remeasurementsof defined benefit
plans

50,773

(15)

2,917

(317)

Total
Non-controlling
Total net assets
accumulated
interests
othercomprehensive
income53,3585,168

308,804

ChangesCash dividends(5,133)

Profit attributable to ownersof the parent

20,136

Purchases of treasury stock(1,956)Equity transactions with
non-controlling interests(500)

Changes in scope of
consolidation
Changes other thanshareholders’ equity
accounts (net)

68(8,916)

7

307

25

(8,576)(233)(8,810)Total changes(8,916)

7

307

25

(8,576)

(233)

3,804

Balance, end of period

41,857

(7)

3,224

(292)

44,781

4,934

312,609－

11 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020

Current Consolidated Fiscal Year (April 1, 2019 to March 31, 2020)(Millions of yen)
Shareholders’ equity
Common stock
Balance, beginning of period

Capital surplus

9,699

Retained earnings

10,647Less treasury stock, at
cost

247,617

Total shareholders’equity(5,070)262,892

ChangesCash dividends(5,704)(5,704)

Profit attributable to ownersof the parent

15,144

15,144Purchases of treasury stock(0)

Equity transactions with
non-controlling interests

(0)

(0)

(0)

Changes in scope of
consolidation

(93)

(93)

Changes in scope of equity
affiliates

103

103

Changes other thanshareholders’ equity
accounts (net)Total changes
Balance, end of period

-

(0)

9,450

(0)

9,449

9,699

10,646

257,067(5,071)

272,342

Accumulated other comprehensive income

Balance, beginning of period

Net unrealized
holding gain on
securities

Deferred gain on
hedgesTranslation
adjustments

Remeasurementsof defined benefit
plans

41,857

(7)

3,224

(292)

Total
Non-controlling
Total net assets
accumulated
interests
othercomprehensive
income44,781

4,934

312,609

ChangesCash dividends(5,704)

Profit attributable to ownersof the parent

15,144Purchases of treasury stock(0)

Equity transactions with
non-controlling interests(0)

Changes in scope of
consolidation(93)

Changes in scope of equity
affiliates

103

Changes other thanshareholders’ equity
accounts (net)(9,238)11(2,172)(402)(11,802)

2,986(8,815)

Total changes(9,238)11(2,172)(402)(11,802)

2,986

634

Balance, end of period

32,618

3

1,051

(694)

32,9797,921

313,243－

12 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020

(4) Consolidated Statements of Cash Flows(Millions of yen)
Current Consolidated
Fiscal Year
(April 1, 2019 March 31, 2020)

Prior Consolidated
Fiscal Year
(April 1, 2018 March 31, 2019)
Operating Activities
Income before income taxes
Depreciation and amortization other than amortization of
goodwill
Loss on impairment of fixed assets
Amortization of goodwill
Subsidy income
Loss on reduction of non-current assets
Loss on business withdrawal(Decrease) increase in retirement benefit liability
Increase in retirement benefit asset
Interest and dividend income
Interest expenses
Exchange loss (gain), net
Gain on sales of investment securities, investments in capital,
shares of subsidiaries and affiliates, and investments in capital ofsubsidiaries and affiliates, net(Increase) decrease in notes and accounts receivable(Increase) decrease in inventories
Decrease in notes and accounts payable
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities
Investing activities
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of intangible fixed assets included in other assets
Purchases of investments in securities
Proceeds from sales of investments in securities
Purchases of investments in capital
Purchases of shares of subsidiaries resulting in change in scopeof consolidation(Increase) decrease on short-term loans receivable included inother current assets, net
Decrease (increase) in time deposits, net
Proceeds from subsidy income
Other
Net cash used in investing activities

－

13 －

28,20424,2009,329

10,089

2,294
1,815
(205)
205
194
(2,023)(109)(1,994)
1,702
295

3,116
2,037
(52)
645
(1,645)(2,322)
1,355
(121)

(4,359)(9,723)(4,477)(7,157)(894)(1,421)
21,3992,520(1,670)(4,874)
17,375

19,452
3,187(13,689)
2,244
38,773
2,714(1,382)(7,031)33,074(10,253)917(505)(2,555)
5,479(96)(11,909)87(464)(1,635)
10,278(54)-(44,691)

(807)

404

392
205
(102)
(7,325)

(887)
52
(388)
(49,208)

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020

(Millions of yen)
Current Consolidated
Fiscal Year
(April 1, 2019 March 31, 2020)

Prior Consolidated
Fiscal Year
(April 1, 2018 March 31, 2019)
Financing activities
Increase (decrease) in short-term loans, net
Increase in commercial paper, net
Proceeds from long-term loans
Repayments of long-term loans
Proceeds from issuance of bonds
Redemption of bonds
Purchase of treasury stock
Cash dividends paid
Cash dividends paid to non-controlling interests
Payments from changes in ownership interests in subsidiaries
that do not result in change in scope of consolidation
Other
Net cash (used in) provided by financing activities
Effects of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Decrease in cash and cash equivalents resulting from exclusion ofsubsidiaries from consolidation
Increase in cash and cash equivalents resulting from inclusion ofsubsidiaries in consolidation
Cash and cash equivalents, at end of the period

－

14 －

2,771
7,000
582
(11,175)(1,956)(5,133)(398)(21,332)
18,00025,454(1,131)
20,000(10,000)
0(5,704)
(219)

(498)

-

(99)
(8,909)100
1,240
42,857(730)
24,334(1,882)
6,317
44,017

(80)

-

-

136

44,01750,471

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020

(5) Notes Related to Consolidated Financial Statements(Assumption for Going Concern)
No matters to report.

(Changes in Significant Subsidiaries During the Period)
The Company established Nagase Holdings America Corporation in the U.S. on April 1, 2019, including Nagase Holdings
America Corporation within the scope of consolidation from the current consolidated fiscal year. Subsequently, the Company
made a capital increase in Nagase Holdings America Corporation on August 2, 2019, making it a specified subsidiary.

(Changes in Accounting Policies)
Beginning in the current consolidated fiscal year, the Company has applied IFRS 16 Leases for overseas consolidated
subsidiaries that have adopted International Financial Reporting Standards. The impact of this accounting standard on
consolidated financial statements is minor.

(Segment Information, etc.)
a. Segment Information
1. Reportable Segments
The Company’s reportable segments are those units comprising the NAGASE Group for which separate financial
information is available and for which the board of directors makes regular decisions regarding resource allocation andoperating performance.
The Company classifies reportable segments according to the location of the business in the value chain and the market(s)targeted. Accordingly, the Company has defined five segment categories: Functional Materials (located at the top of thevalue chain), Advanced Materials & Processing (located in the next stage of the value chain), Electronics, Mobility &Energy, and Life & Healthcare (these last three segments functioning across all industries).
As of the current consolidated fiscal year, the name of the former Automotive & Energy Segment has been changed to the
Mobility & Energy Segment.
The following describes the major products and services handled by each reportable segment.
The Functional Materials segment is engaged in the sales of materials for paints/inks, urethane materials and auxiliarymaterials, plastic materials, plastic additives, industrial oil solutions, water processing raw materials, surfactant raw
materials, fluorochemicals, encapsulant materials, 5G materials, silicone materials, environmental products, and more for thepaints/inks, resins, urethane foam, organic synthesis, surfactants, semiconductor, communications equipment, water
processing, metalworking, and other industries.
The Advanced Materials & Processing segment is engaged in the sales of dyestuffs, pigments, functional pigments, digitalprint processing products, 3D printing products, thermoplastic resins, thermosetting resins, automobile refinish paints,
conductive coatings, synthetic rubber, inorganic materials, plastics products, resin molding tools/dies, and more for thepigment/additive, digital print processing material, fiber processing, raw resin material, resin molding, 3D printing,functional film and sheet, construction, and other industries.
The Electronics segment is engaged in the sales of high-function epoxy resins, semiconductor assembly materials anddevices, electronic precision abrasives, pre-processing materials and devices for semiconductors and LCDs, lowtemperature/vacuum equipment, display panel components, LEDs, and more for the heavy electrical, semiconductor, harddisk drive, electronic components, on-board equipment, display, touch panel, and other industries.
The Mobility & Energy segment is engaged in the sales of plastic products in general, silicone materials, functional coatings,
structural materials, resin molding tools and dies, interior and exterior materials and components, decorative films andcomponents, on-board display components, EV/HEV components, sensor components, solar cells, secondary battery－

15 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020

components, and more for the mobility, mobility-related, storage battery, and energy industries.
The Life & Healthcare segment is engaged in the sales of pharmaceutical/agricultural chemicals and materials, research
products, in vitro diagnostics, enzymes, food additives, food ingredients, sports nutrition products, nutrient premixes,
additives for cosmetics, feeds, and surfactants for the pharmaceutical, food and beverage, cosmetics, agricultural, toiletries,
and health care industries. The segment offers radiation measurement as one of its main services. In addition, this segment
sells cosmetics, health foods, and beauty foods directly to consumers.

2. Net Sales, Profit (Loss), Assets, Liabilities, and Other by Segment
Accounting treatment in each reportable segment follows the principles and procedures of the accounting treatments used toprepare the Company’s consolidated financial statements.
Profit in reportable segments is defined as operating income. Inter-segment profits and transfers are based on actual market
prices.

－16 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020

3. Information related to Net Sales, Profit (Loss), Assets, Liabilities, and Other by Segment
Prior Consolidated Fiscal Year (April 1, 2018 to March 31, 2019)(Millions of yen)
Reportable Segments
Advanced
Functional
Mobility &Life &
Materials & Electronics
Materials
EnergyHealthcare
Processing

Total

Others(Note 1)

Total

Corporate Adjustments Consolidated(Note 2)
(Note 3)(Note 4)

Net sales
Sales tocustomers

179,627

275,203

122,319

139,235

90,794807,181574

807,755--

807,755

Intersegment
sales/transfers

2,992

2,357

1,749

2,773

399

10,272

5,459

15,731-(15,731)-

Total

182,620

277,561

124,069

142,009

91,194

817,454

6,033

823,487-(15,731)

807,755

Segment income(loss)

5,494

8,093

7,400

3,051

4,648

28,689284

28,973(4,253)505

25,226

Segment assets

87,158135,403

65,02256,747

97,627441,960

4,833

446,794

141,205(20,653)

567,346

Depreciation
and amortization

444

692

2,511

211

3,801

7,660

211

7,872

1,457

-

9,329

Amortization of
goodwill

110

-

136

-

1,569

1,815

-

1,815

-

-

1,815

Unamortizedbalance of
goodwill

2,012

-

1,218

-

20,63623,866-23,866--23,866

Investments inequity affiliates

2,398

1,545

3,765

1,253

2,769

11,733-

11,733-(52)

11,680

Increase inproperty, plant,
and equipment
and intangible
fixed assets

314

1,542

3,201

329

3,206

8,594

130

8,725

1,887

-

10,612Other items(Note) 1. “Others” is a business segment consisting of businesses not included in Reportable Segments, and includes logistics
services, information processing services, and professional services.
2. Corporate segment income (loss) represents expenses not allocated to Reportable Segments or Others. Segment assets
under Corporate are assets not allocable to Reportable Segments or Others.
3. Adjustments are eliminations of intersegment transactions.
4. The sum of segment income (loss) Total, Corporate, and Adjustments is equivalent to operating profit as presented in“Consolidated”.

－

17 －

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020

Current Consolidated Fiscal Year (April 1, 2019 to March 31, 2020)(Millions of yen)
Reportable Segments
Advanced
Functional
Mobility &Life &
Materials & Electronics
Materials
EnergyHealthcare
Processing

Total

Others(Note 1)

Total

Corporate Adjustments Consolidated(Note 2)
(Note 3)(Note 4)

Net sales
Sales tocustomers

169,318

267,078

115,123

126,000

121,545799,066492

799,559--

799,559

Intersegment
sales/transfers

1,867

2,180

1,816

2,849

480

9,194

5,374

14,568-(14,568)-

Total

171,186

269,259

116,940

128,849

122,025

808,260

5,867

814,128-(14,568)

799,559

Segment income(loss)

5,364

8,526

5,396

1,890

3,973

25,151

180

25,331(6,603)439

19,167

Segment assets

76,936

135,541

58,87948,687

171,461

491,506

4,699

496,205

152,181(36,909)611,477

Depreciation
and amortization

413

754

2,372

204

4,571

8,316

208

8,525

1,563

-

10,089Amortization of
goodwill

107

-

132

-

1,796

2,037

-

2,037

-

-

2,037

Unamortizedbalance of
goodwill

1,864

2,962

484

-

29,93535,246-35,246--35,246

Investments inequity affiliates

1,895

1,722

3,906

1,242

3,064

11,831-

11,831-(2)

11,829

Increase inproperty, plant,
and equipment
and intangible
fixed assets

436

1,845

3,235

241

6,035

11,79424

11,8181,010-

12,829Other items(Note) 1. “Others” is a business segment consisting of businesses not included in Reportable Segments, and includes logistics
services, information processing services, and professional services.
2. Corporate segment income (loss) represents expenses not allocated to Reportable Segments or Others. Segment assets
under Corporate are assets not allocable to Reportable Segments or Others.
3. Adjustments are eliminations of intersegment transactions.
4. The sum of segment income (loss) Total, Corporate, and Adjustments is equivalent to operating profit as presented in“Consolidated”.

－

18 －

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020

b. Other Information
Prior Consolidated Fiscal Year (April 1, 2018 to March 31, 2019)
1. Products and Services
Omitted, as the same information has been disclosed under Segment Information.

2. Geographical Information(1) Net sales(Millions of yen)
Japan

Greater China

412,617

ASEAN

205,408

Americas118,11339,451

Europe15,272

Other

Total

16,892807,755(Note) 1. Net sales are categorized by country or region, according to the location of the customer.
2. Countries/regions are determined by geographical proximity.
3. Major countries in each region(1) Greater China......China, Hong Kong, Taiwan(2) ASEAN................Thailand, Singapore(3) Americas..............U.S., Mexico(4) Europe.................Germany(5) Other....................Korea(2) Property, plant and equipment(Millions of yen)
Japan

Other
60,344

Total
6,123

3. Major Customers
Information not presented here, since no single customer accounts for 10% or more of consolidated net sales.

－

19 －

66,467

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020

Current Consolidated Fiscal Year (April 1, 2019 to March 31, 2020)
1. Products and Services
Omitted, as the same information has been disclosed under Segment Information.

2. Geographical Information(1) Net sales(Millions of yen)
Japan

Greater China

402,390

ASEAN

187,554

Americas110,642

55,420Europe24,610

Other

Total

18,939799,559(Note) 1. Net sales are categorized by country or region, according to the location of the customer.
2. Countries/regions are determined by geographical proximity.
3. Major countries in each region(1) Greater China......China, Hong Kong, Taiwan(2) ASEAN................Thailand, Vietnam(3) Americas..............U.S., Mexico(4) Europe.................Germany(5) Other....................Korea(2) Property, plant and equipment(Millions of yen)
Japan

Other
64,301

Total
10,0083. Major Customers
Information not presented here, since no single customer accounts for 10% or more of consolidated net sales.

－

20 －

74,309

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020c. Impairment Losses of Non-Current Assets for Each Reportable Segment
Prior Consolidated Fiscal Year (April 1, 2018 to March 31, 2019)(Millions of yen)
Reportable Segments
Advanced
Mobility &Life &
Functional
Materials & Electronics
EnergyHealthcare
Materials
Processing
Impairment
loss

-

221

-

58

1,999

Total

Corporate/
Elimination

Others

2,279

-

Total

15

2,294

(Note) The Life & Healthcare segment recorded impairment loss of ¥1,999 million for business assets related to a pharmaceuticalmanufacturing business due to decreasing profitability. The Company wrote down the book value of these assets to theirrecoverable amounts.

Current Consolidated Fiscal Year (April 1, 2019 to March 31, 2020)(Millions of yen)
Reportable Segments
Advanced
Functional
Mobility &Life &
Materials & Electronics
Materials
EnergyHealthcare
Processing
Impairment
loss

-

-

2,209

2

903

Total
3,114

Corporate/
Elimination

Others

-

Total

2

3,116

(Note) In the Electronics segment, as a result of worsening profitability of the thin processing business for glass substrate, the bookvalues of related business assets were written down to their recoverable amounts. Thus, the Company recorded a ¥1,639
million loss on impairment of fixed assets. Also in this segment, with respect to goodwill related to our siloxane materials
production and development business, the Company has made progress strengthening the foundation of development of opticalcomponent materials for the wearables market, but the financial results have not been as good as projected in the initialbusiness plan. The Company wrote down the book value of these assets to their recoverable amounts, recording a ¥570 million
loss on impairment of goodwill.
The Life & Healthcare segment recorded impairment loss of ¥903 million for business assets related to a pharmaceuticalmanufacturing business due to decreasing profitability. The Company wrote down the book value of these assets to theirrecoverable amounts.

－

21 －

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Fiscal Year Ended March 31, 2020

d. Amortization and Unamortized Balance of Goodwill for Each Reportable Segment
Prior Consolidated Fiscal Year (April 1, 2018 to March 31, 2019)
Omitted, as the same information has been disclosed under Segment Information.

Current Consolidated Fiscal Year (April 1, 2019 to March 31, 2020)
Omitted, as the same information has been disclosed under Segment Information.

e. Information About Gain on Negative Goodwill for Each Reportable Segment
Prior Consolidated Fiscal Year (April 1, 2018 to March 31, 2019)
No matters to report.

Current Consolidated Fiscal Year (April 1, 2019 to March 31, 2020)
No matters to report.

(Per-Share Data)
Prior Consolidated Fiscal Year
(April 1, 2018 March 31, 2019)

Current Consolidated Fiscal Year
(April 1, 2019 March 31, 2020)

Net assets per share¥2,481.01¥2,462.04

Earnings per share¥161.30¥122.12(Note) 1. Information for diluted earnings per share is not presented, as the Company does not issue any stock with dilutive effects.
2. Basic earnings per share calculations are as shown below.
Prior Consolidated Fiscal Year
(April 1, 2018 March 31, 2019)

Current Consolidated Fiscal Year
(April 1, 2019 March 31, 2020)

20,13615,144

20,13615,144

124,842,824

124,011,793

Profit attributable to owners of the parent (millions of yen)
Profit attributable to common stock owners of the parent(millions of yen)
Average number of outstanding shares of common stock(shares)(Significant Subsequent Events)
No matters to report.

－

22 －