FYE March 2018
Second Quarter
Financial Highlights
NAGASE & CO., LTD.
November 2, 2017

Copyright © 2017 NAGASE & CO., LTD.

AgendaConsolidated Statements of Income

3

Net Sales by Region (Domestic, Overseas)

4

Net Sales: Two‐Year Comparison (by Segment)

5

Operating Income: Two‐Year Comparison (by Segment)

6

Consolidated Balance Sheets

7

Consolidated Cash Flows8

FYE March 2018 Earnings Projections

9

Copyright © 2017 NAGASE & CO., LTD.

Consolidated Statements of Income
NAGASE achieved record highs for sales and all profit for the cumulative consolidated second quarter■Net sales: Higher, mainly due to strong sales in all segments and the lower valuation of the yen■Operating income: Higher, mainly due to operating profit growth and lower amortization of retirement
benefit accounting actuarial differences(100 millions of yen)

16/09

17/09

ChangeOrig. Forecast(full year)

Vs. PYNet sales

3,508

3,875＋366

110%

7,320

Gross profit

446

502

＋55112%950<GP ratio>

12.7％

13.0%

＋0.2％

－13.0%

SG&A expenses

374

376＋1100%

759

Operating income

72

126＋53174%

191

Ordinary income

74138＋63184%

209

Profit attributable toowners of the parent

4687＋40187%

125

US$ Exchange rate
(period average)@105.3@111.0@5.8devaluation@108

RMB Exchange rate
(period average)

@15.9

@16.4

@0.5devaluation@15.6【 Foreign exchange rate impact on17/09 net sales and operating income results 】
Net sales:＋¥10 billion (approx.)
Operating income: ＋¥280 million (approx.)

Copyright © 2017 NAGASE & CO., LTD.

3

Net Sales by Region (Domestic, Overseas)■Higher sales in Japan and every region overseas (overseas ratio of total sales 50.3%)
Domestic & Overseas Sales (100 millions of yen, %)Overseas Sales by Region (100 millions of yen, %)Greater China

Domestic(Left axis)

Overseas(Left axis)

Oversales Net sales（Right axis）

1,718
49.0%

50.3%
50%

3,500

1,500

3,000

1,949

74
52
140

EuropeOther

99 (V:133%)
73 (V:140%)170 (V:121%)

536

40%

1,718

489

(V:110%)(V:86%)

30%

2,000
1,500
1,000

Americas

1,949

2,000

4,000

2,500

ASEAN

1,000

20%

1,790

500

1,925

960

10%

(V:88%)

5000%

016/09Copyright © 2017 NAGASE & CO., LTD.

17/09

1,068
(V:111%)(V:88%)

0

16/09

17/09

V:Vs 16/09

4

Net Sales: Two‐Year Comparison (by Segment)■Functional Materials: Higher sales, mainly due to improved sales of coating raw materials and urethane materials

associated with higher production of automobiles in Japan and overseas, improved sales of raw materials forindustrial oil solutions, and the impact of acquisition of Fitz Chem Corporation (U.S. specialty chemicals
distributor)■Advanced Materials & Processing: Higher sales mainly due to increase in sales of plastics in Japan and overseas
Net Sales by Segment (100 millions of yen)
Functional Materials

Advanced Materials & Processing

Electronics

Automotive & EnergyLife & Healthcare

Others

3,875

4,000

3,508

3,500

421

412
627

3,000
524
2,500

657
625

2,000
1,500

1,318
1,202

1,000500

741

847

16/09

17/09

05Copyright © 2017 NAGASE & CO., LTD.

Operating income: Two‐Year Comparison (by Segment)■In addition to higher sales among all segments, growth of manufacturing subsidiaries in Electronics, Advanced

Materials & Processing, and other segments also had a positive impact.
■In addition to the preceding, lower amortization of retirement benefit accounting actuarial differences for theOthers/Corporate segment resulted in overall increase in operating income of ¥5.3 billion.
Net Sales by Segment (100 millions of yen)
Functional Materials

Advanced Materials & Processing

Electronics

Automotive & EnergyLife & Healthcare

150

126

130

23

110

72

90

18570

Others/Corporate

1443

31
50

35

30

26

1018(10)
(30)

- 28
16/09
1Copyright © 2017 NAGASE & CO., LTD.

26
- 17
17/09
26

Consolidated Balance Sheets■Assets: Increase of ¥48.6 billion, mainly due to increases in accounts receivable and inventories, as well as rising investments in securities due togains in fair market prices■Net assets: Increase of ¥13.9 billion, mainly due to profit attributable to owners of the parent of ¥8.7 billion and increase in net unrealized holding
gain on securities■Shareholders’ Equity Ratio down 2.2 points to 52.5%
AssetsLiabilities and Net Assets (100 millions of yen)
17/03
Total current assets
Cash and time deposits
Notes and accounts receivable
Inventories
Other
Total non‐current assets
Property, plant and equipment
Intangible fixed assets

17/09

Change

17/03

17/09

Change3,212

3,577＋365

Total current liabilities

1,664

1,912＋247

398

442＋43

Notes and accounts payable

1,020

1,195＋174

416

473＋562,068

2,315＋247

Short‐term loans andCurrent portion of bonds

631

708＋77

Other

227

244＋16114

110‐3

Total long‐term liabilities

690

790＋992,095

2,217＋121

Long‐term loans and Bonds

400

464＋63676

684＋8

Net defined benefit liability

146

145

‐1434＋27

Other(Deferred tax liabilities, etc.)143

180＋36407
1,011

1,098＋86

Total liabilities

2,355

2,702＋347Investments in securities

945

1,034＋89

Total net assets

2,951

3,091＋139

Other

66

63‐3

Shareholders’equity

2,396

2,458＋61

Accumulated other comprehensive income

505582＋76

Net unrealized holding gain on securities

476

538＋61

Investments, other assets

Total assets

5,307＋486

5,794Translation adjustment

3145＋14

Other‐2‐1＋1Non‐controlling interests

4951＋1

Total liabilities and net assets

5,307

5,794＋486

7

Copyright © 2017 NAGASE & CO., LTD.

Consolidated Cash Flows■Cash and cash equivalents up ¥4.0 billion, cash flows from operating activities of ¥6.5 billion (¥13.0 billion in profit before income taxes), frominvesting activities of ¥10.2 billion (¥6.0 billion in purchase of shares of subsidiaries resulting in a change in scope of consolidation), from financing
activities of ¥7.3 billion (increase of ¥13.2 billion in net borrowings, decrease of ¥10.0 billion in redemption of bonds), and the impact of translationdifferences

Cash Flows
17/09

Net cash provided by (used in) operating activities

Net cash provided by (used in) investing activities(100 millions of yen)
Main breakdown

16/09

Profit before income taxes ＋130
Depreciation and amortization/amortization of goodwill＋54
Working capital ‐ 117
Income tax paid ‐ 2547

Purchases of property, plant and equipment ‐ 34
Purchases of intangible fixed assets ‐ 1‐102 Purchases of investment in securities ‐3
Purchase of shares of subsidiaries resulting in change in scope ofconsolidation ‐ 60‐ 5265

Net cash provided by (used in) financing activities

Net increase in short‐term loans payable＋90
Net increase in commercial papers＋70
73 Long‐term loans(net payment/proceeds)＋41Redemption of bonds ‐ 100
Cash dividends paid – 21‐ 23

Effects of exchange rate changes on cash and cashequivalents

4‐ 20

Net increase (decrease) in cash and cash equivalents

40

‐ 48

Cash and cash equivalents at beginning of the year

397

Japan 254 ,Greater China 70 , ASEAN 35, Europe18 , Americas 5 ,Other 13429

Cash and cash equivalents, at end of the period

438Japan 262 ,Greater China 77, ASEAN 44 , Europe23 , Americas 11,
Other 13380

Copyright © 2017 NAGASE & CO., LTD.

8FYE March 2018 Earnings Projections
Forecast calls for record high sales and profits■Net sales: Higher , mainly due to overall continued strength, despite slowing expected in some businesses■Operating income: Higher, mainly due to higher sales and an expectation of ¥300 million in amortization of retirement
benefit accounting actuarial differences (vs. income statement impact of +2.8 billion in the prior year).
(100 millions of yen)

17/03

18/03

Actual（A）

Previous Full Year
Forecast （B）

Revised Full Year
Forecast（C）

Change（C‐A）

Vs. PY（C/A）

Net sales

7,223

7,320

7,710＋486

107%

Operating income150191

235＋84156%

Ordinary income163

209

255＋91156%

Profit attributable toowners of theparent

103

125160＋56155%

US$ Exchange rate
(period average)@108.4@108.0@111.0@2.7―

RMB Exchange rate
(period average)

@16.1

@15.6

@16.4

devaluation@0.3
devaluation

Copyright © 2017 NAGASE & CO., LTD.

9https://www.nagase.co.jp/english/

These presentation materials contain forward‐looking projections based on assumptions, forecasts, andplans as of November 2 , 2017. Actual earnings may differ from projections due to risks and uncertainties inthe future global economy, competitive landscape, currency exchange rates, etc.

Copyright © 2017 NAGASE & CO., LTD.

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