Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2021
<Under Japanese GAAP>
August 4, 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 (https://www.nagase.co.jp/english/)Representative:
Kenji Asakura, Representative Director and President
Contact:
Yoshihisa Shimizu, Executive Officer, General Manager, Finance & Accounting Division+81-3-3665-3103
TEL:
Filing of quarterly report (scheduled): August 13, 2020
Start of distribution of dividends (scheduled): Supplementary documents of quarterly financial results: Yes
Quarterly investors' meeting: No(Note: Amounts have been rounded down to the nearest million yen.)

1. Consolidated Results for the First Quarter of the Fiscal Year Ending March 31, 2021
(April 1, 2020 to June 30, 2020)(1) Consolidated Operating Results
Net sales
For the first quarter ended
June 30, 2020
June 30, 2019
(Notes) Comprehensive income

Operating income

Millions of yen%

180,569
192,986(6.4)

Millions of yen(% = year-on-year change)

Profit attributable toowners of the parent

Ordinary income%

Millions of yen%

Millions of yen

3,673 (30.1)
4,237 (27.5)(2.8)
5,257 (24.2)
5,848 (23.5)
First quarter ended June 30, 2020: ¥11,850 million (―%)

%

6,807
63.8
4,156 (24.4)

First quarter ended June 30, 2019: (¥52) million (―%)
Earnings per share
For the first quarter ended
June 30, 2020
June 30, 2019

Yen

54.90
33.51

Earnings per share (diluted)Yen(2) Consolidated Financial Position
Total assets

Shareholders’equity ratio

Net assets

Millions of yen

Millions of yen

599,942
611,477

322,364
313,243
As of June 30, 2020: ¥ 314,379 million
As of March 31, 2020: ¥ 305,322 million

June 30, 2020
March 31, 2020
(Reference) Equity capital

Net assets per share
%

Yen

52.4
49.9

2,535.08
2,462.04

2. Dividends
1Q
For the year ended (or ending)YenMarch 2020March 2021
March 2021 (forecast)(Note) Revisions to the latest dividends forecast: No

2Q

Annual Dividends per Share
3Q
Fiscal year end

Annual

Yen

Yen

Yen

Yen

22.00



22.00

44.00

22.00



22.00

44.00

3. Consolidated Earnings Forecast 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

754,000

Operating income% Millions of yen(5.7)

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

%

Yen

(17.5)

100.80(Note) Revisions to the latest consolidated earnings forecast: No
Our consolidated earnings forecast for the fiscal year ending March 2021 is based on the assumption that the economy will
gradually recover from the impact of the COVID-19 pandemic in the second half.

* Notes(1) Changes in major subsidiaries during the period (changes in specified subsidiaries accompanying changes in thescope of consolidation): No)
Excluded: ― (Company name:)
New: ― (Company name:(2) Application of special accounting methods to the preparation of quarterly financial statements: No(3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial
statements after error correctionsi.
Changes in accordance with revisions to accounting and other standards: No
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(4) Number of shares issued and outstanding (common stock)i.
Number of shares issued and outstanding as of the fiscal period end (including treasury stock)June 30, 2020
127,408,285 shares March 31, 2020
127,408,285 shares
ii.

iii.

Number of treasury stock as of the fiscal period end
June 30, 2020
3,396,800 shares

March 31, 2020

3,396,695 shares

Average number of shares during the period
June 30, 2020
124,011,553 shares

June 30, 2019

124,011,911 shares* Quarterly financial statements are not subject to quarterly review.
* 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. Qualitative Information (3) Qualitative Information Related to Consolidated Earnings Forecasts on P.4of this document.

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2021

Attachments
1. Qualitative Information

2(1) Business Performance2(2) Financial Position

3(3) Qualitative Information Related to Consolidated Earnings Forecasts

4

2. Quarterly Consolidated Financial Statements and Notes

5(1) Quarterly Consolidated Balance Sheets

5(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income

7

Quarterly Consolidated Statements of Income

7

Quarterly Consolidated Statements of Comprehensive Income

8(3) Notes Related to Quarterly Consolidated Financial Statements

9(Assumption for Going Concern)

9(Significant Fluctuations in Shareholders’ Equity)

9(Additional Information)

9(Segment Information, etc.)

10

3. Supplementary Information

11(1) Overseas Sales

11

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1

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NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2021

1. Qualitative Information(1) Business Performancea. General Summary of Results
The global economy for the current consolidated first quarter deteriorated rapidly since the economic activities in every country
were suppressed due to the global spread of COVID-19. In the regions where the NAGASE Group operates our business, theeconomic activities in the Americas, Europe, and ASEAN are still stalled, except for Greater China, where the economic activities
are gradually being reopened. The Japanese economy also deteriorated rapidly mainly due to stagnant consumption andsignificant decline of export.
In this environment, the Company recorded domestic sales of ¥82.17 billion (-19.2% year on year) for the current consolidated
first quarter. Overseas sales amounted to ¥98.39 billion (+7.8%). In spite of the addition of sales from the Prinova Group acquiredby the Company in the prior consolidated second quarter, the Company recorded net sales of ¥180.56 billion (-6.4%) in total due
to a significant decrease among existing Group companies.
The Company recorded gross profit of ¥26.05 billion (+2.6%), as a result of the high profitability of the Prinova Group exceeding
the impact of the Company's sales decrease. Despite the contribution of the Prinova Group, operating income amounted to ¥3.67
billion (-30.1%) and ordinary income ¥4.23 billion (-27.5%) mainly due to decreased income in existing Group companies andincreased investment costs of promoting the digital transformation (DX) for medium- and long-term growth. Profit attributableto owners of the parent amounted to ¥6.8 billion (+63.8%) mainly due to the recording of profits stemming from the sales ofcertain shares owned by the Company.

b. Segment Summary
Functional Materials
The Functional Materials segment recorded lower sales in both domestic and overseas markets mainly due to lower automotive
production in Japan and overseas attributable to the impact of the COVID-19 pandemic.
The Performance Chemicals business recorded materially lower sales due to lower sales in coating raw materials and urethanematerials, as a result of lower automotive production in Japan and overseas.
The Speciality Chemicals business recorded lower sales overall due to decreased sales of industrial oil solutions and plastic
materials arising from the impact of the weak automotive industry, although the sales of electronics chemicals for thesemiconductor and other related electronics industries decreased only slightly.
As a result, sales for the segment amounted to ¥34.36 billion, representing a ¥9.23 billion (-21.2%) decrease compared to thesame period in the prior fiscal year. Operating income fell ¥580 million (-39.1%) to ¥910 million compared to the consolidated
first quarter of the prior fiscal year.

Advanced Materials & Processing
The Advanced Materials & Processing segment recorded lower sales in both domestic and overseas markets due to the broad
impact of the COVID-19 on the resins and other businesses.
The Colors & Advanced Processing business recorded lower sales overall, due to decreased sales of dyes and additives, digitalprint processing materials, and plastic resins for industrial and packaging applications and conductive materials in Japan.
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 ¥58.23 billion, representing a ¥9.15 billion (-13.6%) decrease compared to thesame period in the prior fiscal year. Operating income fell ¥560 million (-28.0%) to ¥1.46 billion.

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NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2021

Electronics
Despite increased sales of precision processing-related materials used in connection with intermediate processing insemiconductors, the Electronics segment recorded lower net sales overall driven by lower sales of materials related to thephotolithography, formulated epoxy resins for the heavy and light electrical equipment industry, equipment, and display.
As a result, sales for the segment amounted to ¥26.06 billion, which was a ¥550 million (-2.1%) decrease year on year. Operating
income was ¥1.73 billion, an increase of ¥450 million (+36.1%) year on year, mainly due to improved profitability among theCompany’s manufacturing subsidiaries.

Mobility & Energy
The Mobility Solutions business recorded significantly lower sales both in Japan and overseas, due to lower sales of car
electronics-related products in Japan and lower sales in the resins business both in Japan and overseas as a result of lower
automotive production in Japan and overseas attributable to the impact of the COVID-19 pandemic.
As a result, sales for the segment amounted to ¥18.97 billion, representing a ¥13.57 billion (-41.7%) decrease year on year.
Operating loss was ¥160 million, a decrease of ¥690 million from operating income of ¥520 million in the same period of theprevious year.

Life & Healthcare
The Life & Healthcare segment recorded significantly higher sales overall, due to higher sales overseas driven by the additionof sales from the Prinova Group acquired by the Company in the prior consolidated second quarter, though domestic sales
decreased mainly due to lower demand attributable to the impact of the COVID-19 pandemic.
The new Food Ingredients business recorded significantly higher sales overall, due to higher sales of TREHA™ and otherproducts overseas in the food materials field, despite a decline in their domestic sales, as well as the addition of sales from thePrinova Group.
The Life & Healthcare business recorded lower sales overall, due to lower sales of the pharmaceutical business, despite higher
sales of pharmaceutical raw materials and intermediates and medical materials, in the medical and pharmaceutical field and lower
sales in Japan and overseas of AA2G™ in the skin care and toiletries field.
As a result, sales for the segment amounted to ¥42.82 billion, which was a ¥20.13 billion (+88.7%) increase compared to theconsolidated first quarter of the prior fiscal year. Operating income decreased ¥0 million (-0.2%) to ¥1.39 billion, mainly due toweaker profitability among the Company’s manufacturing subsidiaries in Japan.

OthersNo special matters to disclose.

(2) Financial Position
As of the end of the consolidated first quarter, current assets amounted to ¥361.52 billion. This represents a decrease of ¥17.81
billion compared to the end of the prior consolidated fiscal year due to decreases in cash and deposits and accounts receivable,
despite an increase in inventories. Non-current assets amounted to ¥238.41 billion, up ¥6.27 billion from the end of the priorconsolidated fiscal year. This increase was mainly due to an increase in investment in securities stemming from a rise in the fairvalue of shares owned by the Company, despite a decrease resulting mainly from the amortization of intangible fixed assets. As
a result, total assets decreased ¥11.53 billion to ¥599.94 billion compared to the end of the prior consolidated fiscal year.
Liabilities amounted to ¥277.57 billion, a decrease of ¥20.65 billion compared to the end of the prior consolidated fiscal year.
This decrease was mainly due to decreases in accounts payable and commercial paper.
Net assets amounted to ¥322.36 billion, up ¥9.12 billion compared to the end of the prior consolidated fiscal year. This increase
was mainly due to the recording of profit attributable to owners of the parent in the amount of ¥6.8 billion, as well as an increasein net unrealized holding gain on securities.
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NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2021

As a result, the Company recorded a shareholders’ equity ratio of 52.4%, up 2.5 points compared to the end of the priorconsolidated fiscal year.

(3) Qualitative Information Related to Consolidated Earnings Forecasts
Our consolidated earnings forecasts for the current fiscal year were created based on the assumption that the impact of the
COVID-19 pandemic will largely abate in the second half. However, our sales for the consolidated first quarter were relatively
stronger than those in the previous earnings forecasts, mainly due to a temporary increase in the demand caused by a supply
uncertainty attributable to the spread of the COVID-19 pandemic.
We forecast that, though there is a concern that the recovery of the economy may be delayed by the further spread of the COVID19 pandemic, the economy will gradually recover in the second half. Therefore, at this point, we will not make changes to theconsolidated earnings forecasts released on May 14, 2020.

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NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2021

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheets
Prior Consolidated Fiscal Year
(March 31, 2020)
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
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

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5

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(Millions of yen)First Quarter, Current
Consolidated Fiscal Year
(June 30, 2020)

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

41,715
204,876
92,022
1,683
8,065
13,808(648)
361,522

74,30973,73435,246
9,064
28,286
72,597

34,4788,670
27,802
70,951

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

84,913
381
1,802
1,864
4,866
(93)
93,733
238,419599,942NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2021

Prior Consolidated Fiscal Year
(March 31, 2020)
LIABILITIESCurrent liabilities
Notes and accounts payable
Short-term loans
Current portion of long-term loans
Commercial paper
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 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

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6

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(Millions of yen)First Quarter, Current
Consolidated Fiscal Year
(June 30, 2020)

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

94,79329,861
7,735
25,000
1,996
2,736
57
22,154
184,334

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

30,00035,25812,015
13,861
2,106
93,242
277,577

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

9,699
10,646
261,147(5,071)
276,422

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

37,85011651(556)
37,957
7,985
322,364
599,942NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2021

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive
Income(Quarterly Consolidated Statements of Income)Three-month periods ended June 30, 2020 and 2019
(Millions of yen)Three-month period ended
June 30, 2019
(April 1, 2019 - June 30, 2019)

Three-month period ended
June 30, 2020
(April 1, 2020 - June 30, 2020)

192,986
167,587
25,39920,142
5,257

180,569
154,510
26,05822,385
3,673

26
904
66
18
156
1,173

40
385
66
325
155
974

358
122
100
582
5,848

254
96
59
410
4,237

9
17
25
52

0
5,597
5,597

1
18
20
5,879
912
764
1,676
4,203
47
4,156

12
7
14
1
36
9,798
2,233
655
2,888
6,909
101
6,807

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Rent income
Equity in earnings of affiliates
Foreign exchange gains
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
Subsidy income
Total extraordinary gains
Extraordinary losses
Loss on sales of non-current assets
Loss on disposal of non-current assets
Impairment losses
Loss on valuation of investment securities
Loss on sales of shares of subsidiaries and affiliates
Total extraordinary losses
Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit for the period
Profit attributable to non-controlling interests
Profit attributable to owners of the parent

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NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2021

(Quarterly Consolidated Statements of Comprehensive Income)Three-month periods ended June 30, 2020 and 2019
(Millions of yen)Three-month period ended
June 30, 2019
(April 1, 2019 - June 30, 2019)

Three-month period ended
June 30, 2020
(April 1, 2020 - June 30, 2020)

4,203

6,909

(1,737)(332)(2,075)
53

5,228
8
(428)
138

(163)

(5)

(4,255)(52)

4,941
11,850113(165)

11,785
64

Profit for the period
Other comprehensive income
Net unrealized holding (loss) gain on securities
Deferred (loss) 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

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NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2021

(3) Notes related to Quarterly Consolidated Financial Statements(Assumption for Going Concern)
No matters to report.

(Significant Fluctuations in Shareholders’ Equity)
No matters to report.

(Additional Information)(Application of Tax Effect Accounting for Transition from Consolidated Taxation System to Group Tax Sharing System)
The Company and certain domestic consolidated subsidiaries have calculated the amounts of deferred tax assets and deferred
tax liabilities in accordance with the provisions of tax laws in Japan prior to the amendments based on the treatments stipulated
in Paragraph 3 of Practical Solution on the Treatment of Tax Effect Accounting for the Transition from the Consolidated
Taxation System to the Group Tax Sharing System (Accounting Standards Board of Japan (ASBJ) Practical Issues Task Force
No. 39, March 31, 2020) instead of applying the provision of Paragraph 44 of Implementation Guidance on Tax EffectAccounting (ASBJ Guidance No. 28, February 16, 2018), regarding the transition to group tax sharing system provided for in
Act for Partial Amendment of the Income Tax Act, etc. (Act No. 8 of 2020), and items for which the non-consolidated taxation
system has been reviewed in line with the transition to the group tax sharing system.
(Effects of COVID-19 Pandemic When Making Accounting Estimates)
The Group made accounting estimates related to impairment loss on non-current assets and recoverability of deferred tax
assets, etc., based on information available at the time the consolidated financial statements were prepared.
Regarding the impact of the novel coronavirus disease (COVID-19), the Group’s accounting estimates reflect the assumptionthat the impact will gradually recover in the second half of the fiscal year ending March 31, 2021. However, no materialchanges are made to the assumption of estimates described in Additional Information of Annual Securities Report for theprevious consolidated fiscal year. There are still many uncertain factors regarding the impact of COVID-19 and it may affectthe financial condition and operating performance of the Group in the consolidated second and subsequent quarters.

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NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2021

(Segment Information, etc.)
Segment Information
I Three-month period ended June 30, 2019 (consolidated)
1. Information related to net sales and income (loss) by reportable segment(Millions of yen)
Reportable Segments
Advanced
Functional
Mobility &Life &
Materials & Electronics
Materials
EnergyHealthcare
Processing

Total

Others(Note) 1

Total

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

Net sales
Sales tocustomers

43,606

67,394

26,61232,546

22,692

192,852

134

192,986--

192,986

Intersegment
sales/transfers

456

541

431

727

128

2,285

1,484

3,770

-

(3,770)-Total

44,06367,936

27,04433,273

22,820

195,138

1,618

196,756-(3,770)

192,986

Segment income(loss)

1,495

2,030

1,274

529

1,396

6,726

50

6,777

(1,651)

131

5,257

(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.
3. Adjustments are eliminations of intersegment transactions.
4. The sum of segment income (loss) Total, Corporate, and Adjustments is equivalent to operating income as presented in“Consolidated”.
II Three-month period ended June 30, 2020 (consolidated)
1. Information related to net sales and income (loss) by reportable segment(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 to34,36958,23826,06018,97342,823

180,464104

180,569--

180,569

406

538

280

494

102

1,822

1,394

3,217

-

(3,217)-

Total

34,776

58,776

26,341

19,46742,925

182,287

1,499

183,787-(3,217)

180,569

Segment income(loss)

910

1,461

1,734

(166)

1,394

5,332

100

5,433

(1,897)

137

3,673

customers
Intersegment
sales/transfers(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.
3. Adjustments are eliminations of intersegment transactions.
4. The sum of segment income (loss) Total, Corporate, and Adjustments is equivalent to operating income as presented in“Consolidated”.

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NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2021

3. Supplementary Information(1) Overseas Sales
I Three-month period ended June 30, 2019 (consolidated)
GreaterChina
I Overseas sales(Millions of yen)

ASEAN

46,678Americas27,789Europe

9,172

Other

3,766

Total

3,874

II Consolidated sales

91,280
192,986(Millions of yen)
III Ratio of overseas sales to

24.1

consolidated sales (%)

14.4

4.8

2.0

2.0

47.3

II Three-month period ended June 30, 2020 (consolidated)
GreaterChina
I Overseas sales(Millions of yen)

ASEAN

44,025

Americas19,42820,170EuropeOther

10,768

Total

4,001

II Consolidated sales

180,569(Millions of yen)
III Ratio of overseas sales toconsolidated sales (%)

98,394

24.3

10.8

11.2

6.0

2.2

(Note) 1. Overseas sales consist of net sales of the Company and consolidated subsidiaries in other countries or regions.
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, UK(5) Other...................Korea

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54.5