FYE March 2020
Second Quarter
Financial Highlights
NAGASE & CO., LTD.
November 1, 2019

Copyright © 2019 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 2020 Earnings Projections

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Consolidated Statements of Income■ Despite firm performance in certain businesses, overall industry weakness led to lower salesand profits.
(100 millions of yen)

18/09

19/09

ChangeOrig. Forecast(full year)

Vs. PYNet sales

4,044

3,919

△ 12597%

8,500

Gross profit

529508△ 2096%

1,108<GP ratio>

13.1%

13.0%

△ 0.1%－13.0%

SG&A expenses

394

402

+7102%

848

Operating income

134106△ 2879%260

Ordinary income

139105△ 3376%

270

Profit attributable to owners ofthe parent

103

74

△ 2872%205@ 110.3@ 108.6@ 1.7 strong yen@110.0@ 16.7@ 15.7@ 1.1 strong yen@ 16.0

US$ Exchange rate
(period average)
RMB Exchange rate
(period average)【 Foreign exchange rate impact on19/09 net sales and operating income results 】
Net sales:△¥6.6 billion (approx.);Operating income: △¥100million

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2Net Sales by Region (Domestic, Overseas)■Despite firm performance in Japan and Europe, other regions reported lower sales. (overseas ratio of total sales 48.3%)
Domestic & Overseas Sales (100 millions of yen, %)Domestic（Left axis）

Overseas（Left axis）

Overseas Sales by Region (100 millions of yen, %)Overseas Net sales ratio（Right axis）

Greater China

50%50.0%

1,800

48.3%
40%
3,000

2,022

1,893

Europe

Other

191

596

1,200

1,893
82
74

(V:95%)(V:103%)175(V:92%)(V:107%)560(V:94%)

1,000

2,000
20%

800
600

1,000

87
72

1,600
1,400

30%

Americas

2,022
2,000

4,000

ASEAN

2,022

2,025
10%

1,074

999
(V:99%)(V:93%)

400
200

00%
18/09

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19/09

018/0919/09

V:Vs 18/09

3

Net Sales: Two-Year Comparison (by Segment)■Advanced Materials & Processing : Despite sales growth in digital print processing materials, sales of plastics wereweak and overall segment sales decreased.
■Electronics : Despite increased sales of formulated epoxy resins and photolithography material, sales of precision
processing‐related, equipment‐related, and display‐related materials used in connection withintermediate processing in semiconductors were lower, driving overall sales down.
Net Sales by Segment (100 millions of yen)
Functional Materials

Advanced Materials & Processing

4,500
4,000
3,500

Electronics

Mobility & Energy

4,044
429
682

3,000
2,500

Life & Healthcare

Others

3,919
437
656

618

573

1,414

1,377

89687218/09

19/09

2,000
1,500
1,0005000* As of April 1, 2019, the Automotive & Energy Segment has been renamed the Mobility & Energy Segment

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4Operating income: Two-Year Comparison (by Segment)■Profit lower in all segments other than the Functional Materials segment.
■Functional Materials : Despite lower sales, profits were higher due to improved sales mix.
■Corporate/Other : Expenses increased due to recording of costs related to the Prinova acquisition.

Operating income by Segment (100 millions of yen)
Functional Materials

Advanced Materials & Processing

150120Electronics

Mobility & EnergyLife & Healthcare

Others/Corptrate

134211061419119060403146442728300△15△29(30)
18/09

19/09

* As of April 1, 2019, the Automotive & Energy Segment has been renamed the Mobility & Energy Segment

Copyright © 2019 NAGASE & CO., LTD.

5

Consolidated Balance Sheets■Assets: Increase of ¥62.7 billion due to intake of assets in connection with new consolidation of a subsidiary, an increase ingoodwill, and an increase in investments in securities due to price increases of shares owned.
■Liabilities: Increase of ¥60.1 billion due to increases in short‐term loans and commercial paper, which were higher thanredemptions of bonds and a decrease in accounts payable.
■Net Assets: Increase of ¥2.5 billion due to recording of profit attributable to owners of the parent, which was greater than thedecrease in translation adjustments.
■Shareholders’ Equity Ratio down 5.0 points to 49.2%.
Assets
19/03

Liabilities and Net Assets
19/09

Change

19/03

Total current as sets

3,658

3,859

+ 200

Total current liabilities

Cash and time deposits

440458+ 17Notes and accounts payable

2,304

2,330+ 25

Inventories

810

950+ 140

Other102

119+ 16

Total non-c urrent as sets

2,015

2,441

Property, plant and equipment

664

Intangible fixed assets( 100 millions of y en)

19/09

Change2,018

2,580+ 561

1,172

1,140

△ 31

Short-term loans and current portion of CP

579

1,173+ 593

Other

266

266

△0

Total long-term liabilities

528

569+ 40+ 426

Long-term loans and Bonds

275

275

+0704+ 39

Net defined benefit liability

124

135+ 10372

709+ 336Other

128157+ 29

Investments, other assets

977

1,027+ 50

Total liabilities

2,547

3,149+ 601

Investments in securities

902933+ 31

Total net as sets

3,126

3,151+ 25

Other7594+ 19

Shareholders’equity

2,628

2,674+ 45

Accumulated other comprehensive income

447

424

△ 23Net unrealized holding gain on securities

418437+ 18

Translation adjustment32△ 11△ 43

Other

△2△0+2

Non-controlling interests

4952+35,673

6,300+ 627

Notes and accounts receivable

Total assets

5,673

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6,300+ 627(Deferred tax liabilities, etc.)

Total liabilities and net assets

6

Consolidated Cash Flows
Cash Flows
19/09(100 millions of yen)

Main factors

18/09

Profit before income taxes ＋105

Net cash provided by (used in) operating activities

Depreciation and amortization other than amortization of goodwill,
124 amortization of goodwill +54▲ 39

Working capital +17
Income tax paid ▲42
Payments for acquisition of shares of subsidiaries accompanying
changein scope of consolidation ▲428

Net cash provided by (used in) investing activities▲ 478 Purchases of tangible and intangible fixed assets ▲43▲ 84

Purchases of investment in securities ▲5Repayments of short-term loans +451

Net cash provided by (used in) financing activities

394

Net increase (decrease) in commercial papers ＋80
Payments for redemption of bonds ▲10089

Cash dividends paid ▲29

Effects of exchange rate changes on cash andcash equivalents

▲ 23

5

Net increase (decrease) in cash and cash equivalents

17▲ 28Cash and cash equivalents at beginning of the year

440

428

Cash and cash equivalents, at end of the period

457

400

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7

FYE March 2020 Earnings Projections■China experienced an economic deceleration, while the impact of the U.S.‐China trade frictions has slowed
growth in the global economy, leading to a continued challenging business environment■The impact of this transaction on consolidated earnings should be limited in the current fiscal year, as only five months ofPrinova Group results will be incorporated into the Company’s full‐year earnings and the Company will incur significant
temporary costs associated with the acquisition in question(100 millions of yen)

19/03

20/03Actual（A）

Previous Full Year
Forecast （B）

Revised Full Year
Forecast（C）

Change（C‐A）

Vs. PY（C/A）

Net sales

8,077

8,500

8,200＋123102%

Gross profit

1,054

1,108

1,080

＋26102%<GP ratio>

13.1%

13.0%

13.2%

―

―

SG&A expenses

802848865＋63108%Operating income

252260215△3785%

Ordinary income

266270220△4683%

Profit attributable toowners of the parent

201

205

173

△2886%

US$ Exchange rate
(period average)@110.9@110.0@108.0@2.9―

RMB Exchange rate
(period average)

@16.5

@16.0

@15.4Copyright © 2019 NAGASE & CO., LTD.

Strong yen@1.1
Strong yen―8https://www.nagase.co.jp/

These presentation materials contain forward‐looking projections based on assumptions, forecasts, andplans as of November 1 , 2019. Actual earnings may differ from projections due to risks and uncertainties in
the future global economy, competitive landscape, currency exchange rates, etc.

Copyright © 2019 NAGASE & CO., LTD.