FYE March 2020
Financial Highlights
NAGASE & CO., LTD.
May 14, 2020

Copyright © 2020 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 2021 Earnings Projections

9Dividends

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Consolidated Statements of Income■ Net sales: Sales were largely level. The Group added sales from the Prinova Group, newly-acquired by the Company in the consolidated second quarter of the fiscal year,
but sales also suffered from trade friction between the US and China and the growing COVID-19 epidemic.
■ Operating income: Income was down because of such factors as rising expenses associated with acquiring the Prinova Group and because of investment in leading-edge
technology for medium- to long-term growth. Moreover, the Prinova Group’s contribution to profitability during the fiscal year was limited because of the temporary
costs associated with merging our businesses costs associated with merging our businesses

19/03

20/03

ChangeRevised Forecast(full year)

Vs. PYNet sales

8,077

7,995

△ 8199%8,200

Gross profit

1,054

1,049

△599%

1,080

<GP ratio>

13.1%

13.1%

+0.1%

－13.2%

SG&A expenses

802857

+ 55

107%

865

Operating income

252

191

△ 6076%215

Ordinary income

266

190

△ 7572%

220

Profit attributable to owners ofthe parent

201

151

△ 4975%173@ 110.9@ 108.7@ 2.2 strong yen@108.0@ 16.5@ 15.6@ 0.9 strong yen@ 15.4

US$ Exchange rate
(period average)
RMB Exchange rate
(period average)【 Foreign exchange rate impact on 20/03 net sales and operating income results 】
Net sales:△¥12.6 billion (approx.);Operating income: △¥500million (approx.)

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3

Net Sales by Region (Domestic, Overseas)■ In Asia including Japan, sales were down, but with the acquisition of the Prinova Group, net sales in North America andEurope rose (overseas ratio of total sales: 49.7%)
Overseas Sales by Region (100 millions of yen, %)Domestic & Overseas Sales (100 millions of yen, %)Greater China

Domestic（Left axis）

Overseas（Left axis）

Overseas Net sales ratio（Right axis）

8,000
7,000

4,000

50% 3,500
48.9%

ASEAN

Americas

EuropeOther

3,951

3,971

168
152

189
246

394

49.7%

(V:112%)(V:161%)554(V:140%)

3,000

6,000

3,951

3,971

40%

1,181
2,500

1,106
(V:107%)5,000(V:94%)

30% 2,000
4,000
1,500

20%

3,000
2,000

4,126

1,000

2,054

4,023

1,875
(V:99%)

10%(V:91%)
500

1,000
00%
19/03

Copyright © 2020 NAGASE & CO., LTD.

20/03

019/03

20/03
V:Vs 19/03

4

Net Sales: Two-Year Comparison (by Segment)■ Mobility & Energy: Lower sales due to factors like lower sales of plastic materials in Japan and overseas as the number ofautomobiles produced decreased■ Life & Healthcare: Sales increased. Although sales of AA2G™ decreased, sales of TREHA™, pharmaceutical raw materials andintermediates, and medical materials increased, and we added sales from the Prinova Group, newly-acquired by the Company inthe consolidated second quarter of the fiscal year

Net Sales by Segment (100 millions of yen)
Functional Materials
Electronics
Life & Healthcare

8,077
8,000

907

7,000

6,000
5,000

1,392
1,223

Change in Net Sales by Segment (100 millions of yen)

Advanced Materials & Processing
Automotive & Energy
Others/Corptrate

7,995

Functional
Materials△103
AdvancedMaterials &Processing△81 Electronics

1,215
1,260
1,151

8,077
4,000
3,000

2,752

2,670

1,796

1,693

19/03

20/03

Life &Healthcare△71307
Mobility &Energy△132

Others△07,995

2,000
1,0000
19/03

20/03

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

Copyright © 2020 NAGASE & CO., LTD.

5Operating income: Two-Year Comparison (by Segment)■ Advanced Materials & Processing: Despite reduced sales, increased profitability in the Company’s manufacturing subsidiaries inJapan led to higher profit■ Electronics: Lower profits due to declining sales and worsening profitability of the thin processing business for glass substrate inChina■ Life & Healthcare: Despite increased sales, profitability decreased because of temporary costs associated with merging
businesses and the worsening of profitability at some of the Company’s Japanese manufacturing subsidiaries■ Other/Corporate: Lower profits, mainly due to increased expenses in connection with the Prinova acquisition and investment inleading-edge technology for medium- to long-term growth
Operating income by Segment (100 millions of yen)
Functional Materials
Electronics
Life & Healthcare

300240180

Change in Operating income by Segment (100 millions of yen)

Advanced Materials & Processing
Mobility & Energy
Others/Corptrate

AdvancedMaterials &Functional Processing Electronics△20Materials
4252△14619130391874538085120

Life &Healthcare△6Others/Co
rptrate△25252

19160
540

Mobility &Energy△11△3453△59(60)
19/03

20/03

19/03

20/03

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

Copyright © 2020 NAGASE & CO., LTD.

6Consolidated Balance Sheets■ Assets increased ¥44.1 billion due to an increase of assets and the recording of goodwill and other intangible assets related to the newconsolidation of subsidiaries, though this was offset somewhat by a decrease in investments in securities stemming from the sale of certain shares
owned by the Company and lower fair values of shares owned■ Liabilities increased ¥43.4 billion due to increase in long-term loans and bonds as a result of procuring funds for the Prinova Group acquisition■ Shareholders’ equity ratio down 4.3 points to 49.9%

Assets
19/03

Liabilities and Net Assets
20/03

Change

19/03

Total current assets

3,658

3,793+ 135

Total current liabilities

Cash and time deposits

440

514+ 73

Notes and accounts payable

2,304

2,211

△ 93

Inventories

810

956+ 146

Other

102

111+8

Total non-current assets

2,015

2,321

Property, plant and equipment

664

Intangible fixed assets( 100 millions of y en)

Change

20/03

2,018

2,004

△ 141,172

1,082

△ 89

Short-term loans and current portion of CP

579

618+ 39

Other266

302+ 35

Total long-term liabilities

528

978+ 449+ 306

Long-term loans and Bonds

275

726+ 450743+ 78

Net defined benefit liability

124

136+ 12372

725+ 353

Other

128

115

△ 13

Investments, other assets

977

852

△ 125

Total liabilities

2,547

2,982+ 434

Investments in securities

902

761

△ 141

Total net assets

3,126

3,132+6

Other75

91+ 15

Shareholders’equity

2,628

2,723+ 94

Accumulated other comprehensive income447329△ 118

Net unrealized holding gain on securities

418326△ 92Translation adjustment

3210△ 21Other△2△6△3Non-controlling interests

4979+ 29

5,673

6,114+ 441

Notes and accounts receivable

Total assets

5,673

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6,114+ 441(Deferred tax liabilities, etc.)

Total liabilities and net assets

7

Consolidated Cash Flows
Cash Flows

20/03

Net cash provided by (used in) operating activities

Net cash provided by (used in) investing activities

Net cash provided by (used in) financing activities

Effects of exchange rate changes on cash and cash equivalents(100 millions of yen)

Main factors
Profit before income taxes ＋242
Depreciation and amortization other than amortization of goodwill,330amortization of goodwill +121
Working capital ▲89
Income tax paid ▲70
Proceeds from sales of investments in securities ▲446

▲ 492

Purchases of tangible and intangible fixed assets ▲123
Income from sale of investment securities +102

Increase (decrease) in long-term loans ＋243
Increase (decrease) in corporate bond ＋100243
Cash dividends paid ▲57

19/03

173▲ 73▲ 89▲ 18

1Net increase (decrease) in cash and cash equivalents

63

12Cash and cash equivalents at beginning of the year

440

428

Decrease in cash and cash equivalents resulting from exclusion ofsubsidiaries from consolidation－▲0Increase in cash and cash equivalents accompanying consolidation

1－504

440

Cash and cash equivalents, at end of the period

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FYE March 2021 Earnings Projections■ In the Life & Healthcare Segment, we foresee a significant increase in sales. This will be driven by the Prinova Group, now able to contribute foran entire fiscal year, and by favorable trends in North America and Europe, especially sales of vitamins, amino acids, and other products■ In other segments, however, we forecast sales to decrease considerably because of the impact of COVID-19 spreading globally■ Based on the above, we project lower sales and profits overall[Assumptions]•The economic impact of the COVID-19 epidemic will largely abate in the second half
•Foreign exchange rates: ¥106 to the U.S. dollar and ¥14.7 to the RMB

20/03(100 millions of yen)

21/03

Actual（A）

Full Year Forecas（B）

Vs. PY（B/A）

Net sales

7,995

7,54094%

Operating income

191

15078%

Ordinary income

190

15581%

Profit attributable to ownersof the parent

151

12583％

US$ Exchange rate
(period average)@108.7@106.0―RMB Exchange rate
(period average)

@15.6

@14.7

―

Copyright © 2020 NAGASE & CO., LTD.

9Dividends■ Current fiscal year: Expecting to pay dividends of ¥44 per share for the full year, consisting of a ¥22 per share interim dividend and a ¥22 pershare year-end dividend■ Next fiscal year: Expecting to pay dividends of ¥44 per share for the full year, consisting of a ¥22 per share interim dividend and a ¥22 per shareyear-end dividend（％、Yen）

（％）

45

2.0

40
35
30

1.5

25
20
15

1.0

10
50
Dividend per Share(left axis)
Payout Ratio(left axis)
DOE(right axis)

20/03
21/03
（Forecast) （Forecast)

11/03

12/03

13/03

14/03

15/03

16/03

17/03

18/03

19/03

22

24

26

28

30

32

33

40

42

44

44

22.0

36.0

23.2

30.5

33.7

33.0

40.4

29.3

26.0

36.0

43.7

1.42

1.52

1.52

1.50

1.44

1.46

1.481.69

1.71

1.78

1.77

0.5

*1 FYE March 2018 dividends include a special dividend of ¥5 per share.
*2 20/03 year-end dividend to be submitted for approval to general meeting of shareholders scheduled for June 2020

Copyright © 2020 NAGASE & CO., LTD.

10

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

These presentation materials contain forward-looking projections based on assumptions, forecasts, andplans as of May 14 , 2020. Actual earnings may differ from projections due to risks and uncertainties in thefuture global economy, competitive landscape, currency exchange rates, etc.

Copyright © 2020 NAGASE & CO., LTD.