Financial Highlights

NAGASE&CO.,LTD.
November 4,2021

Copyright © 2021 NAGASE & CO., LTD.

IDE N TIFY >>> DE V E LOP >>> E X PA N D

FYE March 2022 Second Quarter

Contents■ Consolidated Statements IncomeP3■ Gross Profit by Region

P4■ Gross Profit by Business & Segment

P5■ Operating Income by Business & Segment

P6■ Segment Operating Income Overview

P7～P11■ State of Major Manufacturing Subsidiaries P12■ Consolidated Balance Sheets

P13■ Consolidated Cash FlowsP14■ FYE March 2022 Earnings Projection P15～P16■ Shareholder Returns

Copyright © 2021 NAGASE & CO., LTD.

P17

Consolidated statements income▶ Gross profit
・ Higher profit in all segments, with all stages of profit below gross profit reaching record highs for a cumulative Second quarter・ In particular, the automobile-related business, resins and electronics-related businesses, and the Prinova Group‘s nutritionrelated business performed well
▶ Operating income
・In response to the increase in gross profit, income increased significantly year-on-year; the economic impact of the COVID-19
epidemic had been significant in the same period of the previous year
▶ Profit attributable to owners of the parent
・Income increased due to significant increase up to ordinary income despite decrease in gain on sales of cross-shareholdings
100 millions of yen

20/09

Sale

21/09

ChangeVs.PY

Forecast

Achievement

s

2,863

3,737

+ 873

131%

ーー

Gross profit

537

687

+ 149

128%

1,300

53%

<GP ratio>
SG&Ae x p e n s e s

18.8%

18.4%

(0.4pt)

－ー－

448

492

+ 43

110%

1,000－

89

194

+ 105

218%

300

65%

96204

+ 107

211%

310

66%

101146

+ 44

144%

225

65%

@ 106.9@ 109.8@ 2.9 Weak yen@109.5@ 15.3@ 17.0@ 1.7 Weak yen

＠16．9

Operatingi n c o m eOrdinary
i n c o m eProfit attributableto owners of thep a r e n t
US$ Exchange rate
(period average)
RMB Exchange rate
(period average)※ Offset to sales and cost of sales from application of revenue recognition standards: Sep. 2020, -¥94.7 billion; Sep. 2021, -¥117.1 billion※ Impact from foreign exchange: Gross profit, +¥1,000 million; Operating income, +¥300 million
Copyright © 2021 NAGASE & CO., LTD.

3

Gross Profit By Region▶ Higher profit both domestic and overseas▶ Domestic : In particular, the automobile-related business and electronics-related business for mobile devices/displays performed well
▶ Overseas: The resins business, mainly for office equipment, appliances, and video game devices and focused on Greater China and ASEAN,
and the nutrition-related business in Europe and the Americas performed wellDomestic & Overseas Gross profit(100 millions of yen)
Total 687

700

Overseas334

Overseas gross profit By Region(100 millions of yen)

100%

90%

600

Total 537

80%

500

Overseas
239

70%

400

Overseasratio
44.6%

Overseas
ratio
48.7%

60%
50%

300

40%

200

Domestic
297

Domestic
352

30%
20%

100
10%
00%

20/09

21/09

※From FYE March 2022, the usual overseas net sales per-destination region have been replaced by per-region information for grossprofit, aggregated for each location of consolidated※Domestic figures under Domestic & Overseas Gross Profit include inter-regional adjustments
Copyright © 2021 NAGASE & CO., LTD.

4

Gross Profit By Business & Segment▶ Higher profits in all segments, with a cumulative second quarter gross profits reaching record highs▶ Advanced Materials & Processing: Profitability improved due to strong demand in the resins business and rising market conditions▶ Life & Healthcare: Profits increased due to strong performance in the Prinova Group's nutrition-related business and strong salesof cosmetics-related materials※Comparison information for segment values reflects impact from business segmentation changes implemented on April 1, 2021.

Change in Gross Profit By Segment (100 millions of yen)

Gross Profit By Business & Segment (100 millions of yen)

20/09

21/09

History of Gross Profit(100 millions of yen)400300345260341277308299

200

100000Q1

Q2

21/03
Copyright © 2021 NAGASE & CO., LTD.

Q322/03

Q45

Operating Income by Business & Segment▶ Due to higher gross profit across all business segments, operating income reached a new record high for a cumulative
consolidated second quarter, continuing record highs from the first quarter▶ we continue to invest for sustainable future growth, including in DX-related areas

Change in Operating Income By Segment (100 millions of yen)

Operating Income by Business & Segment(100 millions of yen)240

Total 194200

Total 194160

Manufacturing64

Life &Healthcare
50

Mobility 20

Total 89
1208040

Total 89

Life &Healthcare
30

Manufacturing
45

Electronics &Trading &Energy
Other Mobility
33130
3Electronics &Energy
54

20/09

Trading &Other
440

History of Operating Income(100 millions of yen)

Advanced Materials& Processing
64

Advanced Materials& Processing
34
Functional materials
Functional materials
1938

Corporate&Others(31)

Corporate&Others
(33)

21/09

97

10097
71

80

40

58

5260
36

200(40)00

By Business
20/09

By Business
21/09

Copyright © 2021 NAGASE & CO., LTD.

By Segment
20/09By Segment
21/09

Q1Q２21/03

Q322/03

Q46

Functional Materials Segment Operating Income Overview▶ Raw materials sales increased for coating and urethane raw materials as well as those related to industrial oil solutions and plastic

materials, driven by an increase in automotive production▶ Sales trended strong in areas like electronics chemicals for the electronics industry, such as for semiconductor-related products▶ Profits increased year-on-year; the economic impact of the COVID-19 epidemic had been significant in the same period of theprevious year, primarily in the automobile-related businessHistory of operating income （100 millions of yen）

Operating income by business（100 millions of yen）

40

Total 38

2019
18

Manufacturing 61530

13131020

10

Total 19
Trading&Other32

8

Manufacturing 2
10

5Trading&Other
16

00

20/09

21/09

Q1

Q２

21/03
Copyright © 2021 NAGASE & CO., LTD.

00Q3

Q4

22/03

7

Advanced material &Processing Segment Operating Income Overview▶ The resins business, mainly in products for the office equipment, appliance, and video game device industry, performed well thanks to increased

demand in Japan and overseas, primarily in China, as well as rising market conditions▶ Digital print processing materials sales continued to be sluggish due to impact from declining market conditions from the second half of theprevious fiscal year
▶ Profits increased significantly year-on-year thanks to strong demand in the resins business both domestically and overseas, as well asimprovement on profitability from rising market conditions

Operating income by business（100 millions of yen）

History of operating income （100 millions of yen）

Total 643260
Manufacturing 13130452020

Total 343015Manufacturing
4Trading&Other63

171514Trading&Other
30

0000
20/09

21/09

Q1Q２

21/03
Copyright © 2021 NAGASE & CO., LTD.

Q3

Q422/038

Eｌectronics & Energy Segment Operating Income Overview▶ Sales increased for display-related materials and precision processing-related materials for semiconductors▶ Sales of formulated epoxy resins-related products increased, primarily for mobile devices and semiconductors▶ Profits increased year-on-year, maintaining strong performance from the second half of the previous fiscal year

History of operating income （100 millions of yen）

Operating income by business（100 millions of yen）
60

2930
Total 54252524
Manufacturing
194520Total 33
30

1616

Manufacturing
16

Trading &Other
35

1510

Trading &Other
1700
20/09

21/09

Q1Q２

21/03
Copyright © 2021 NAGASE & CO., LTD.

00Q3

Q4

22/03

9

Mobility Segment Operating Income Overview▶ Sales increased in the resins business domestically and overseas, primarily in ASEAN, and profitability increased thanks to rising market
conditions▶ Sales increased in functional materials and functional components for interior and exterior fittings and electrification▶ Profits increased significantly year-on-year amid recovery in automotive production

History of operating income （100 millions of yen）

Operating income by business（１００ millions of yen）

Total 20

20

1010
98715

76Trading &Other20

10

43

2
50Total 3Trading &Other3(1)(2)

020/09

21/09

Q1Q２

21/03
Copyright © 2021 NAGASE & CO., LTD.

00Q3

Q4

22/03

10

Life & Health Care Segment Operating Income Overview▶ Materials sales, manufacturing, and processing all trended strongly in the nutrition-related business, primarily focused on the Prinova Group▶ Sales increased related to food materials, primarily TREHA™, in cosmetics materials, primarily AA2G™, and related to pharmaceutical rawmaterials and intermediates▶ Profits increased significantly year-on-year; the economic impact of the COVID-19 epidemic had been significant in the same period of theprevious year, primarily in food materials and cosmetics-related material

History of operating income （100 millions of yen）

Operating income by business（100 millions of yen）
Total 50503027234021

Total 3030

Manufacturing3720161320

Manufacturing
24

1310

100

Trading &Other
620/09Trading &Other
13021/09

Q1Q２

21/03
Copyright © 2021 NAGASE & CO., LTD.

00Q3

Q4

22/03

11

State of Major Manufacturing Subsidiaries▶ Nagase ChemteX Corporation: Profits increased with strong sales related to formulated epoxy resins primarily for mobile devices andsemiconductors, as well as for products like photolithography materials for displays▶ Hayashibara Co., Ltd.: Profits increased with demand for the TREHA™ food material and with recovery in demand for the AA2G™
cosmetics material▶ Prinova Group: Profits increased with continued strong sales of nutrition materials thanks to U.S. economic recovery as well as withrecovery of manufacturing and processing

100 millions of yen

20/09
NagaseChemteX
Corporation

HayashibaraCo., LtdCopyright © 2021 NAGASE & CO., LTD.

ChangeVs.PY

Sales

120

14625121%

Gross profit

3747

10127%

Operating income

14239164%

Sales

114

130

15114%

Gross profit

49544109%

Operating income

2123

1108%

1515-100％

571127%444557

113

126%

Gorss profit

85106

21126%

Operating income

253712148%

99(0)100%152712180%

Goodwill amortization
etc.
Operating income afteramortization burden

Sales

Prinova Group

21/09

Goodwill amortization
etc.
Operating income aftar
amortization burden

12Consolidated Balance Sheets▶ Current assets: Accounts receivable and inventories increased due to favorable performance (working capital increased)▶ Net assets : Shareholders' equity increased slightly due to booking profit from the quarter despite purchases of treasury stock,
payments of dividends, and decline in market value of investments in securities▶ Net D/E ratio: Increased to 0.28 with increase in short-term borrowings due to demand for funds from increased working capital
100 millions of yen

21/03

21/09

ChangeTotal Current Assets

4,017

4,415

398

(Cash&deposits)

492

456

(35)

2,425

2,607

181

972

1,218

246

2,388

2,371

(17)

937

904

(32)

Total assets

6,405

6,786

381

Current Liab.

2,061

2,431

370

960

858

(101)

Total Liab.

3,021

3,289

268

Shareholders' equity

2,847

2,928

449

468

87

99

Total net assets

3,384

3,497

Working capital

2,198

2,554

Shareholders' equity ratio

51.5%

50.1%

0.23

0.28(Notes&account Receivbable)(Inventories)
Total non-current assets(Investments in security)

Non-current Liab.

Accum. Other Comprehensive Income
Non-controlling interest

NET D/E ratio
Copyright © 2021 NAGASE & CO., LTD.

DetailesShort-term loans/CP+275
Current Portion of Bonds+100

81 Purchase of treasury stock (35)Translation adjustment+46
19 Net unrealized holding gain on
securities （２５）
12112

13

Consolidated Cash Flows▶ Operating CF: Net cash used of ¥13.6 billion as working capital increased due to strong business performance overall▶ Investing CF: Net cash used of ¥4.9 billion due to investments, mainly in property, plant and equipment, offset in part by proceedsfrom sales of investments in securities▶ Financing CF: Net cash provided of ¥14.4 billion, mainly due to an increase in short-term loans in connection with an increase inworking capital, offset in party by repayments of long-term loans and purchases of treasury stock
100 millions of yen

２0/09

21/09

Operating CF

132

(136)

Investing CF

(25)

(49)

Free CF106(185)

(236)

144

(4)

3(134)

(38)

66

68

(86)

(75)

22(327)

Financing CF
Effects of exchange rate changes oncash and cash equivalents
Net Change in cash and cash equivalents

Depreciation and amortization oftangible and intangible assets
Fixed asset investment
Change in working capital
Copyright © 2021 NAGASE & CO., LTD.

14

FYE March 2022 Earnings Projection▶ Strong first half performance exceeding initial expectations in the resins, automobile-related, and electronics-related business, as well as thePrinova Group▶ We expect second half profits to be lower than the first half. This forecast mainly reflects a softening of the resin market, a decrease in demand
due to weakening of demand for in-home consumption, concerns regarding a decrease in automobile production due to shortages in the supply ofsemiconductors, components, etc., and an increase in business expenditures due to a normalization in economic activities.
▶ While we expect a slowdown in the second half of the fiscal year, we project full-year profit to increase year on year for all profit measures below
gross profit(No changes to the earnings projections released in August 2021)

100 millions of yen

21/03
Actual22/03
Forecast

ChangePercent Change

Gross profit

1,146

1,300

153113%

SG&A expenses

926

1,000

73108%

Operating income

219

300

80137%

Ordinary income

228

310

81136%

Profit attributable to ownersof the parent

188

225

36119%

US$ Exchange rate
(period average)@ 106.1

＠ 10９．５

RMB Exchange rate
(period average)@ 15.7@ 1６．９Copyright © 2021 NAGASE & CO., LTD.

15FYE March 2022 Earnings Projection(By segment)▶ We expect second half profits to be lower than the first half across all segments, although we expect year-on-year profit growthacross all segments on a full-year basis. This forecast mainly reflects a softening of the resin market, a decrease in demand due toweakening demand for in-home consumption, concerns regarding a decrease in automobile production, and an increase in business
expenditures across all business segments due to a normalization in economic activities(No changes to the earnings projections released in August 2021)

100 millions of yen

21/3 Actual
Functional materials

17721114%

Operating income

4766

18140%

26829526110%

7396

22131%

25527418107%

Operating income

84883105%Gross profit

8911222125%

Operating income

183415184%

37443762117%

659327143%

153271%

Operating income

(68)

(77)

(8)

112%

Gross profit

1,146

1,300

153113%21930080137%

Electronics& Energy

Gross profit

Corporate&Others

Total

Copyright © 2021 NAGASE & CO., LTD.

Percent Change

155

Gross profit

Life & Healthcare

ChangeGross profit

Advanced Materials& Processing

Mobility

2２/3 Forecast

Operating income

Gross profit
Operating income
Gross profit

Operating income

16Shareholder Returns▶ Current fiscal year: We expect to pay a dividend of ¥48 per share for the full year, consisting of a ¥24 per share interim dividend
and a ¥24 per share year-end dividend (expected increase in dividends for a 12th consecutive fiscal year)▶ Currently mid-acquisition of treasury stock of ¥6 billion (February 8, 2021 to February 4, 2022; as of Sep. 30, 2021,
acquisition completed for ¥4.4 billion)

Total Dividend

Stock buy-backTotal Payout Ratio(100 Millions of yen)(%)

14,000

51.0
48.2

50.0

12,00010,85239.5
10,000

34.9

33.7

35.6
33.0

5,047
6,799

4,000

2,000

40.0
35.2

30.5

8,000

6,000

36.0

5,269

4,943

1,649

3,557

3,811

4,064

1,107

4,064

4,162

1,776

7,186

30.0

6,643

1,956

5,456

952
20.0

5,023

5,230

5,456

5,691

5,805

3,295

3,557

3,811

13/03

14/03

15/03

16/03

17/03

18/03

19/03

20/03

21/03

22/03
(Forecast)

¥２６

¥２8

¥30

¥32

¥33

¥40

¥42

¥44

¥46

¥48

0
Dividend pershare

10.00.0※ 18/03 year-end dividend include a special dividend of ¥5 per share.
※ 22/03 year-end dividend to be submitted for approval to the 107th general meeting of shareholders scheduled for June 2022.

Copyright © 2021 NAGASE & CO., LTD.

17

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

These presentation materials contain projections based on forward-looking
assumptions, forecasts, and plans as of November 4, 2021.
Actual earnings may differ from projections due to risks and uncertainties in
the future global economy, competitive landscape, currency exchange rates,
etc.

Copyright © 2021 NAGASE & CO., LTD.