Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2024
<Under Japanese GAAP>

August 3, 2023

These financial statements have been prepared for reference only in accordance with accounting principles and practices generally accepted in Japan.

NAGASE & CO., LTD.
Stock exchange listing: Tokyo (Prime Market)
Code number:8012
URL (https://www.nagase.co.jp/english/)Representative:
Hiroyuki Ueshima, Representative Director and President
Contact:
Yoshihisa Shimizu, Executive Officer, General Manager, Corporate Management Department
TEL:+81-3-3665-3103
Filing of quarterly report (scheduled): August 9, 2023
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, 2024
(April 1, 2023 to June 30, 2023)(1) Consolidated Operating Results
Net sales
For the first quarter ended
June 30, 2023
June 30, 2022

Gross profit

Operating income(% = year-on-year change)

Profit attributable toowners of the parent

Ordinary income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

224,062
219,571

2.0
19.1

38,70739,904

-3.0
15.4

6,955
10,871

-36.0
11.6

7,338
11,542

-36.4
8.3

4,367
7,969

-45.2
11.2

(Note) Comprehensive income

First quarter ended June 30, 2023: ¥14,866 million (12.8% decrease)
First quarter ended June 30, 2022: ¥17,047 million (57.6%)
Earnings per share

For the first quarter ended
June 30, 2023
June 30, 2022

Earnings per share (diluted)
Yen

Yen

37.45
66.69

−
−

(2) Consolidated Financial Position
Total assets

Net assets per share

Millions of yen

Millions of yen%

Yen

774,807762,688385,268
378,38848.3
48.2

3,232.75
3,139.26

June 30, 2023
March 31, 2023
(Reference) Equity capital

Shareholders’equity ratio

Net assets

As of June 30, 2023: ¥ 374,134 million
As of March 31, 2023: ¥ 367,675 million

2. Dividends
1Q
For the year ended (or ending)March 2023
March 2024
March 2024 (forecast)

2Q

Annual Dividends per Share
3Q
Fiscal year end

Annual

Yen

Yen

Yen

Yen

Yen

−
−

30.00

−

40.00

70.00

40.00

−

40.00

80.00

(Note) Revisions to the latest dividends forecast: No

3. Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2024
(April 1, 2023 to March 31, 2024)(% = year-on-year change)

Net sales
Millions of yen%

Millions of yen

958,000

4.9

171,000

Full fiscal year

OperatingincomeGross profit% Millions of yen

10.0

34,500Ordinary income% Millions of yen

3.4

32,600

Profit attributableto owners of theparent% Millions of yen

0.2

24,000Earnings
per
share

%

Yen

1.6

209.35(Note) Revisions to the latest consolidated earnings forecast: No* Notes(1) Changes in major subsidiaries during the period (changes in specified subsidiaries accompanying changes in the scope of
consolidation): No
New: ― (Company name:)
Excluded: ― (Company name:)(2) Application of special accounting methods to the preparation of quarterly financial statements: Yes(Note) For details, please refer to 2. Quarterly Consolidated Financial Statements and Notes, (3) Notes Related to Quarterly Consolidated Financial
Statements (Special Accounting Treatment Applied in the Preparation of Quarterly Consolidated Financial Statements), on P.9 of thisdocument(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: Yes
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(Note) For details, please refer to 2. Quarterly Consolidated Financial Statements and Notes, (3) Notes Related to Quarterly Consolidated Financial
Statements (Change in Accounting Policy), on P.9 of this document(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, 2023
ii.

117,908,285 shares

117,908,285 shares

March 31, 2023

786,718 shares

Number of treasury stock as of the fiscal period end
June 30, 2023

iii.

March 31, 2023

2,175,451 shares

Average number of shares during the period

June 30, 2023
116,646,422 shares June 30, 2022
119,507,343 shares(Note) The number of treasury stock as of the fiscal period end includes Company shares held by the Stock-Granting Trust for Directors (292,200
shares as of June 30, 2023). Treasury stock deducted from the calculation of the average number of shares during the period includes Company
shares held by the Stock-Granting Trust for Directors (292,200 shares as of June 30, 2023).

* 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.
For matters related to earnings forecasts, please refer to 1. Qualitative Information, (3) Qualitative Information Related toConsolidated Earnings Forecasts, on P.4 of this document.

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2024

Attachments
1． Qualitative Information

2(1) Review of Business Performance2(2) Review of Financial Position

4(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
Three-month periods ended June 30, 2023 and 2022

7

Quarterly Consolidated Statements of Comprehensive Income
Three-month periods ended June 30, 2023 and 2022

8(3) Notes Related to Quarterly Consolidated Financial Statements

9(Assumption for Going Concern)

9(Change in Accounting Policy)

9(Significant Fluctuations in Shareholders’ Equity)

9(Special Accounting Treatment Applied in the Preparation of Quarterly Consolidated Financial Statements)

9(Additional Information)

9(Segment Information, etc.)

101

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2024

1. Qualitative Information(1) Review of Business Performancea.

General Summary of Results

The global economy continued to recover during the first quarter of the current consolidated fiscal year as economic and social activities
normalized. However, concerns remained about a future economic slowdown due to soaring resource prices caused by the prolonged situationin Ukraine and the impact of monetary tightening policies, mainly in Europe and the United States.
As an overview of the regions in which our group does business, in Greater China, economic activity and the economy began to recover after
the repeal of the Zero-COVID Policy. The pace of recovery is slowing now, however, due to sluggish exports caused by the global economic
slowdown. In the Americas, employment growth and personal consumption have been resilient, but monetary tightening restrained demandand contributed to an economic slowdown. In ASEAN, the pace of growth in each country slowed due to sluggish growth in external demand
as a result of the slowdown in the global economy. Pressure on household and domestic business demand due to high prices and rising interest
rates also had a negative impact. In Japan, social activities are gradually recovering as measures against COVID-19 have been largely left toindividual judgment. Personal consumption is increasing, particularly in the services sector, while inbound demand is also recovering in thewake of the elimination of border control measures and business sentiment is recovering gradually.
In this environment, earnings for the cumulative consolidated first quarter of the current fiscal year are as follows.
(Millions of yen)Three-month period Three-month period
ended
ended
ChangeChange (%)
June 30, 2022
June 30, 2023
Net sales

219,571224,062

4,491

2.0

Gross profit

39,90438,707(1,197)(3.0)

Operating income

10,871

6,955(3,915)(36.0)

Ordinary income

11,542

7,338(4,203)(36.4)

Profit before income taxes
Profit attributable to owners

11,4386,412(5,025)(43.9)

7,969
4,367(3,601)(45.2)of the parent
・Although net sales for the first quarter of the current consolidated fiscal year increased due in part to the weakening yen, gross profit margin
declined due to lower profitability among certain manufacturing subsidiaries, etc., resulting in lower gross profit.
・Operating income declined due to a decrease in gross profit and an increase in selling, general and administrative expenses. For details,
see b. Segment Summary.
・Profit attributable to owners of the parent decreased ¥3.6 billion to ¥4.3 billion, mainly due to the increase in interest expenses and loss on
valuation of investment securities as well as the decrease in in operating income.

b.

Segment Summary

The following describes performance by segment.
Functional Materials(Millions of yen)Three-month period
endedJune 30, 2022

Three-month period
endedJune 30, 2023

Net sales

28,65426,026(2,628)(9.2)

Gross profit

5,816

5,137

(678)

(11.7)

Operating income

2,388

1,620

(767)

(32.1)

Change・Sales decreased for coating materials.
・Sales decreased for raw materials for industrial oil solutions and resins
・Sales decreased for raw materials for the electronics industry, including semiconductor-related products・Operating income decreased due to a decrease in gross profit

2

Change (%)

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2024

Advanced Materials & Processing(Millions of yen)Three-month period
endedJune 30, 2022

Three-month period
endedJune 30, 2023

Net sales

65,131

58,974(6,157)(9.5)

Gross profit

8,161

6,746

(1,414)(17.3)

Operating income

2,599

1,247

(1,351)(52.0)

ChangeChange (%)

・Resin sales declined due to lower demand in the office equipment, appliance, and video game device market and the impact of inventory
adjustments by customers
・Sales of pigments and additives remained sluggish
・Sales of digital print processing materials were lower, as was profitability in the manufacturing business・Operating income decreased due to a decrease in gross profit
Electronics & Energy(Millions of yen)Three-month period
endedJune 30, 2022

Three-month period
endedJune 30, 2023

Net sales

33,93335,5381,605

4.7

Gross profit

7,893

7,720

(172)

(2.2)

Operating income

2,617

2,320

(296)

(11.3)

ChangeChange (%)

・Despite weakening semiconductor market conditions, sales of materials to the semiconductor industry increased due to product line
expansion・ While demand for formulated epoxy resins increased for server applications, performance was lower overall due to a decline insemiconductor-related and electronics-related products for mobile device applications
・Sales related to photolithography materials for display applications are recovering but remained sluggish
・Operating income decreased due to a decrease in gross profit
Mobility(Millions of yen)Three-month period
endedJune 30, 2022

Three-month period
endedJune 30, 2023

Net sales

27,01831,136

4,118

15.2

Gross profit

3,215

3,414

198

6.2

932

947

14

1.5

Operating income

ChangeChange (%)

・Sales increased for resins due to the boosted automobile production.
・Sales increased for functional materials and functional components for interior and exterior fittings and electrification
・Operating income increased due to an increase in gross profit
Life & Healthcare(Millions of yen)Three-month period
endedJune 30, 2022

Three-month period
endedJune 30, 2023

Net sales

64,814

72,386

7,571

11.7

Gross profit

14,796

15,636840

5.7

Operating income

4,144

3,254

(890)

(21.5)

ChangeChange (%)

・Prinova Group profitability and sales declined due to a drop in the market for food ingredients・Sales of Hayashibara’s AA2G™ and other cosmetics materials increased in response to higher demand
・Sales increased for pharmaceutical raw materials and intermediates
・Operating income decreased, despite higher gross profit, as food ingredient sales profitability declined at the Prinova Group where
personnel expense and other selling, general and administrative expenses increased and profit contribution from the new Utah plant wasdelayed3

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2024

OthersNo special matters to disclose.

(2) Review of Financial Positiona.

Assets, Liabilities and Net Assets
Prior Consolidated
Fiscal Year
(March 31, 2023)

First Quarter, Current
Consolidated
Fiscal Year
(June 30, 2023)(Millions of yen)
ChangeChange (%)

Current assets

530,132

533,659

3,526

0.7

Non-current assets

232,556

241,148

8,592

3.7

Net assets

762,688774,807

12,119

1.6

Liabilities

384,300

389,539

5,238

1.4

Net assets

378,388385,268

6,880

1.8

48.2

48.3

+ 0.1 p－Shareholders’ equity ratio (%)

・Current assets slightly increased mainly due to an increase in accounts receivable, despite a decrease in inventories, etc.
・Non-current assets increased due to an increase in property, plant and equipment and the fair values of investments in securities
・Liabilities increased mainly due to an increase in commercial paper and accounts payable, despite a decrease in short-term loans
・Net assets increased mainly due to an increase in net unrealized holding gain on securities and translation adjustments, despite decreases
from purchases of treasury stock
・As a result, the Company recorded a shareholders’ equity ratio of 48.3%, up 0.1 points compared to 48.2% from the end of the priorconsolidated fiscal year(3) Qualitative Information Related to Consolidated Earnings Forecasts
We made no changes to the consolidated earnings forecast for the current fiscal year (April 1, 2023 to March 31, 2024) from the figuresannounced on May 9, 2023.

4

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2024

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheets
Prior Consolidated Fiscal Year
(March 31, 2023)
ASSETS
Current assets
Cash and time deposits
Notes and accounts receivable and contract assets
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

5(Millions of yen)First Quarter, Current
Consolidated Fiscal Year
(June 30, 2023)

40,897302,105
152,504
2,446
14,77018,429(1,021)
530,132

42,450306,224
145,515
2,814
13,86523,656(867)
533,659

82,064

83,19929,004
4,337
35,58768,92828,9603,943
36,586
69,48969,743
17
2,645
3,857
5,475
(176)
81,562
232,556
762,688

76,783
29
2,699
3,678
5,446
(176)
88,459241,148774,807

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2024

Prior Consolidated Fiscal Year
(March 31, 2023)
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
Lease liabilities
Deferred tax liabilities
Retirement benefit liability
Provision for directors’ stock benefit
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 (loss) 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

6(Millions of yen)First Quarter, Current
Consolidated Fiscal Year
(June 30, 2023)

140,438
66,117
1,056
38,000
2,913
6,985
371
30,321
286,203

146,527
60,0852,962
43,000
2,956
3,534
78
31,069290,21430,00032,697
9,763
10,36013,19765
2,012
98,097384,300

30,00031,285
10,995
11,536
13,08173
2,351
99,324
389,539

9,699
10,636290,279(1,550)309,064

9,699
10,635289,951(4,840)305,446

28,928(7)30,414(726)
58,61010,713378,388762,688

34,262296
34,692(562)
68,688
11,133385,268
774,807

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2024

(2) Quarterly Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)Three-month periods ended June 30, 2023 and 2022

(Millions of yen)Three-month period ended
June 30, 2022
(April 1, 2022 - June 30, 2022)

Three-month period ended
June 30, 2023
(April 1, 2023 - June 30, 2023)

219,571
179,666
39,90429,033
10,871

224,062
185,355
38,70731,751
6,955

18
672
62
83
328
186
1,352

49
689
60
79
450
127
1,456

490
191
681
11,542

961
112
1,074
7,338

123
43
－
－
166

38
129
228
47
444

3
179
7
79
－
270
11,438
3,194
8,244
275
7,969

0
451
21
864
31
1,369
6,412
1,870
4,541
174
4,367

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
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on sales of non-current assets
Gain on sales of investment securities
Subsidy income
Other
Total extraordinary gains
Extraordinary losses
Loss on sales of non-current assets
Loss on disposal of non-current assets
Loss on sales of investment securities
Loss on valuation of investments securities
Other
Total extraordinary losses
Income before income taxes
Income taxes
Profit for the period
Profit attributable to non-controlling interests
Profit attributable to owners of the parent

7

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2024

(Quarterly Consolidated Statements of Comprehensive Income)Three-month periods ended June 30, 2023 and 2022

(Millions of yen)Three-month period ended
June 30, 2022
(April 1, 2022 - June 30, 2022)

Three-month period ended
June 30, 2023
(April 1, 2023 - June 30, 2023)

8,244

4,541

(1,582)
333
9,542
43

5,331
303
4,216
163

466

309

8,802
17,047

10,324
14,866

16,112934

14,446
420

Profit for the period
Other comprehensive income
Net unrealized holding (loss) gain on securities
Deferred gain on hedges
Translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive gain 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

8

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2024

(3) Notes Related to Quarterly Consolidated Financial Statements(Assumption for Going Concern)
No matters to report.
(Change in Accounting Policy)(Adoption of U.S. FASB Accounting Standards Codification (ASC) No. 326, Financial Instruments-Credit Losses)
Certain foreign consolidated subsidiaries that adopted U.S. GAAP apply ASC No. 326, Financial Instruments-Credit Losses,
beginning with the current consolidated first quarter. As a result, the subsidiaries in question are required to revise the methods
used to measure financial instruments and recognize impairment of financial assets using the expected credit loss model.
In applying this accounting standard, the subsidiary recognized the cumulative effect as of the date of adoption, which ispermitted under the transitional provisions.
The impact of this accounting treatment on the quarterly consolidated statements of income is immaterial.
(Significant Fluctuations in Shareholders’ Equity)
Following a resolution by the Company’s board of directors at a meeting held May 9, 2023, the Company acquired 1,388,600
shares of treasury stock in the cumulative first quarter of the current consolidated fiscal year. As a result, treasury stock increasedby ¥3,289 million, with treasury stock holdings of ¥4,840 million as of the end of the consolidated first quarter.
(Special Accounting Treatment Applied in the Preparation of Quarterly Consolidated Financial Statements)(Calculation of Tax Expenses)
Tax expenses are calculated by rationally estimating an effective tax rate after applying tax effect accounting to profit before
income taxes for the consolidated fiscal year, including the current first quarter, and multiplying profit before income taxes forthe first quarter by the estimated effective tax rate.
In the event that the calculated tax expenses using this estimated effective tax rate lead to significantly unreasonable results, thisshall be calculated by multiplying the statutory effective tax rate after adjusting significant non-temporary differences by the
profit before income taxes.
Deferred income taxes are included in income tax.
(Additional Information)(Stock-Based Compensation Plan)
Effective as of the previous consolidated fiscal year, the Company has adopted a stock-based compensation plan (“Plan”) for
directors (excluding outside directors) and executive officers (collectively, “Eligible Individuals”). The purpose of the Plan is toestablish a clear link between compensation for Eligible Individuals and Company performance and share value, as well as for
Eligible Individuals to share the benefits and risks associated with fluctuations in NAGASE share price with shareholders. In
this way, the NAGASE Group intends to raise awareness about contributing to improved business performance and increased
corporate value over the medium to long term.
(1) Overview
The Plan is a stock-based compensation plan under which a trust ("Trust") established by monetary contribution from theCompany acquires Company shares. The Company grants points to each Eligible Individual, and the Trust delivers the numberof Company shares equivalent to the points earned by each Eligible Individual. In principle, said delivery is made at the time of
the retirement the Eligible Individual.
(2) Company shares remaining in the Trust
Company shares remaining in the Trust are recorded as treasury stock under net assets in the balance sheet based on the carrying
value in the Trust (excluding incidental expenses). The carrying value of said treasury stock as of the end of the consolidated
first quarter was ¥619 million and the treasury stock in question amounted to 292,200 shares.

9

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2024

(Segment Information, etc.)

Segment Information
I Three-month period ended June 30, 2022 (consolidated)
1. Information related to net sales and income (loss) by reportable segment
Reportable Segments
Advanced
Functional
Electronics &Life &
Materials &Mobility
EnergyMaterials
Healthcare
Processing

Total(Millions of yen)
Others(Note) 1

Total

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

Net sales
Sales tocustomers
Intersegment
sales/transfers

28,654

65,13133,93327,01864,814

219,55318

219,571－－219,571

283

198

284

386

128

1,282

1,372

2,654

－

(2,654)－

Total

28,93765,32934,21827,40564,943

220,835

1,391

222,226－(2,654)

219,571

Segment income(loss)

2,388

2,599

2,617

932

4,144

12,682(13)

12,668(1,982)

185

10,871(Note) 1.

“Others” is a business segment consisting of businesses not included in Reportable Segments, and includes information
processing services and professional services.

2.
3.

Corporate segment income (loss) represents expenses not allocated to Reportable Segments or Others.
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, 2023 (consolidated)
1. Information related to net sales and income (loss) by reportable segment
Reportable Segments
Advanced
Functional
Electronics &Life &
Materials &Mobility
EnergyMaterials
Healthcare
Processing

Total(Millions of yen)
Others(Note) 1

Total

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

Net sales
Sales tocustomers
Intersegment
sales/transfers

26,02658,97435,53831,136

72,386224,0620

224,062－－224,062

188

164

922

852

197

2,326

1,837

4,163

－

(4,163)－

Total

26,214

59,13836,461

31,98972,548226,3881,837

228,226－(4,163)224,062

Segment income(loss)

1,620

1,247

2,320

947

3,254

9,390

92

9,482

(2,644)

117

6,955

(Note) 1.

“Others” is a business segment consisting of businesses not included in Reportable Segments, and includes information
processing services and professional services.

2.
3.

Corporate segment income (loss) represents expenses not allocated to Reportable Segments or Others.
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”.

10