Financial Highlights

NAGASE&CO.,LTD.
February 9, 2022

Copyright © 2022 NAGASE & CO., LTD.

I D E N T I F Y >>> D E V E L O P >>> E X P A ND

FYE March 2022 Third 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■ FYE March 2022 Earnings Projection P14～P15■ Shareholder Returns

Copyright © 2022 NAGASE & CO., LTD.

P16

Consolidated statements income▶ Gross profit
・ Higher profit in all segments, with all stages of profit below gross profit once again reaching record highs for the cumulative thirdquarter after achieving the same in the second quarter・ In particular, the automobile-related business, resins and electronics-related businesses, as well as the Prinova Group's nutritionrelated business performed well
▶ Operating income
・ Income greatly increased year-on-year with increases in gross profit; the economic impact of the COVID-19 epidemic had beensignificant in the same period of the previous year▶ Profit attributable to owners of the parent
・ Income increased due to significant income increase in stages up to ordinary income despite decrease in gain on sales of crossshareholdings
100 millions of yen

20/12

21/12

ChangeVs.PY

Forecast（Full year)

Achievement

Sales

4,539

5,741+ 1,201

126%

ーー

Gross profit

837

1,041+ 203

124%

1,300

80%

<GP ratio>

18.4%

18.1%

(0.3pt)－ー－SG&A expenses

676

759+ 83112%

1,000－

160281+ 120

175%

30094%

171301+ 130176%

31097%

165222+ 56134%

22599%@ 106.1@ 111.1@ 5.0 Weak yen@109.5@ 15.4@ 17.3@ 1.8 Weak yen

＠16．9

Operatingincome
OrdinaryincomeProfit attributableto owners of theparent
US$ Exchange rate
(period average)
RMB Exchange rate
(period average)※ Offset to sales and cost of sales from application of revenue recognition standards: Dec. 2020, -¥150.5 billion; Dec. 2021, -¥181.7 billion※ Impact from foreign exchange: Gross profit, +¥2,000 million; Operating income, +¥600 million
Copyright © 2022 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)
100%

1,200

1,000

600

Overseas371
Overseas
ratio
44.3%

550
Total 502

Total 1,041

90%

500

Overseas
502

80%

450

70%

400

Total 837800

Overseas gross profit By Region(100 millions of yen)

Oveseasratio
48.3%60%350

Total 371
Europe46250

Americas13020030%

Domestic
538

15020%10%0%020/12

21/12

Other
6Americas
174

300

400200Europe5950%
40%

Domestic
466

Other
8

ASEAN
65

10050

ASEAN
93

Greater
China
121

GreaterChina
166

020/12

21/12※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 © 2022 NAGASE & CO., LTD.

4

Gross Profit By Business & Segment▶ Higher profits in all segments, with a cumulative third 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.
Gross Profit By Business & Segment (100 millions of yen)

Total 1,041

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

Total 1,041

1,000

Total 837
800

600

Manufacturing408

Total 837

Life &Healthcare
283

Manufacturing
356

Mobility 61

400

200

Trading &Other
480

Trading &Other
633

Electronics& Energy
181
Advanced
Materials& Processing
195
Functional
materials
1120Life &Healthcare
329

Mobility 93

Electronics& Energy
225

21/12

History of Gross Profit(100 millions of yen)
400

Advanced
Materials& Processing
245
Functional
materials
147

By BusinessBy Business

By Segment

By Segment

20/12

21/12

20/12

21/12

Copyright © 2022 NAGASE & CO., LTD.

20/12

300345260353341277

299308

200
10000
Q1

Q2

21/03

Q3

22/03

Q4

5

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 third quarter▶ we continue to invest for sustainable future growth, including in DX-related areas▶ Operating income ratio decreased for the third quarter versus the first and second quarters due to increased general andadministrative expenses and other factors
Operating Income by Business & Segment(100 millions of yen)

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

Total 281
300

Manufacturing
93

240

180

12060

Total 160
Manufacturing
66

Total 160
Electronics &Energy
79

20/12

Mobility 11

Trading& Other
187

Trading& Other
94

By Business
20/12

Mobility 31

Life &Healthcare
510(60)Life &Healthcare
73

Total 281

By Business
21/12

Copyright © 2022 NAGASE & CO., LTD.

Electronics &Energy
58
Advanced
Materials& Processing
52
Functionalmaterials
33
Corporate&Others(45)

By Segment
20/12

AdvancedMaterials& Processing
88

21/12

History of Operating Income(100 millions of yen)
97

10097
867180Functionalmaterials
59

40
Corporate&Others(51)

By Segment
21/12

58526036

20001Q

２Q

21/03

3Q

4Q

22/03

6

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）

Total 59

60

20
Manufacturing 945

20

191815
1313

Total 33
1030

15

Manufacturing 3

10Trading &Other50

Trading &Other30

85001Q

020/12

２Q

4Q

21/12

21/03

Copyright © 2022 NAGASE & CO., LTD.

3Q

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 88
3280

Manufacturing 3

3130

2460
Total 52

Manufacturing 2

40

20

20
Trading &Other
85

20
1715

14

Trading &Other
50

000
20/12

21/12

1Q

２Q

21/03
Copyright © 2022 NAGASE & CO., LTD.

3Q

4Q

22/03

8

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▶ Establishing a structure for next-generation communications-related business, aiming for medium- to long-term growth
despite upfront development costs

History of operating income （100 millions of yen）

Operating income by business（100 millions of yen）
Total 798060

Total 58

2930

25

Manufacturing
2725
24

24

2040

Manufacturing26

16

Trading &
Other
52
20

16

10

Trading &
Other
32

00

0
20/12

21/12

1Q

２Q

21/03
Copyright © 2022 NAGASE & CO., LTD.

3Q

4Q

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）

11

Total 31
1030

10
98
720

76
Trading &Other31

43

Total 11210
Trading &Other
1100(1)(2)

020/1221/12

1Q

２Q

21/03
Copyright © 2022 NAGASE & CO., LTD.

3Q

4Q

22/03

10

Life & Healthcare 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 raw
materials 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）
30

80
Total 73

2723
2260

21
Total 51

20
Manufacturing
54

16

40
13

Manufacturing
36

13

1020

Trading &Other
15

Trading &Other
19
00

0

20/12

21/12

1Q

２Q

21/03
Copyright © 2022 NAGASE & CO., LTD.

3Q

22/03

4Q

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

20/12
Nagase ChemteX
Corporation

HayashibaraCo.,Ltd.

Vs.PY

18822133118%

Gross profit

596910117%

Operating income

24327129%

Sales

179

200

21112%

Gross profit

75816108%

Operating income

32342108%Goodwill amortization etc.

2323-100%

9112128%656
12537857
16055

2013417131%
128%
148%

Goodwill amortization etc.

14140101%

Operating income after
amortization burden

2240

17179%

Sales
Gross profit
Operating income

Copyright © 2022 NAGASE & CO., LTD.

ChangeSales

Operating income after
amortization burden

Prinova Group

21/12

12Consolidated Balance Sheets▶ Current assets: Accounts receivable and inventories increased due to favorable performance (working capital increased)▶ Net assets : Shareholders' equity increased 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 0.31 with increase in short-term borrowings due to demand for funds from increased working capital
100 millions of yen

21/03

21/12

ChangeDetailesTotal Current Assets

4,017

4,863

846

(Cash&deposits)

492

488

(4)

2,425

2,890

464

972

1,359

387

2,388

2,389

0937

894

(42)

Total assets

6,405

7,253

847

Current Liab.

2,061

2,882

821960821(138)

Total Liab.

3,021

3,704

682

Shareholders' equity

2,847

2,961

113 Purchase of treasury stock(49)

449

482

33

87

104

173,384

3,548

164

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

Non-current Liab.

Accum. Other Comprehensive Income
Non-controlling interest
Total net assets

Working capital

2,198

2,741

Shareholders' equity ratio

51.5%

47.5%

0.23

0.31

NET D/E ratio

Copyright © 2022 NAGASE & CO., LTD.

Short-term loans/CP+414、Current Portion of Bonds+100

Translation adjustment+74、Appraisal Loss on Investment Securities(38)13

FYE March 2022 Earnings Projection▶ Overall consolidated earnings for the cumulative third quarter showed significant income increases versus the same period of the previous year,
due to increased profitability in the resins business thanks to rising market conditions, as well as strong performance in the Prinova Group’s
nutrition-related business and in the electronics-related business▶ We expect that earnings levels will exceed the revised forecast announced in the first quarter, particularly focusing on the resins business,
automobile-related business and electronics-related business▶ We expect earnings for the full year to exceed the forecast announced in the first quarter of FYE March 2022, despite forecasting a decline inprofitability in the resins business in the fourth quarter and an increase in general and administrative expenses amid strong earnings(another upward revision of the full-year earnings forecast following the first quarter)

100 milｌions of yen

21/03
Actual22/03
Previous forecast

22/03
Revised forecast

ChangePercent
ChangeGross profit

1,146

1,300

1,380

80

6.2%

SG&A expenses

926

1,0001,030

303.0%

Operating income

219

300

350

5016.7%

Ordinary income

228

310

365

55

17.7%

Profit attributable toowners of the parent

188

225

250

2511.1%US$ Exchange rate
(period average)@ 106.1

＠ 109.5@ 111.9

RMB Exchange rate
(period average)@ 15.7@ 16.9@ 17．4

Copyright © 2022 NAGASE & CO., LTD.

14

FYE March 2022 Earnings Projection(By segment)▶ In our full-year forecast for the resins business, we expect earnings to be higher than the previous forecast despite the current
slowdown caused by degrading market conditions▶ The electronics-related and automobile-related businesses also trend above the previous forecast, thanks mainly to increased
demand for digital devices due to lifestyle changes▶ We expect that operating income for the full year will mark significantly higher record highs (previous high: ¥25.2 billion in FYEMarch 2019) despite an expected increase in general and administrative expenses due to strong business performance in thefourth quarter and declining profitability in the resins business in the Advanced Materials & Processing Segment

100 millions of yen
22/03
22/03
Previous forecast Revised forecast21/3 Actual
Functional materials

Gross profit

155

177

195

1810.2%

Operating income

4766

78

1218.2%

268

295

319

248.1%

73

96

108

1212.5%

255

274

298

248.8%

Operating income

84

88

100

1213.6%Gross profit

89112

124

1210.7%

Operating income

1834

41

720.6%

374

437

439

20.5%

659393ーー

155ーー

Operating income

(68)

(77)

(70)

7ー

Gross profit

1,146

1,300

1,380

80

6.2%

219

300

350

50

16.7%

Advanced Materials& Processing

Gross profit

Electronics& Energy

Gross profit

MobilityLife & Healthcare

Corporate&Others

TotalCopyright © 2022 NAGASE & CO., LTD.

Percent
ChangeChangeOperating income

Gross profit
Operating income
Gross profit

Operating income

15

Shareholder Returns▶ Increasing year-end dividend forecast in response to strong earnings performance exceeding initial expectations (adding a special
dividend of ¥6, with a year-end dividend of ¥30, resulting in a full-year dividend including interim dividends of ¥54 per share)▶ Completed repurchases of treasury stock of ¥6 billion as resolved in February 2021; resolved a new repurchase of ¥6 billion oftreasury stock (planned repurchase period: February 2022 to February 2023)

Total Dividend

Stock buy-backTotal Payout ratio

millions of yen％
12,49351.0
12,000

50.0
50.0
39.5

10,000
34.9

33.7

8,000

35.6

6,000

5,269

4,943

2,000

1,649

3,557

3,811

35.2

5,979

4,064

1,776

7,186
6,643

1,956

5,456

30.0

952

1,107

20.0

5,023

5,230

5,456

5,691

6,514
10.0

3,295

3,557

3,811

4,064

4,162

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

¥54

0.0

0

Dividend pershare

40.0

33.0

30.5
6,799

4,00036.0※ 18/03 year-end dividend include a special dividend of ¥5 per share.
※ 22/03 year-end dividend will include a special dividend of ¥6 per share.
※ 22/03 year-end dividend to be submitted for approval to the 107th general meeting of shareholders scheduled for June 2022.
Copyright © 2022 NAGASE & CO., LTD.

16

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

These presentation materials contain projections based on forward-looking
assumptions, forecasts, and plans as of February 9, 2022.
Actual earnings may differ from projections due to risks and uncertainties in
the future global economy, competitive landscape, currency exchange rates,etc.

Copyright © 2022 NAGASE & CO., LTD.