Financial Highlights

NAGASE&CO.,LTD.
November 4,2022

Copyright © 2022 NAGASE & CO., LTD.

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

FYE March 2023 Second Quarter

Contents■ Consolidated Statements Income

P3■ 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 2023 Earnings Projection■ Shareholder ReturnsCopyright © 2022 NAGASE & CO., LTD.

P15～P16P17

Consolidated statements income▶ Gross profit
・ Overall profit increased, despite lower gross profit margin due to lower profitability at certain manufacturing subsidiaries, etc.
▶ Operating income
・ Selling, general and administrative expenses increased due to higher logistics costs and increased activities; however,
the increase in gross profit exceeded this increase in expenses, resulting in higher operating income▶ Profit attributable to owners of the parent
・ Profit increased, despite decrease in ordinary income, due partly to a decrease in tax expenses

100 millions of yen

21/09

22/09

ChangeVs.PY

Forecast（Full year）

Achievement

Sales

3,737

4,555

+ 817

122%

ーー

Gross profit

687

793

+ 106

115%

1,590

50%

<GP ratio>

18.4%

17.4%

(1.0pt)－ー－

SG&A expenses

492

594

+ 102

121%

1,210－

194

198+3102%

38052%

204

202

(1)

99%

39052%

146

155+9107%

28555%@ 109.8@ 134.0@ 24.2 Weak yen@120.0@ 17.0@ 19.9@ 2.9 Weak yen@18.5

Operatingincome
Ordinaryincome
Profit Attributableto owners of theparent
US$ Exchange rate
(period average)
RMB Exchange rate
(period average)※ Offset to sales and cost of sales from revenue recognition standards: September 2021, -¥117.1 billion; September 2022, -¥133 billion※ Impact from foreign exchange: Gross profit, +¥6 billion; Operating income, +¥1.9 billion

Copyright © 2022 NAGASE & CO., LTD.

3

Gross Profit By Region▶ Higher profit both domestic and overseas▶ Domestic profit increased due to higher sales of precision-processing products and electronics chemicals for the semiconductorindustry▶ Overseas profit increased due to strong performance of the Prinova Group in the Americas and Europe, and an increase in Greater
China, despite the lockdowns, due to the weaker yen

Overseas gross profit By Region(100 millions of yen)Domestic & Overseas Gross profit(100 millions of yen)
Total 793

800

700

600

500

400

Total 687

Overseas437

Overseas334

Overseasgross profit
ratio
48.7%

100%

450

Total 437

90%

400

Europe6180%

Overseasgross profit
ratio
55.2%

70%

350

Total 334300

Europe
3860%
250
50%

Other
6

Other
5

Americas172

Americas
115

200
40%

300

15030%200

Domestic
352

Domestic35520%ASEAN
61

ASEAN
75

100
GreaterChina
113

Greater
China
122

21/09
22/09
21/09
※Domestic figures under Domestic & Overseas Gross Profit include inter-regional adjustments

22/09

1000Copyright © 2022 NAGASE & CO., LTD.

10%

500%

04

Gross Profit By Business & Segment▶ Functional Materials sales increased in areas like electronics chemicals for the electronics industry, including semiconductor-relatedproducts▶ Profit decreased in part due to lower profitability in Advanced Materials & Processing, despite the positive impact of the weak yen,
as sales volume of resins declined and the segment experienced a reactionary decline stemming from increased profit ratios inconnection with soaring market conditions in the year-ago period▶ Electronics & Energy sales increased for products related to precision processing materials for semiconductors▶ Life & Healthcare sales were strong for nutritional materials and manufacturing and processing in the Prinova Group

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

Gross Profit By Business & Segment (100 millions of yen)
Total 793

800700600

500

Total 687

Manufacturing
270

Total 687
Manufacturing325400Electronics &Energy147

300

200

Life &Healthcare
218

Mobility
59

Trading &Other
417

Life & Healthcare
66

Total 793

Trading &Other
468

100

Life &Healthcare
285

Advanced
Materials &Processing
(1)

687

Mobility
72

22/09

2１/09
Electronics &Energy
157

Advanced
Materials& Processing
164

Advanced
Materials& Processing
163

History of Gross Profit(100 millions of yen)

400

345

394
341

353

353

300
200

Functional
Materials
114

By Business

By Business

By Segment

By Segment

21/09

22/09

21/09

22/09

Copyright © 2022 NAGASE & CO., LTD.

Electronics Mobility& Energy129399Functional
Materials
950FunctionalMaterials
19793

Corporate&Others(0)

100000
1Q

2Q
22/03

3Q

4Q

23/03

5

Operating Income by Business & Segment▶ Selling, general and administrative expenses increased due to higher logistics costs and increased activities; however, the increase ingross profit exceeded this increase in expenses▶ Advanced Materials & Processing recorded lower profit, partly due to a reactionary decline from the stemming from increased profit
ratios in connection with soaring market conditions in the year-ago period, as well as higher selling, general and administrativeexpenses▶ Life & Healthcare recorded a significant increase due to strong sales of nutritional materials by the Prinova Group▶ 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)
Total 198

240200Life & Healthcare
16Total 194

Total 194

Total 198

Life &Healthcare
50

FunctionalMaterials
6

Life &Healthcare
66

198
Corporate&Others
(6)

194

160

Manufacturing
64

Manufacturing
69Electronics &Energy
54

120

80

Mobility
20

Trading &Other
130

Trading &Other129AdvancedMaterials& Processing
64(40)By Business
21/09

By Business
22/09

Advanced
Materials &Processing(14)

Electronics &Energy
51

AdvancedMaterials& Processing
50

22/09

2１/09

History of Operating Income(100 millions of yen)
120
100

400Electronics& Energy Mobility
4(3)Mobility24

Functional
Materials
38

Functional
Materials
45

80

Corporate&Others(33)

Corporate&Others
(40)

40

By Segment
21/09

By Segment
22/09

0108
97

97

90

71

60

2001Q

3Q

２Q
22/03

Copyright © 2022 NAGASE & CO., LTD.

86

23/03

04Q

6Functional Materials Segment Operating Income Overview▶ Sales increased for coating and urethane raw materials, due in part to soaring market prices and the weakening of the yen▶ Sales increased in areas like electronics chemicals for the electronics industry, including semiconductor-related products, as well as
for raw materials for industrial oil solutions and resins▶ Profit increased year on year due to steady demand, mainly from semiconductor-related industries, market conditions, and the impactof the weaker yen

Operating income by business（100 millions of yen）

History of operating income （100 millions of yen）

2523

Total 4545Total 38

Manufacturing
521
202019Manufact
uring
61830

151815

Trading &Other
32

Trading &Other
39

10

500
21/09

22/09

1Q

２Q
22/03

Copyright © 2022 NAGASE & CO., LTD.

003Q
23/03

4Q

7

Advanced material & Processing Segment Operating Income Overview▶ Despite the impact of the weak yen on resin sales to the office equipment, appliance, and video game device market, profitability
decreased due to a reactionary decline stemming from increased profit ratios in connection with soaring market conditionsin the year-ago period▶ Digital print processing materials sales were weak due to sluggish demand▶ Profit was lower year on year due to a decrease in resin sales, lower profitability in our manufacturing businesses, and an increase inselling, general and administrative expenses

History of operating income （100 millions of yen）

Operating income by business（100 millions of yen）

32
Total 64

3130

Manufacturing
125

24

Total 50

2419

Trading &
Other
63

15
Trading &Other
51

Manufacturing
(1)

21/09

22/09

01Q

3Q

２Q
22/03

Copyright © 2022 NAGASE & CO., LTD.

004Q

23/03

8Eｌectronics & Energy Segment Operating Income Overview▶ Sales increased for products related to precision processing materials for semiconductors▶ Sales of formulated epoxy resins was strong for semiconductor applications, but slow for mobile devices▶ We are aiming for medium- to long-term growth after upfront development costs for a next-generation telecommunications-related
business▶ Profit decreased year on year due to continued weak sales of formulated epoxy resins for mobile devices

History of operating income （100 millions of yen）

Operating income by business（100 millions of yen）
602930Total 54
Total 51

2625

Manufacturing
1925
24

Manufacturing
1223402020

Trading &Other
35

Trading &Other
39

100000
21/09

22/09

1Q

22/03
Copyright © 2022 NAGASE & CO., LTD.

3Q

２Q

4Q

23/03

9

Mobility Segment Operating Income Overview▶ Sales increased for resins, mainly due to an increase in automobile production and the impact of the weakening yen▶ Sales increased in functional materials and functional components for interior and exterior fittings and electrification▶ Higher gross profit led to higher profit year on year

Operating income by business（１００ millions of yen）

History of operating income （100 millions of yen）
16

15

Total 24
14
Total 201220

11101010

Trading &Other
20

Trading &Other249109864

200

00
21/09

22/09

1Q

22/03
Copyright © 2022 NAGASE & CO., LTD.

3Q

２Q

4Q

23/03

10

Life & Healthcare Segment Operating Income Overview▶ Sales of Prinova Group nutrition-related materials were strong and profitability improved▶ Sales of food ingredients (mainly TREHATM) and pharmaceutical raw materials increased; however, sales of cosmetics materials (mainlyAA2GTM) decreased due to lower demand overseas and other factors▶ Quarterly profit declined due to slackening supply-demand conditions in the Prinova Group business; however, profit remained strong
and increased compared to the year-ago period

History of operating income （100 millions of yen）

Operating income by business（100 millions of yen）

Total 66

414060Total 5030
2725

Manufacturing
53

40

23

2220

Manufacturing
37

20

20
10
Trading &Other
13

Trading &Other
130000
21/09

22/09

1Q

22/03
Copyright © 2022 NAGASE & CO., LTD.

3Q

２Q

4Q

23/03

11

State of Major Manufacturing Subsidiaries▶ Nagase ChemteX: Lower profit, despite strong semiconductor-related sales, due to weak sales of formulated epoxy resins for use inmobile devices▶ Hayashibara: Lower profit due to lower sales of cosmetic material AA2GTM and lower profitability of food material TREHATM, stemmingfrom higher raw materials and energy prices▶ Prinova Group: Higher profit due to higher sales of nutrition-related materials stemming from increased demand, as well as improved
profitability

100 millions of yen21/09
Nagase ChemteX
Corporation

Hayashibara
Co.,Ltd.

Prinova Group

ChangeVs.PY

Sales

146135(10)93%Gross profit

4738(9)80%

Operating income2311(12)

49%

Sales

1301388107%

Gross profit

5453(0)98%

Operating income

2320(2)

87%

Goodwill amortization etc.

1515‐

100%

Operating income after
amortization burden

74(2)

62%

Sales

557

950

392

170%

Gross profit

106

166

60

157%

Operating income

3757

20153%

9111114%274618167%

Goodwill amortization etc.
Operating income after
amortization burden

Copyright © 2022 NAGASE & CO., LTD.

22/09

12Consolidated Balance Sheets▶ Current assets: Increase in working capital due to overall strong performance▶ Net assets: Increase, despite dividend payments and share buyback, due to profit for the period and an increase in foreign currencytranslation adjustments due to the weaker yen▶ NET D/E ratio: Increased to 0.41 times due to an increase in interest-bearing debt resulting from higher demand for cash in connection
with an increase in working capital

100 millions of yen

22/03

22/09

ChangeDetailesTotal Current Assets

5,142

5,677

534

(Cash&deposits)

542461(80)(Trade account receivbable)

2,898

3,164

266

(Inventories)

1,575

1,864

289

2,254

2,341

87

756

724

(31)

Total assets

7,397

8,019

622

Current Liab.

3,078

3,285

207

1,490

1,523

33

767

897

Total Liab.

3,846

4,182

336

Shareholders' equity

2,988

3,073

85

Accum. Other Comprehensive Income

454

652

197

Non-controlling interest

108

111

2

Total net assets

3,550

3,836

285

Working capital

2,983

3,505

522

Shareholders' equity ratio

46.5%

46.5%

(0.０%)

0.33

0.41

0.09

Total non-current assets(Investments in security)(Trade account payable)
Non-current Liab.

NET D/E ratio

Copyright © 2022 NAGASE & CO., LTD.

Short-term loans/CP+310,
Current Portion of Bonds(100)129 Corporate Bonds+100

Translation adjustment+218,
Appraisal Loss on Investment Securities(2５)13Consolidated Cash Flows▶ Operating CF : Net cash used of ¥17.9 billion as working capital increased due to strong business performance▶ Investing CF : Net cash used of ¥5.9 billion due to purchases of property, plant and equipment, etc., offset in part by proceeds from salesof investments in securities▶ Financing CF : Net cash provided of ¥11.5 billion, mainly due to an increase in interest-bearing debt in connection with an increase inworking capital, offset in part by payments of dividends and purchases of treasury stock

100 millions of yen

21/09

22/09

Operating CF

(136)

(179)

Investing CF

(49)

(59)

Free CF

(185)

(239)

144

115

347

(38)

(76)

68

71

(75)

(83)

(327)

(295)

Financing CF
Effects of exchange rate changes on cash andcash equivalents
Net change in cash and cash equivalents

Depreciation and amortization oftangible and intangible assets
Fixed asset investment
Change in working capital

Copyright © 2022 NAGASE & CO., LTD.

14

FYE March 2023 Earnings Projection▶ Although the yen weakened compared to our initial forecast, we maintain our full-year earnings forecast
unchanged, reflecting following circumstances (we expect to record record-high earnings for a second consecutive year)▶ We expect to see continued growth in food-related businesses, as semiconductor-related products remain strong, even while we
forecast food-related product to slow due to economic sluggishness▶ In addition to crude oil prices and related chemical market conditions, we expect utility costs such as electricity and gas to remain high▶ Lower resin sales due to the Shanghai lockdowns, and lower sales of formulated epoxy resins due to lower demand for mobile devices,
will have a larger-than-expected impact

100 millions of yen

22/03
Actual23/03
Forecast

ChangeVs.PY

Gross profit

1,394

1,590

195

114%

SG&A expenses

1,042

1,210

167

116%

Operating income

352

380

27108%

Ordinary income

364

390

25107%

Profit attributable toowners of the parent259285

25110%

US$ Exchange rate
(period average)@ 112.4@ 140.0(@120.0 ⇒ @140.0)

RMB Exchange rate
(period average)@ 17.5@ 20.0(@18.5 ⇒ @20.0)※Impact on operating income of 1 yen change in exchange rate: US$ approx. 100 million yen, RMB approx. 400 million yen
Copyright © 2022 NAGASE & CO., LTD.

15

FYE March 2023 Earnings Projection By segment▶ We revised our forecast for Functional Materials upward, mainly due to strong sales of electronics chemicals for semiconductor-relatedindustries and improved profitability resulting from market conditions and foreign exchange rate fluctuations▶ We revised our forecast downward for Advanced Materials & Processing, mainly due to weaker-than-expected performance in theresins business, which was affected by the Shanghai lockdowns, etc.
▶ We revised our forecast downward for Electronics & Energy, which should see firm performance for semiconductor-related products,
but weak sales of formulated epoxy resins, mainly due to a decline in demand for mobile devices▶ We revised our forecast upward for Mobility, mainly due to improved profitability in response to market conditions and foreignexchange rates, as well as an increase in market share of Functional Materials and components for EVs▶ We revised our forecast for Life & Healthcare upward, mainly due to the Prinova Group nutrition-related business performing better
than expected in the first half, including an increase in market share
100 millions of yen

23/03
23/03
Previous forecast Revised forecast

22/03 Actual

Functional Materials

PercentagechangeChangeGross profit

198

221

229

83.6%

Operating income

7883

95

1214.5%

Advanced Materials& Processing

Gross profit

323343330(13)(3.8%)

Operating income

108117105(12)(10.3%)

Electronics& Energy

Gross profit

297325310(15)(4.6%)

Operating income

102115103(12)(10.4%)

Gross profit

127

142

149

74.9%

4144551125.0%447557571

142.5%

94

112

117

54.5%

12

1(1)

(50.0%)

(72)

(91)

(95)

(4)

ー

1,394

1,590

1,590ー

ー352

380

380ー

ー

MobilityLife & Healthcare
Corporate & Others
Total

Operating income
Gross profit
Operating income
Gross profit
Operating income
Gross profit
Operating income

Copyright © 2022 NAGASE & CO., LTD.

16

Shareholder Returns▶ We plan to pay an interim dividend of ¥30 per share and a year-end dividend of ¥30 per share for an annual dividend of ¥60 per sharefor fiscal 2022 (expected 13th consecutive fiscal year of dividend increases)▶ The repurchase of ¥6 billion in treasury stock, resolved in February 2022, is on schedule(We repurchased ¥1.3 billion in the first half of the current fiscal year, bringing the cumulative total to ¥4.1 billion as of September 30,2022)

Total Dividend

Stock buy-backTotal Payout ratio%

51.0

millions of yen

48.3

50.0

15,00012,00033.7

42.4

12,520

39.5
35.6

36.0

35.2

12,085

40.0

5,041

30.0

33.0

30.5
6,006

9,000
6,799
6,000

5,269
3,811

3,557

4,064

7,186

6,643

1,956

5,456

952

5,023

5,230

5,456

5,691

1,776

20.0

1,107

3,000

6,514

7,044

3,557

3,811

4,064

4,162

14/03

15/03

16/03

17/03

18/03

19/03

20/03

21/03

22/03

23/03
（Forecast）

¥２8

¥30

¥32

¥33

¥40

¥42

¥44

¥46

¥54

¥60

0

Dividend pershare

10.0

0.0

※ 2３/03 year-end dividend to be submitted for approval to the 108th general meeting of shareholders scheduled for June 202３.

Copyright © 2022 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, 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.