FY2023 First Quarter
Financial Highlights
NAGASE&CO.,LTD.
Stock exchange listing : Tokyo (Prime Market)
Code number : 8012

August 3, 2023

Copyright © 2023 Nagase & Co., Ltd.

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■ FY2023 Earnings Projection■ Shareholder Returns

Copyright © 2023 Nagase & Co., Ltd.

P14～P15P16

Consolidated statements income▶ Gross profit : Net sales increased due to the weaker yen, but gross profit margin declined due to lower profitability at certain
manufacturing subsidiaries, etc., resulting in lower gross profit▶ Operating income : Profit decreased due to lower gross profit as well as higher selling, general and administrative expenses inconnection with personnel costs, etc., and lower profitability in the Prinova Group▶ Profit Attributable to owners of the parent : Profit decreased due to the decrease in operating income, an increase in interest
expenses, an increase in loss on valuation of investment securities, and other factors

100 millions of yen

FY2022 1Q

FY2023 1Q

ChangeVs.PY

Forecast

Achievement

Sales

2,195

2,240

+ 44

102%

9,580

23%

Gross profit399

387(11)

97%

1,710

23%

<GP ratio>

18.2%

17.3%

(0.9ppt)

－

17.8%

－

SG&A
expenses

290317

+ 27

109%

1,365

－

Operatingincome108

69(39)

64%

345

20%

Ordinaryincome

11573(42)

64%

326

23%

Profit Attributableto owners of theparent

79

43(36)

55%

240

18%

US$ Exchange rate
(period average)@ 129.7@ 137.5@ 7.8

Weak yen@ 135.0

RMB Exchange rate
(period average)@ 19.6@ 19.6@ 0.0Strong yen@ 20.0※ Offset to sales and cost of sales from revenue recognition standards: FY2022 1Q -¥65.1 billion, FY2023 1Q -¥63.5 billion※ Impact from foreign exchange: Gross profit, +¥1.4 billion; Operating income, +¥0.1 billion

Copyright © 2023 Nagase & Co., Ltd.

3

Gross Profit By Region▶ Profit decreased in both domestic and overseas businesses▶ Sales of cosmetics-related and other businesses were strong in Japan; however, overall profit decreased due toweak sales of raw materials for semiconductor-related products and other electronics industry-related products▶ Despite higher profits overseas due to the weaker yen, profits decreased overall due to sluggish Prinova Group business sales
and weak resin sales stemming from the impact of the economic slowdown

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

400

Total 399
Overseas
216

350

100%

Total 216

Total 387
Overseas
208

90%

200

Europe
3280%
300

250

Overseasgrossprofit ratio
54.2%

Overseasgross
profit ratio
54.0%

Other
2Total 208

Other2Europe
3270%
150Americas
8660%

Americas
8350%

200

10040%
150

ASEAN
3730%
100

Domestic
182

Domestic
178

5020%

5010%

00%
FY2022 1Q

ASEAN
35

Greater
China
57

Greater
China
53

FY2022 1Q

FY2023 1Q

0FY2023 1Q※Domestic figures under Domestic & Overseas Gross Profit include inter-regional adjustments
Copyright © 2023 Nagase & Co., Ltd.

4

Gross Profit By Business & Segment▶ Functional Materials posted lower sales of coating raw materials and raw materials for semiconductor-related products andother electronics industry products▶ Advanced Materials & Processing posted lower sales due to decreased demand for resin sales in the office equipment,
appliance, and video game device market, as well as the impact of inventory adjustments by customers▶ Life & Healthcare posted an increase in sales of Hayashibara’s AA2G™ and other cosmetics materials

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

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

Functional
Materials
Advanced(6)Materials& Processing(14)399Total 399
Total 387

400300

Manufacturing169

Manufacturing
158

Total 399

Life &Healthcare
147

Total 387

Life &Healthcare
156

Life &Healthcare
8
Corporate& Others
0387

Electronics Mobility& Energy
1(1)Mobility 32

FY2022 1Q

FY2023 1Q

Mobility 34
200

100Electronics& Energy
78
Trading& Other229

Trading& Other
228

Advanced
Materials& Processing
81

History of Gross Profit(100 millions of yen)
Electronics& Energy
77
Advanced
Materials& Processing
67

Functional
Materials
58

Functional
Materials
51

0
By Business

By Business

By Segment

By Segment

FY2022 1Q

FY2023 1Q

FY2022 1Q

FY2023 1Q

399
4003873943903693002001000000１Q

２Q
FY2022

Copyright © 2023 Nagase & Co., Ltd.

３Q
FY2023

４Q

5

Operating Income by Business & Segment▶ Operating income decreased due to lower gross profit in Functional Materials and Advanced Materials & Processing▶ While gross profit increased in Life & Healthcare, weaker profitability at the Prinova Group, increased personnel expense andother selling, general and administrative expenses, and a delay in the profit contribution of the new Utah plant caused adecrease in operating income▶ We continue to invest for sustainable future growth, including in DX-related areas

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

Change in Operating Income By Segment (100 millions of yen)108

Total 108120

FunctionalMaterials(7)

Total 108
Life &Healthcare
41

10080

Manufacturing
44

Total 69

Total 69
Manufacturing1960

Advanced
Materials& Processing(13)

Life &Healthcare
32

Mobility 9
Electronics& Energy
26

Mobility 9

Advanced Materials& Processing 25

Electronics& Energy
23

Electronics& Energy
Mobility(2)
0Corporate& Others(6)Life &Healthcare(8)６９

FY2022 1Q

FY2023 1Q

History of Operating Income(100 millions of yen)40

Trading& Other
64

20

Trading& Other
50

Functional
Materials
230Others
(18)
(20)

By Business
FY2022 1Q

By Business
FY2023 1Q

By Segment
FY2022 1Q

Advanced Materials& Processing 12
Functional
Materials
16Others(24)
By Segment
FY2023 1Q

12010890

10075

6980

5960
40
200000１Q

２Q
FY2022

Copyright © 2023 Nagase & Co., Ltd.

３Q
FY2023４Q

6Functional Materials Segment Operating Income Overview▶ Decrease in sales of coating raw materials to the automotive and other industries▶ Sales decreased for raw materials for semiconductor-related products and other electronics industry products, as did sales ofraw materials for industrial oil solutions and plastic materials▶ Lower profit year on year as a result of overall weak performance due in part to customer inventory adjustments

History of operating income （100 millions of yen）

Operating income by business（100 millions of yen）

25
23

Total 23

22

Manufacturing
321
20
20

16
Total 16

Trading &Other20

Manufacturing1

15

10
Trading &Other1450000
FY2022 1Q

FY202３ 1Q１Q

２Q
FY2022

Copyright © 2023 Nagase & Co., Ltd.

３Q
FY2023４Q

7

Advanced Materials & Processing Segment Operating Income Overview▶ Lower profit due to decreased demand for resin sales in the office equipment, appliance, and video game device market, as wellas the impact of inventory adjustments by customers▶ Lower digital print processing materials sales due to lower profitability in the manufacturing business▶ Decrease in resin sales and lower profitability in the manufacturing business led to weak performance in trading company andmanufacturing businesses and lower profit year on year

History of operating income （100 millions of yen）

Operating income by business（100 millions of yen）
30

Total 25

26

Manufacturing025
24

16

Total 1215
Trading &Other
25

12

Trading& Other
15

Manufacturing(3)0１Q

FY2022 1Q

000２Q
FY2022

FY2023 1Q
Copyright © 2023 Nagase & Co., Ltd.

３Q

４Q

FY20238

Eｌectronics & Energy Segment Operating Income Overview▶ Despite weakening semiconductor market conditions, sales of materials to the semiconductor industry increased due to growthin product sales▶ Sales of formulated epoxy resins increased for server applications, but performance was lower overall due to a decline insemiconductor-related and electronics-related products for mobile device applications▶ Profit decreased year on year due to the significant impact of weak sales related to formulated epoxy resins

History of operating income （100 millions of yen）

Operating income by business（100 millions of yen）
30
Total 26

2625

Manufacturing
6

Trading& Other
19

Total 23
Manufacturing4

Trading& Other18

23
21
20

19

100000
FY2022 1Q

FY202３ 1Q

１Q

２Q
FY2022

Copyright © 2023 Nagase & Co., Ltd.

３Q

４Q

FY20239Mobility Segment Operating Income Overview▶ Sales increased for resins, mainly due to an increase in automobile production▶ Sales increased in functional materials and functional components for interior and exterior fittings and electrification▶ Operating income increased year on year, despite an increase in selling, general and administrative expenses due to higher
activity volume, etc.

History of operating income （100 millions of yen）

Operating income by business（100 millions of yen）
16

15

Total 9Total 9141312109998
Trading& Other9

Trading& Other964

20000
FY2022 1Q

FY202３ 1Q

１Q

２Q
FY2022

Copyright © 2023 Nagase & Co., Ltd.

３Q

４Q

FY202310

Life & Healthcare Segment Operating Income Overview▶ Prinova Group profitability in food ingredient sales declined due to falling market prices; however, manufacturing andprocessing businesses posted higher sales due in part to operations at the new plant in Utah
▶ Hayashibara profitability recovered due to the wider advancement of price increases, while sales of AA2G™ and other cosmetics
materials increased with higher demand, particularly overseas▶ Hayashibara performed well; however, profit decreased overall year on year due to weaker profitability in Prinova Groupfood ingredient sales, increased personnel expense and other selling, general and administrative expenses, and a delay in theprofit contribution of the new Utah plant

History of operating income （100 millions of yen）

Operating income by business（100 millions of yen）

41
40
Total 41
32
Total 32

30
25

Manufacturing33

Trading& Other
7

Manufacturing16

Trading& Other
16

20
20

18

100000
FY2022 1Q

FY202３ 1Q

１Q２Q
FY2022

Copyright © 2023 Nagase & Co., Ltd.

３Q

４Q

FY202311

State of Major Manufacturing Subsidiaries▶ Nagase ChemteX : Lower profit due to weak sales of formulated epoxy resins for use in semiconductor and mobile device
applications▶ Hayashibara : Higher profit due to improved profitability in AA2G™ cosmetics materials through the wider advancement of priceincreases and strong sales stemming from a recovery in demand▶ Prinova Group : Despite increased sales in our manufacturing businesses, profit declined due to the impact of weakerprofitability in materials sales resulting from lower market prices, increased personnel expense and other selling, general andadministrative expenses, and a delay in the profit contribution of the new Utah plant

100 millions of yen

Nagase ChemteX
Corporation

HayashibaraCo.,Ltd.

FY2022 1Q

FY2023 1Q

ChangeSales

7257(15)

79%

252

23%

Gross profit

2217(4)

79%

71

24%

Operating income

85(3)

60%

2026%

Sales

71

89

18126%

367

24%

Gross profit

28346122%

13126%

Operating income

11164142%

5033%

Goodwill amortization etc.

77-100%3025%

Operating income afteramortization burden

384222%

1945%

459

489

29106%

2,035

24%

Gross profit

8580(5)

93%

367

22%

Operating income3312(20)

38%

8415%

560114%2425%

286(21)

24%

5911%

Sales

Prinova Group

Goodwill amortization etc.
Operating income after
amortization burden

Copyright © 2023 Nagase & Co., Ltd.

Vs.PY

Forecast

Achievement

12Consolidated Balance Sheets▶ Current assets : We reduced inventories and working capital▶ Net assets : Increase, despite dividend payments and share buybacks, as we posted a profit for the period, as well as increases
in net unrealized holding gain on securities and translation adjustments due to the weaker yen

100 millions of yen

23/03

23/06

ChangeDetails

Total Current Assets

5,301

5,336

35

(Cash&deposits)

408

424

15

(Trade account receivbable)

3,021

3,062

41

(Inventories)

1,697

1,621

(75)

2,325

2,411

85

697

767

70

Total assets

7,626

7,748

121

Current Liab.

2,862

2,902

40 Short-term loans・CP(10)

1,404

1,465

60

980

993

12

Total Liab.

3,843

3,895

52

Shareholders' equity

3,090

3,054

Accum. Other Comprehensive Income

586

686

100Non-controlling interest

1071114

Total net assets

3,783

3,852

68

Working capital

3,313

3,218(94)

Shareholders' equity ratio

48.2%

48.3%0.1ppt

0.38

0.37(0.01)

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

NET D/E ratio

Non-Current Loan (14), Lease Obligation+12,
Deferred Tax Liab.+11(36) Treasury Stock (32)

Copyright © 2023 Nagase & Co., Ltd.

Net unrealized holding gain on securities+53,Translation Adjustment+4213

FY2023 Earnings Projection(No Change)▶ We expect raw materials and resource prices to remain high, due in part to the protracted Russian invasion of Ukraine▶ We expect the business environment to remain challenging, given inflation in many countries, consumer spending impacted
negatively by tightening measures, and the suppression of economic activities▶ Under these circumstances, we expect to see higher profit for FY2023, due to steady growth in the automobile-related
business, continued growth in the food-related business, and a recovery in profitability in our manufacturing businesses, which
faced a difficult situation in the previous fiscal year
▶ Currently reviewing the details and considering revisions of the KGIs and KPIs in our ACE 2.0 Medium-term Management Plan

100 millions of yen
FY2022
ActualFY2023
Forecast

ChangeVs.PY

Sales

9,128

9,580

451

105%

Gross profit

1,554

1,710

155

110%

<GP ratio>

17.0%

17.8%

+0.8ppt

SG&A expenses

1,220

1,365

144112%

Operating income

333

345

11103%

Ordinary income

325

326

0

100%

Profit attributable to ownersof the parent

236

240

3102%

US$ Exchange rate
(period average)@ 135.5@ 135.0

RMB Exchange rate
(period average)@ 19.7@ 20.0-※Impact on operating income of 1 yen change in exchange rate: US$ approx. 100 million yen, RMB approx. 400 million yen

Copyright © 2023 Nagase & Co., Ltd.

14

FY2023 Earnings Projection By segment(No Change)▶ We expect Functional Materials and Mobility to remain firm, mainly in response to an increase in automobile production volume▶ We expect higher profit in Advanced Materials & Processing to increase, driven mainly by a recovery in resin sales volume(declined in the previous year due to lockdowns in China) and an improvement in the earnings of our manufacturing subsidiaries▶ We expect higher profit in Electronics & Energy, mainly due to recovery in sales of formulated epoxy resins for mobile devicesand other products▶ We expect higher profit in Life & Healthcare, driven mainly by full-scale operations at the new Utah plant engaged insports nutrition contract manufacturing of Prinova Group, a return to profitability at Hayashibara, etc.
▶ We expect Others & Corporate to be impacted by increased development costs for future profits and increased amortization ofretirement benefit actuarial differences

100 millions of yen

Functional Materials

Advanced Materials& Processing
Electronics& Energy

MobilityLife & Healthcare

Corporate&Others

Total

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

FY2022 Actual

FY2023 Forecast

1,120
223
88
2,650
317
93
1,369
307
92
1,255
144
47
2,731
559
105
01(94)
9,128
1,554
333

1,150
229
89
2,700
343
110
1,500
338
106
1,356
156
51
2,873
643
113
11(124)
9,580
1,710
345

Copyright © 2023 Nagase & Co., Ltd.

Change
29
5049
25
16130
30
13100
113141
83
70(0)
(29)
451
155
11Vs.PY
103%
102%
101%
102%
108%
118%
110%
110%
114%
108%
108%
106%
105%
115%
107%
122%
62%
ー
105%
110%
103%

15

Shareholder Returns▶ We plan to pay an interim dividend of ¥40 per share and a year-end dividend of ¥40 per share for an annual dividend of ¥80
per share for fiscal 2023 (expected 14th consecutive fiscal year of dividend increases)▶ We are proceeding as planned with the repurchase of ¥８ billion in treasury stock, as resolved in May 2023 (repurchase period:
May 2023 to December 2023), reaching cumulative purchases of ¥3.2 billion as of the end of June 2023
▶ We expect the total payout ratio for fiscal 2023 to be 71%, including greater shareholder returns through increased dividends
and share buybacks

Total Dividend

share buyback

Total Payout ratio

millions of yen

71.3

70.0

20,00058.9
51.0

16,000

48.3

33.7

35.6

33.0

36.0

35.2

17,10913,908

50.0

40.0

5,662
6,006

8,000
5,2693,811

4,064

6,799

7,186

1,776

1,956

30.0

6,643
5,456

952

20.0

1,107

8,246

9,109

6,514

10.0

5,023

5,230

5,456

5,691

FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023(Forecast)

¥33

¥40

¥42

¥44

¥46

¥54

¥70

¥80

3,811

4,064

4,162

FY2014FY2015

¥30

¥32

0.0

0

Dividend per
share

60.0

8,000

12,52039.5

12,0004,000％※ FY2023 year-end dividend to be submitted for approval to the 109th general meeting of shareholders scheduled for June 2024.

Copyright © 2023 Nagase & Co., Ltd.

16

■Inquiries:
https://www.nagase.co.jp/english/contact/ir/■NAGASE Group Investor Relations Website:
https://www.nagase.co.jp/english/ir/

These presentation materials contain projections based on forward-looking
assumptions, forecasts, and plans as of August 3, 2023
Actual earnings may differ from projections due to risks and uncertainties in
the future global economy, competitive landscape, currency exchange rates,
etc.

Copyright © 2023 Nagase & Co., Ltd.