Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2019
<Under Japanese GAAP>
August 3, 2018
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 (First Section)
Code number:8012
URL (https: //www.nagase.co.jp/english/)Representative:
Kenji Asakura, Representative Director and President
Contact:
Akira Takami, Executive Officer, General Manager, Accounting Division TEL: +81-3-3665-3103
Filing of quarterly report (scheduled): August 8, 2018
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, 2019
(April 1, 2018 to June 30, 2018)(1) Consolidated Operating Results(Percentages represent changes compared with same period of the previous fiscal year.)Net sales

Operating income

Profit attributable toowners of the parent

Ordinary income

For the first quarter ended
Millions of yen% Millions of yen% Millions of yen% Millions of yen
June 30, 2018
198,618
6.1
6,939
23.8
7,647
20.1
5,495
June 30, 2017
187,136
7.9
5,604
59.0
6,370
63.2
3,482
(Notes) Comprehensive income
First quarter ended June 30, 2018: ¥7,439 million (4.1% decrease)

%

57.8
55.7

First quarter ended June 30, 2017: ¥7,758 million (―%)
Earnings per share
For the first quarter ended
June 30, 2018
June 30, 2017

Yen
43.89
27.62

Earnings per share (diluted)
Yen−−(2) Consolidated Financial Position
Total assets
Millions of yen

June 30, 2018
March 31, 2018
(Reference) Equity capital

Shareholders’equity ratio

Net assets
Millions of yen

583,081
312,864
569,456
308,804
As of June 30, 2018: ¥307,706 million
As of March 31, 2018: ¥303,636 million

Net assets per share
%

Yen

52.8
53.3

2,457.48
2,424.97

2. Dividends
Annual Dividends per Share
3Q
Fiscal year end

1Q
2Q
For the year ended (or ending)
Yen
YenMarch 2018
17.00−
March 2019−
March 2019 (estimate)
18.00(Note) Revisions to the latest projected dividends: No

Annual

Yen

Yen

Yen

−

23.00

40.00

−

19.00

37.00

3. Projected Consolidated Results for the Fiscal Year Ending March 31, 2019
(April 1, 2018 to March 31, 2019)(Percentages represent changes compared with the corresponding periods of the previous fiscal year.)Net sales
Millions of yen

Full fiscal year

828,000

Operating income

Profit attributable toowners of the parent

Ordinary income

Earnings per
share% Millions of yen% Millions of yen% Millions of yen

%

Yen

5.6

5.7

5.8

8.3

148.5525,50027,50018,600(Note) Revisions to the latest projected consolidated results: No* Notes(1) Changes in major subsidiaries during the period (changes in specified subsidiaries accompanying changes in thescope of consolidation): No
New: ― (Company name:)
Excluded: ― (Company name:)(2) Application of special accounting methods to the preparation of quarterly financial statements: No(3) Changes of accounting principles, changes in accounting estimates, and restatement of prior period financial
statements after error correctionsi.
Changes in accordance with revisions to accounting and other standards: No
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(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, 2018
127,408,285 shares March 31,2018
127,408,285 shares
ii.

iii.

Number of treasury stock as of the fiscal period end
June 30, 2018
2,196,179 shares

March 31, 2018

2,195,966 shares

Average number of shares during the period
June 30, 2018125,212,159 shares

June 30, 2017

126,120,721 shares* 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.
Please refer to “1. Qualitative Information (3) Qualitative Information Related to Consolidated Earnings Forecasts” onpage 4 of this document.

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2019

Attachments
1. Qualitative Information

2(1) Business Performance2(2) Financial Position

3(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

7

Quarterly Consolidated Statements of Comprehensive Income

8(3) Notes related to Quarterly Consolidated Financial Statements

9(Assumption for Going Concern)

9(Significant Fluctuations in Shareholders’ Equity)

9(Additional Information)

9(Segment Information, etc.)

10

3. Supplementary Information

12(1) Overseas Sales

12

- 1 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2019

1. Qualitative Information(1) Business Performancea. General Summary of Results
The Japanese economy continued to recover throughout the consolidated first quarter, supported by strong corporate earnings,
increasing capital investment, and other factors. Continuing improvement in employment and payrolls was also a positive
contributing factor. The global economy continued its pace of moderate recovery as well, despite concerns about the impact oftrade frictions between the U.S. and China and the U.S. and Europe. Positive corporate earnings in the U.S. was the major
contributing factor behind this recovery.
In this environment, the Company recorded domestic sales of ¥102.02 billion (+7.4% year on year) for the consolidated firstquarter. Overseas sales amounted to ¥96.59 billion (+4.8%). In total, the Company recorded ¥198.61 billion (+6.1%) in net
sales.
The Company recorded gross profit of ¥26.5 billion (+10.1%) and operating income of ¥6.93 billion (+23.8%). This increase
was mainly due to generally higher global sales and improved profitability among the Company’s manufacturing subsidiaries.
Ordinary income amounted to ¥7.64 billion (+20.1%), while profit attributable to owners of the parent amounted to ¥5.49
billion (+57.8%).

b. Segment Summary
Functional Materials
The Functional Materials segment recorded higher sales in both domestic and overseas markets.
The Performance Chemicals business recorded higher sales year on year, mainly due to improved sales of coating raw
materials and urethane materials, spurred by strong automotive production in Japan and overseas and naphtha price increases.
Another contributing factor was additional sales of the U.S. distributor acquired in the second quarter of the prior fiscal year.
The Speciality Chemicals business recorded higher sales as well. Sales were negatively impacted by a decrease in sales due ofcertain materials used in the electronics industry overseas due to the impact of supplier production adjustments. In Japan,
however, the Company experienced higher sales of electronics chemicals and plastic materials/plastic additives for thesemiconductor and other electronics-related markets.
As a result, the Functional Materials segment recorded sales of ¥44.06 billion for the consolidated first quarter, a ¥3.74 billion(+9.3%) increase year on year. Operating income for the segment was ¥1.34 billion, representing a ¥160 million (+14.3%)
increase.

Advanced Materials & Processing
The Advanced Materials & Processing segment recorded higher sales in both domestic and overseas markets.
The Colors & Advanced Processing business recorded higher sales as a whole, driven by growth in Japan for plastic resins forindustrial and packaging applications and dyes/additives, as well as growth in digital print processing materials in both Japanand overseas.
The Polymer Global Account business mainly sells plastics to the office equipment, appliance, and video game device markets.
Sales in these businesses were higher overall, driven by growth in Japan and ASEAN.
As a result, the Advanced Materials & Processing segment recorded sales of ¥68.72 billion for the consolidated first quarter, a¥4.13 billion (+6.4%) increase year on year. Operating income grew ¥630 million (+38.4%), reaching ¥2.29 billion for thequarter.

Electronics
The Electronics segment recorded lower sales in both domestic and overseas markets.
- 2 -NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2019

The Electronic Chemicals business recorded lower sales overall, mainly due to the negative impact of decreased capacity
utilization at customer factories, resulting in lower sales of photolithography materials and formulated epoxy resins for thesemiconductor industry.
The Electronic Materials business recorded lower sales due to decreases in display-related products, despite strong
performance in our business for abrasives used in connection with interim processing in semiconductors.
As a result, sales for the segment amounted to ¥29.28 billion, which was a ¥1.25 billion (-4.1%) decrease year on year.
Meanwhile, segment operating income grew ¥140 million (+8.1%), reaching ¥1.86 billion for the consolidated first quarter.
This increase was mainly due to strong performance of high-margin businesses in Greater China.

Automotive & Energy
The Automotive Solutions business recorded higher sales, driven by strong performance in our resins business in Japan,
Greater China, and ASEAN. Sales growth for car electronics-related products was another positive factor.
As a result, sales for the segment amounted to ¥34.17 billion, which was a ¥3.43 billion (+11.2%) increase compared to theconsolidated first quarter of the prior fiscal year. Segment operating income grew ¥110 million (+17.6%), reaching ¥790
million for the quarter.

Life & Healthcare
The Life & Healthcare segment recorded higher sales in both domestic and overseas markets.
Overseas, sales of TREHA™ and other products to food ingredient makers in our Life & Healthcare Products business fell,
while sales for these same products grew in Japan. Sales of AA2G™ to customers in the skin care and toiletries sectors werehigher both in Japan and overseas. In the medical and pharmaceutical field, sales of pharmaceutical raw materials andintermediates and medical materials were higher than the year-ago period. As a result, the business recorded higher sales
compared to the prior year.
The Beauty Care Products business, which includes sales of cosmetics and health foods, recorded lower sales, driven down due
to weak performance across all product categories.
As a result, sales for the segment amounted to ¥22.22 billion, which was a ¥1.43 billion (+6.9%) increase compared to theconsolidated first quarter of the prior fiscal year. Segment operating income grew ¥130 million (+10.8%) reaching ¥1.34 billion
for the consolidated first quarter.

Other
No special matters to disclose.

(2) Financial Position
As of the end of the consolidated first quarter, current assets amounted to ¥364.35 billion. This represents an increase of ¥11.03
billion compared to the end of the prior consolidated fiscal year, mainly due to increases in accounts receivable and inventories.
Non-current assets amounted to ¥218.72 billion, up ¥2.59 billion. This increase was mainly due to increases in fair value ofshares retained. As a result of these various factors, total assets increased ¥13.62 billion to ¥583.08 billion as of the end of theconsolidated first quarter.
Liabilities amounted to ¥270.21 billion, a ¥9.56 billion increase compared to the end of the prior consolidated fiscal year. This
increase was mainly due to increases in short-term loans and commercial paper.
Net assets amounted to ¥312.86 billion, up ¥4.05 billion. This increase was mainly due to ¥5.49 billion in profit attributable toowners of the parent and an increase in net unrealized holding gain on securities.
- 3 -NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2019As a result, the Company recorded a shareholders’ equity ratio of 52.8%, 0.5 points lower than the end of the prior consolidated
fiscal year.

(3) Qualitative Information related to Consolidated Earnings Forecasts
The Company has made no changes to the full-year consolidated earnings forecasts announced on May 7, 2018.

- 4 -NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2019

2． Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets

Prior Consolidated Fiscal Year
(March 31, 2018)ASSETS
Current assets
Cash and time deposits
Notes and accounts receivable
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
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, 2018)

43,303225,999
67,681
1,883
4,106
10,953(602)
353,325

41,845
231,594
73,6302,120
4,660
10,974(466)
364,358

67,22566,69825,478
12,215
3,396
41,09025,21011,821
3,131
40,163

100,403
109
2,409
4,992
(101)
107,813
216,130
569,456

104,820
102
2,060
4,977
(100)
111,860
218,722583,081NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2019

Prior Consolidated Fiscal Year
(March 31, 2018)
LIABILITIESCurrent liabilities
Notes and accounts payable
Short-term loans
Current portion of long-term loans
Commercial paper
Current portion of bonds
Accrued income taxes
Accrued bonuses for employees
Accrued bonuses for directors
Other
Total current liabilities
Long-term liabilities
Bonds
Long-term loans
Deferred tax liabilities
Net defined benefit liability
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, 2018)

118,028
31,934
11,067
5,000
1,738
5,451
274
19,500
192,996

119,512
39,246
10,9278,000
10,000
1,482
2,606
88
19,174211,038

20,00017,906
14,42014,518809
67,655
260,651

10,00017,932
15,904
14,600741
59,178270,217

9,699
11,158232,534(3,114)250,278

9,699
10,659235,149(3,114)
252,394

50,773
(15)
2,917
(317)
53,3585,168
308,804
569,456

52,363
21
3,185
(258)
55,312
5,157
312,864
583,081NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2019(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive
Income(Quarterly Consolidated Statements of Income)Three-month periods ended June 30, 2018 and 2017
(Millions of yen)Three-month period ended
June 30, 2017
(April 1, 2017 - June 30, 2017)

Three-month period ended
June 30, 2018
(April 1, 2018 - June 30, 2018)

187,136
163,064
24,072
18,467
5,604

198,618
172,11126,506
19,567
6,939

43
684
68
204
16
83
1,100

58
819
67
247
129
1,323

236
97
334
6,370

360
157
96
614
7,647

0
0

20
1
6
28

19
13
225
230
294
782
5,588
1,170
935
2,106
3,482
(0)
3,482

7
16
23
7,652
1,044
1,053
2,097
5,554
58
5,495

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 gain
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on sale of non-current assets
Gain on sale of investment securities
Gain on sales of shares of subsidiaries and affiliates
Total extraordinary gains
Extraordinary losses
Loss on sale of non-current assets
Loss on disposal of non-current assets
Impairment losses
Loss on business withdrawal
Loss on step acquisitions
Total extraordinary losses
Income before income taxes and non-controlling interests
Income taxes - current
Income taxes - deferred
Total income taxes
Profit for the period(Loss) 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, 2019

(Quarterly Consolidated Statements of Comprehensive Income)Three-month periods ended June 30, 2018 and 2017
(Millions of yen)Three-month period ended
June 30, 2017
(April 1, 2017 - June 30, 2017)

Three-month period ended
June 30, 2018
(April 1, 2018 - June 30, 2018)

3,482

5,554

3,747
(1)
493
54

1,591
36
240
59

(18)

(43)

4,276
7,758

1,884
7,439

7,718
39

7,449
(10)

Profit for the period
Other comprehensive income
Net unrealized holding gain on securities
Deferred (loss) gain on hedges
Translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income 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, 2019(3) Notes related to Quarterly Consolidated Financial Statements(Assumption for Going Concern)
No matters to report.

(Significant Fluctuations in Shareholders’ Equity)
No matters to report.

(Additional Information)
At the beginning of the current consolidated first quarter, the Company adopted the Partial Amendment to the AccountingStandard for Tax Effect Accounting (ASBJ Statement No.28, February 16, 2018). Under this standard, the Company now classifies
deferred tax assets under investments and other assets, while deferred tax liabilities are classified under long-term liabilities forpresentation.

- 9 -NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2019

(Segment Information, etc.)
Segment Information
I Three-month period ended June 30, 2017 (consolidated)
1. Information related to net sales and income (loss) by reportable segment(Millions of yen)
Reportable Segments
Advanced
Functional
Automotive
Life &
Materials & Electronics
Materials& Energy Healthcare
Processing

Total

Other
(Note) 1.

Total

To Quarterly
Consolidated
Corporate Adjustments
Statements of(Note) 2. (Note) 3.
Income(Note) 4.

Net sales
Sales tocustomers
Intersegment
sales/transfers
Total
Segment income(loss)

40,32364,59230,53930,73920,793

186,989

146

187,136--

187,136

600

569

522

671

122

2,486

1,087

3,573

-

(3,573)-40,924

65,161

31,062

31,411

20,916

189,476

1,234

190,710-(3,573)

187,136

1,178

1,660

1,726

679

1,217

6,462

61

6,524

(1,018)98

5,604(Note) 1. Other is a business segment consisting of businesses not included in reportable segments, and includes logistics services,
information processing services, and professional services.
2. Corporate segment income (loss) represents expenses not allocated to reportable segments or Other.
3. Adjustments are eliminations of intersegment transactions.
4. The sum of Segment income (loss), Corporate, and Adjustments is equivalent to operating profit as presented in the
consolidated statements of income.
II Three-month period ended June 30, 2018 (consolidated)
1. Information related to net sales and income (loss) by reportable segment(Millions of yen)
To Quarterly
Consolidated

Reportable Segments
Advanced
Functional
Automotive
Life &
Materials & Electronics
Materials& Energy Healthcare
Processing

Total

Other
(Note) 1.

Total

Corporate Adjustments
Statements of(Note) 2. (Note) 3.
Income(Note) 4.

Net sales
Sales tocustomers
Intersegment
sales/transfers
Total
Segment income(loss)

44,06868,72329,282

34,17822,223

198,476141

198,618--

198,618

746

610

487

680

105

2,631

1,363

3,995

-

(3,995)-44,814

69,33429,76934,85922,329201,108

1,505

202,613-(3,995)

198,618

1,347

2,298

1,867

799

1,349

7,661

75

7,736

(902)

104

6,939

(Note) 1. Other is a business segment consisting of businesses not included in reportable segments, and includes logistics services,
information processing services, and professional services.
2. Corporate segment income (loss) represents expenses not allocated to reportable segments or Other.
3. Adjustments are eliminations of intersegment transactions.
4. The sum of Segment income (loss), Corporate, and Adjustments is equivalent to operating profit as presented in the
consolidated statements of income.

- 10 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2019

2． Changes in Reportable Segments(Changes in Business Classifications)
Beginning with the current consolidated first quarter, the Company has classified Fitz Chem LLC under the
Functional Materials and the Life & Healthcare segments. In the prior consolidated fiscal year, Fitz Chem LLC
was classified under the Functional Materials segment. This change is in response to a change in business unit
management. As the acquisition of Fitz Chem LLC occurred during the second quarter of the prior consolidated
fiscal year, this change has no impact on segment information of the first quarter of the prior consolidated fiscal
year.
The following describes the major products and services handled by each reportable segment.
The Functional Materials segment is engaged in the sales of materials for paints/inks, urethane materials,
auxiliaries, plastic materials, plastic additives, industrial oil solutions, surfactants, fluorochemicals, encapsulantmaterials, silicone materials, and more for the paints/inks, resins, urethane foam, organic synthesis, surfactants,
and semiconductor industries.
The Advanced Materials & Processing segment is engaged in sales of dyestuffs, dyes, functional dyes, digitalprint processing materials, thermoplastic resins, thermosetting resins, automobile refinish paints, conductive
coatings, synthetic rubber, inorganic materials, plastics products, and resins molding tools/dies for thedye/additive, digital print processing material, fiber processing, raw resin material, resin molding, functional film
and sheet, construction, and other industries.
The Electronics segment is engaged in the sales of pre-processing materials and devices for LCD/semiconductors,
materials for display panels, materials and devices for semiconductor assembly, low-temperature/vacuum
equipment, high-function epoxy resins, precision electronics abrasives, and more for the display, touch panel,semiconductor, hard disk drive, electronic components, and heavy electrical industries.
The Automotive & Energy segment is engaged in the sales of plastic products, thermoplastic resins, thermosetting
resins, silicone products, resin molding tools/dies, high-function car electronics materials and components, battery
materials, solar cell/secondary battery materials and more for the automotive, automotive component, and energy
industries.
The Life & Healthcare segment is engaged in the sales of pharmaceutical/agricultural chemicals and materials,
research products, in vitro diagnostics, enzymes, food additives, additives for cosmetics, feeds, and surfactants forthe pharmaceutical, food, and cosmetics industries. The segment offers radiation measurement as one of its main
services. In addition, this segment sells cosmetics, health foods, and beauty foods directly to consumers.

- 11 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2019

3． Supplementary Information(1) Overseas Sales
I Three-month period ended June 30, 2017 (consolidated)
GreaterChina
I Overseas sales(Millions of yen)

50,254ASEAN

Americas26,1287,685

Europe

Other

3,474

Total

4,643

II Consolidated sales

187,136(Millions of yen)
III Ratio of overseas sales toconsolidated sales (%)

92,186

26.8

14.0

4.1

1.9

2.5

49.3

II Three-month period ended June 30, 2018 (consolidated)
GreaterChina
I Overseas sales(Millions of yen)

51,169ASEAN

Americas28,4389,602

Europe

Other

3,452

Total

3,932

II Consolidated sales

198,618(Millions of yen)
III Ratio of overseas sales toconsolidated sales (%)

96,596

25.8

14.3

4.8

1.7

2.0

(Note)
1. Overseas sales consist of net sales of the Company and consolidated subsidiaries in other countries or regions.
2. Countries/regions are determined by geographical proximity.
3. Major countries in each region(1) Greater China......China, Hong Kong, Taiwan(2) ASEAN...............Thailand, Singapore(3) Americas.............U.S., Mexico(4) Europe................Germany(5) Other...................Korea- 12 -

48.6