Summary of Consolidated Business Results for the Third Quarter Ended December 2004
February 4, 2005
Company Name
Nagase & Co., Ltd
Listing Code8012(URL http://www.nagase.co.jp/)
Representative
Position
President
Contact Details
Position
Accounting Division, Manager

Stock Exchanges Listed: Tokyo, Osaka
Location of Head Office: Osaka Prefecture
Hiroshi Nagase
Takahide Osada

Telephone (03) 3665-3103

1. Matters concerning the preparation of the Summary of Business Results for the Third Quarter of fiscal 2004
(1) Use of simplified accounting procedures:(Description):
Accounting standard of income and other taxes: The amount of these taxes was calculated using the estimated yearly tax rates
based on the legal effective tax rates.
For some account items with minor effects, a simpler calculation method was used.
(2) Changes in accounting policies compared to recent consolidated fiscal year:(Description):
Accounting standard concerning the impairment of fixed assets:
We applied “Accounting Standard concerning Impairment of Fixed Assets” and “Guideline for Application of AccountingStandard concerning Impairment of Fixed Assets”.
(3)Change in the applicable scope of the consolidation and equity method:
Consolidated Subsidiaries: New: 8 Excluded: 1 (due to the merger of consolidated subsidiaries)
Equity method: New: 0 Excluded: 0
2. Consolidated Business Results for the Third Quarter Ended December 2004 (April 1, 2004 – December 31, 2004)
1)Consolidated Operating Results(Note: Amounts have been rounded off to the nearest million yen)
Net Sales
Third Quarter Ended December 2004
Third Quarter Ended December 2003
(Reference)
Period Ended March 31, 2004

¥ Millions
426,004
397,288

Operating Income%7.2‐¥ Millions
10,507
9,244

Ordinary income%
13.7‐

533,30110,244

Net (quarterly) income

EPS (quarterly)¥ Millions
12,108
11,783%
2.8‐

13,110Fully Diluted EPS (quarterly)¥ Millions%¥¥Third Quarter Ended December 2004
7,313
40.2
57.47
57.36
Third Quarter Ended December 2003
‐
‐
5,216
41.01
(Reference)
‐
7,010
54.69
Period Ended March 31, 2004
Notes:
1. Figures shown in percentage of sales, operating income and other items show the ratios of sequential changes comparedwith the Third quarter of 2004.
2. The rate of change of the Third quarter of 2004 were not presented because no settlement was made for the Third quarterof 2003.
2)Consolidated Financial Position¥ Millions
339,026
315,185¥ Millions
163,646
151,346

%
48.3
48.0

Shareholders Equity PerShare¥
1,285.37
1,189.92

310,793

156,21050.3

1,227.82

Net Cash Used for
Financial Activities¥ Millions-3,052-877

Balance of Cash and Cash
Equivalents at Term End¥ Millions
19,14019,418-1,832

21,033

Total Assets
Third Quarter Ended December 2004
Third Quarter Ended December 2003
(Reference)
Period Ended March 31, 2004

Shareholder's Equity Shareholder's Equity Ratio3)Consolidated Cash FlowsNet Cash fromNet Cash Used for
operating activities Investment Activities¥ Millions¥ Millions
Third Quarter Ended December 2004
1,585-2,043
Third Quarter Ended December 2003
3,556
-1,719(Reference)
Period Ended March 31, 2004
6,431
-1,6893. Consolidated Forecasts for the Year Ended March 31, 2005 (April 1, 2004 - March 31, 2005)
No change has been made to the forecasts published on April 30, 2004 both for the subsequent quarters and for the entire fiscal year.
Net Sales
Recurring Income
Net Income¥ Millions¥ Millions¥ Millions
Whole Year
568,000
15,00010,000(Reference) Expected EPS(Whole Year) ¥ 78.15*The above forecasts were prepared on the basis of information available on the date of release. Actual results may differ from theseforecasts due to various factors.

Business Results and Financial Position[Qualitative information of Progress of Management Performance (consolidated) andOthers]
Summary of Overall Company Performance
While the Japanese economy expanded backed by favorable exports centering on Asiaand strong domestic demand up to the third quarter, it is concerned that economic
growth will slow down due to inventory adjustment in digital related equipment andongoing high yen.
Under these circumstances, the business results up to the third quarter saw domestic
sales increased 3.4% year-on-year to ¥269.07 billion, while overseas sales rose 14.6%
year-on-year to ¥156.93 billion. As a result, sales increased 7.2% year-on-year to ¥426.0
billion.
On the income front, operating income increased 13.7% year-on-year to ¥10.5 billion
thanks to increased sales and others. Ordinary income rose 2.8% year-on-year to ¥12.1
billion. Net income jumped 40.2% year-on-year to ¥7.31 billion, in absence of
extraordinary losses booked in the previous third quarter due to the change inaccounting policies for retirement benefits.

Segment Summary[Chemicals]
Sales: ¥187.03 billion
Year-on-year increase of 7.7%
In the chemicals segment, sales in the color and imaging business including ink/toner
materials for copiers and printers and digital equipment use materials such as materials
for LCD-use color filters, and sales of coating materials and urethane materials for the
automotive industry and others expanded significantly. Meanwhile, sales in the specialty
chemical business handling surface active agents and industrial use oil solutions
increased only marginally and sales in the fine chemicals business including
pharmaceutical intermediates and others decreased marginally.
[Plastics]

Sales: ¥139.33 billion

Year-on-year increase of 10.2%

The business in so called the Greater China region including China, Hong Kong andTaiwan continued trending favorably. Resin materials and components for theautomotive industry expanded considerably both in Japan and overseas. Sales of1

materials related to exterior cladding of digital equipments and building materials also
increased. In addition, overall performance of Nagase group’s manufacturing companies
including Setsunan Kasei Co., Ltd, which engages in coloring and processing plastics
was favorable. As a result, overall sales expanded greatly.
[Electronics] Sales: ¥89.96 billion Year-on-year increase of 2.1%
In the electronic segment, sales in the business handling solutions for manufacturing
semiconductor and liquid crystal and supplying equipment increased dramatically.
Meanwhile, sales of liquid crystal related materials fell due to a fall in sales prices andothers. In addition, sales of precision abrasive compound expanded significantly, andsales of formulated epoxy resin manufactured by Nagase ChemteX Corp, and DVD
peripherals and others expanded. However, sales of components for telecommunicationequipment related business did not yet to recover.
[Healthcare and Others] Sales: ¥9.66 billion Year-on-year increase of 6.8%
While sales in the cosmetics and health foods related business increased marginally,
sales in the business related to medical equipment, medical information and clinical test
system related business remained flat.
[Qualitative Information on Changes in Financial Position (Consolidated) andothers]
Total assets amounted to ¥339.02 billion, up ¥28.23 billion compared to the previous
consolidated fiscal year end, mainly due to increases in account receivables andinventory assets.
Liabilities amounted to ¥170.93 billion, up ¥20.55 billion compared to the previous
consolidated fiscal year end, mainly due to increased account payables.
The shareholders’ equity increased by ¥7.43 billion over the end of previous
consolidated fiscal year to ¥163.64 billion. This is mainly due to an increase in retainedearnings.
As a result of the above, the shareholders’ equity ratio fell 2.0 percentage points to48.3% from 50.3% at the end of previous consolidated fiscal year.
[Status of Consolidated Cash flows]
Cash flows from operating activities amounted to ¥1.58 billion due to an increase inoperating funds and corporate tax payments, although the quarterly net income before
income taxes and minority interests amounted to ¥12.42 billion.

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Cash flows used for investing activities totaled ¥2.04 billion because of proactive
capital investment, although there was income from sales of part of investments insecurities.
Cash flows used for financing activities totaled ¥3.05 billion due to redemption of
corporate bonds and dividend payments etc., although there was income due to anincrease of short-term loans.
As a results of adjusting increases of cash and cash equivalents according to the newconsolidation, the balance of cash and cash equivalents at the end of the third quarterdecreased by ¥1.89 billion from the end of previous consolidated fiscal year to ¥19.14
billion.
[Qualitative Information on Performance Forecasts and Others]
As for full year consolidated forecasts for the year ended March 2005, we have adjusted
our initial consolidated forecasts for the entire fiscal year which were announced on
April 30, 2004, due to brisk performance of overseas subsidiaries centering in Asia, etc.
There are no adjustments to the non consolidated performance forecasts.
(Reference)(¥ Millions)
Net sales

Ordinary Income

Net income

Previous forecasts (A)568,000

14,2009,500

Revised forecasts (B)568,000

15,00010,000Change (B-A)

－

800

500

Y0Y increase rate (%)

－5.6

5.3

533,301

13,1107,010

Results of the year ended March 2004

[Revision of forecasts for dividend payments for the fiscal year ended March 2005]
Forecast figures for the fiscal year ended March 2005 are likely to exceed our previousforecasts. Accordingly, after considering return of profits to shareholders in accordance
to improvement of the business performance as well as generating stable dividends forshareholders in a comprehensive manner, we revised up cash dividends per share, fromour previous forecast of ¥8 to ¥10, an increase of ¥2 for the fiscal year ended March2005.

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