Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2020
<Under Japanese GAAP>
August 2, 2019
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 7, 2019
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, 2020
(April 1, 2019 to June 30, 2019)(1) Consolidated Operating Results(Percentages represent changes compared with same period of the previous fiscal year.)Net sales
For the first quarter ended
June 30, 2019
June 30, 2018
(Notes) Comprehensive income

Operating income

Millions of yen%

Millions of yen

Profit attributable toowners of the parent

Ordinary income%

Millions of yen%

192,986(2.8)
5,257 (24.2)
5,848 (23.5)
198,618
6.1
6,939
23.8
7,647
20.1
First quarter ended June 30, 2019: (¥52) million (―%)%

Millions of yen

4,156
5,495

(24.4)
57.8

First quarter ended June 30, 2018: ¥7,439 million (4.1% decrease)
Earnings per share
For the first quarter ended
June 30, 2019
June 30, 2018

Earnings per share (diluted)
Yen



Yen
33.51
43.89

(2) Consolidated Financial Position
Total assets

Net assets

Shareholders’equity ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

558,135
567,346

309,642
312,60954.6
54.2

2,458.43
2,481.01

June 30, 2019
March 31, 2019
(Reference) Equity capital

As of June 30, 2019:
As of March 31, 2019:¥ 304,874 million¥ 307,674 million

2. Dividends
1Q
For the year ended (or ending)March 2019
March 2020
March 2020 (estimate)

2Q

Annual Dividends per Share
3Q
Fiscal year end

Annual

Yen

Yen

Yen

Yen

Yen




18.00



24.00

42.00

22.00



22.00

44.00

(Note) Revisions to the latest projected dividends: No

3. Projected Consolidated Results for the Fiscal Year Ending March 31, 2020
(April 1, 2019 to March 31, 2020)(Percentages represent changes compared with the corresponding periods of the previous fiscal year.)Net sales
Millions of yen

Full fiscal year

850,000

Operating income

Profit attributable toowners of the parent

Ordinary income

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

%

Yen

5.2

3.1

1.3

1.8

165.31

26,00027,00020,500(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: Yes
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(Note)
Please refer to 2. Quarterly Consolidated Financial Statements and Notes (3) Notes related to Quarterly
Consolidated Financial Statements, (Change in Accounting Policy) on P.8 of this document.
(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, 2019
127,408,285 shares March 31,2019
127,408,285 shares
ii.

iii.

Number of treasury stock as of the fiscal period end
June 30, 2019
3,396,439 shares

March 31, 2019

3,396,352 shares

Average number of shares during the period
June 30, 2019
124,011,911 shares

June 30, 2018125,212,159 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 on P.3of this document.

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2020

Attachments
1. Qualitative Information

2(1) Business Performance2(2) Financial Position

3(3) Qualitative Information related to Consolidated Earnings Forecasts

3

2. Quarterly Consolidated Financial Statements and Notes

4(1) Quarterly Consolidated Balance Sheets

4(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income

6

Quarterly Consolidated Statements of Income

6

Quarterly Consolidated Statements of Comprehensive Income

7(3) Notes related to Quarterly Consolidated Financial Statements

8(Assumption for Going Concern)

8(Significant Fluctuations in Shareholders’ Equity)8(Change in Accounting Policy)

8(Segment Information, etc.)8(Significant Subsequent Events)

9

3. Supplementary Information

10(1) Overseas Sales

10

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1

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NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2020

1. Qualitative Information(1) Business Performancea. General Summary of Results
Although employment continues to improve, the Japanese economy experienced increased uncertainty in corporate earnings
and capital investment during the consolidated first quarter. The future direction of the global economy exhibited uncertainties
as well. Despite a push from strong corporate earnings in the United States, risk factors emerged, including protectionism
stemming from trade frictions between the U.S. and China, exchange rate fluctuations, and a slowdown in the Chinese
economy.
In this environment, the Company recorded domestic sales of ¥101.7 billion (-0.3% year on year) for the consolidated firstquarter. Overseas sales amounted to ¥91.28 billion (-5.5%). In total, the Company recorded ¥192.98 billion (-2.8%) in net
sales.
The Company recorded gross profit of ¥25.39 billion (-4.2%) in conjunction with lower revenues. Lower profits together withhigher general and administrative expenses led to operating income of ¥5.25 billion (-24.2%). Ordinary income amounted to¥5.84 billion (-23.5%), while profit attributable to owners of the parent amounted to ¥4.15 billion (-24.4%).

b. Segment Summary
Functional Materials
The Functional Materials segment recorded slightly lower sales in both domestic and overseas markets.
The Performance Chemicals business recorded slightly lower sales due to lower sales in coating raw materials and urethanematerials as a result of lower automotive production in Japan and overseas.
The Speciality Chemicals business recorded slightly lower sales overall due to decreased sales of electronics chemicals for thesemiconductor and other related electronics industries in Japan and overseas, as well as lower sales of industrial oil solutions.
As a result, sales for the segment amounted to ¥43.6 billion for the consolidated first quarter, representing a ¥460 million(-1.0%) decrease year on year. Operating income for the segment was ¥1.49 billion, representing a ¥140 million (+11.0%)
increase compared to the consolidated first quarter of the prior fiscal year due to improved sales mix.

Advanced Materials & Processing
The Advanced Materials & Processing segment recorded slightly lower sales in both domestic and overseas markets.
The Colors & Advanced Processing business recorded higher sales as a whole due to growth in digital print processing
materials in both Japan and overseas, as well as slight growth in sales of dyes and additives in Japan.
The Polymer Global Account business mainly sells plastics to the office equipment, appliance, and video game device markets.
The sales of those business decreased due to lower sales in Japan and Greater China.
As a result, sales for the segment amounted to ¥67.39 billion, representing a ¥1.32billion (-1.9%) decrease compared to thesame period in the prior fiscal year. Operating income fell ¥260 million (-11.7%) to ¥2.03 billion for the quarter.

Electronics
Despite increased sales of formulated epoxy resins and photolithography materials to the semiconductor industries, theElectronics segment recorded lower net sales overall due to lower sales of precision processing-related, equipment-related, anddisplay-related materials used in connection with intermediate processing in semiconductors.
As a result, sales for the segment amounted to ¥26.61 billion, which was a ¥2.66 billion (-9.1%) decrease year on year.
Operating income fell ¥590 million (-31.7%) to ¥1.27 billion for the quarter.

Mobility & Energy
The Mobility Solution business recorded lower overall sales, mainly due to lower sales in the resins business in Japan and－ 2 －NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2020

overseas, despite higher sales of car electronics-related products.
As a result, sales for the segment amounted to ¥32.54 billion, which was a ¥1.63 billion (-4.8%) decrease compared to theconsolidated first quarter of the prior fiscal year. Segment operating income fell ¥260 million (-33.8%) to ¥520 million.
(Note) As of the current consolidated first quarter, the name of the former Automotive & Energy Segment has been changed to
the Mobility & Energy Segment.

Life & Healthcare
The Life & Healthcare segment recorded higher sales due to slightly higher domestic sales and higher sales overseas.
Sales of TREHA™ and other products in the food ingredients field in the Life & Healthcare Products business were higher
overseas and slightly higher in Japan. Sales of AA2G™ to customers in the skin care and toiletries sectors were lower in Japan,
however sales overseas were higher, driven by favorable sales primarily in Europe. In the medical and pharmaceutical field,
sales of pharmaceutical raw materials and intermediates, as well as sales of medical materials increased. However, sales ofpharmaceutical business products were slightly lower. As a result, the business recorded higher sales compared to theconsolidated first quarter of the prior fiscal year.
The Beauty Care Products business, which includes sales of cosmetics and health foods, recorded slightly lower sales due to
weak performance across all product categories.
As a result, sales for the segment amounted to ¥22.69 billion, which was a ¥460 million (+2.1%) increase compared to theconsolidated first quarter of the prior fiscal year. Operating income grew ¥40 million (+3.5%), reaching ¥1.39 billion.

Other
No special matters to disclose.

(2) Financial Position
As of the end of the consolidated first quarter, current assets amounted to ¥356.81 billion. This represents a decrease of ¥9.01
billion compared to the end of the prior consolidated fiscal year, mainly due to decreases in accounts receivable andinventories. Non-current assets amounted to ¥201.32 billion, down ¥190 million. This was mainly due to a decrease in fairvalue of investments in securities, despite increases in business-use property, plant and equipment. As a result, total assets
decreased by ¥9.21 billion compared to the end of the prior consolidated fiscal year, down to ¥558.13 billion.
Liabilities amounted to ¥248.49 billion, which was a decrease of ¥6.24 billion compared to the end of the prior consolidated
fiscal year. This decrease was mainly due to redemption of bonds and decreased accounts payable, despite an increase incommercial paper.
Net assets amounted to ¥309.64 billion, down ¥2.96 billion. This decrease was mainly due to decreases in translation
adjustments and in net unrealized holding gain on securities, despite the Company recording profit attributable to owners of theparent in the amount of ¥4.15 billion.
As a result, the Company recorded a shareholders’ equity ratio of 54.6%, 0.4 points higher than the end of the priorconsolidated 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, 2019.
Furthermore, at the Board of Directors meeting held on June 3, 2019, the Company resolved to acquire a majority of shares ofPrinova Group, LLC through the Company’s wholly owned subsidiary Nagase Holdings America Corporation (established on
April 1, 2019), making Prinova Group, LLC and its subsidiaries consolidated subsidiaries, and entered into a share transfer
agreement. The impact that this matter may have on the Company’s consolidated earnings forecasts is currently under study.
Any issues that require disclosure in the future will be disclosed promptly.
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NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2020

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheets
Prior Consolidated Fiscal Year
(March 31, 2019)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
Net defined benefit assets
Deferred tax assets
Other
Less allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

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4

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(Millions of yen)First Quarter, Current
Consolidated Fiscal Year
(June 30, 2019)

44,068230,459
74,471
1,847
4,683
10,651(355)
365,827

41,220227,079
71,518
1,537
4,804
10,959(308)
356,81266,46768,301

23,866
10,6392,772
37,27923,294
10,245
2,583
36,12390,263
243
109
2,290
4,959
(92)
97,771
201,518
567,346

88,341
403
1,170
2,239
4,838
(95)
96,898201,323
558,135

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2020

Prior Consolidated Fiscal Year
(March 31, 2019)
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 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

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5

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(Millions of yen)First Quarter, Current
Consolidated Fiscal Year
(June 30, 2019)117,256
34,964949
12,00010,000
3,594
5,355
287
17,457
201,866

114,100
33,227811
20,000
1,414
2,779
70
20,835
193,239

10,00017,577
12,075
12,461757
52,870254,737

10,00017,456
11,95013,5162,330
55,253
248,493

9,699
10,647
247,617(5,070)262,892

9,699
10,647
248,865(5,071)
264,141

41,857
(7)
3,224
(292)
44,781
4,934
312,609567,346

40,107
ሺ331)
1,194
ሺ238)
40,732
4,768
309,642558,135

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2020

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive
Income(Quarterly Consolidated Statements of Income)Three-month periods ended June 30, 2019 and 2018
(Millions of yen)Three-month period ended
June 30, 2018
(April 1, 2018 - June 30, 2018)

Three-month period ended
June 30, 2019
(April 1, 2019 - June 30, 2019)

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

192,986
167,587
25,39920,142
5,257

58
819
67
247
129
1,323

26
904
66
18
156
1,173

360
157
96
614
7,647

358
122
100
582
5,848

20
1
6
28

9
17
25
52

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

1
18
20
5,879
912
764
1,676
4,203
47
4,156

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
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
Subsidy income
Total extraordinary gains
Extraordinary losses
Loss on sale of non-current assets
Loss on disposal of non-current assets
Total extraordinary losses
Income before income taxes and non-controlling interests
Income taxes - current
Income taxes - deferred
Total income taxes
Profit for the period
Profit attributable to non-controlling interests
Profit attributable to owners of the parent

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NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2020

(Quarterly Consolidated Statements of Comprehensive Income)Three-month periods ended June 30, 2019 and 2018
(Millions of yen)Three-month period ended
June 30, 2018
(April 1, 2018 - June 30, 2018)

Three-month period ended
June 30, 2019
(April 1, 2019 - June 30, 2019)

5,554

4,203

1,591
36
240
59

ሺ1,737)
ሺ332)
ሺ2,075)
53

(43)

ሺ163)

1,884
7,439

ሺ4,255)
(52)

7,449
(10)

113
ሺ165)

Profit for the period
Other comprehensive income
Net unrealized holding gain (loss) on securities
Deferred gain (loss) 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

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NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2020

(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.

(Change in Accounting Policy)
Beginning with the current consolidated first quarter, the Company has applied IFRS 16 Leases for overseas consolidated
subsidiaries that have adopted International Financial Reporting Standards. The impact of this accounting standard on quarterly
consolidated financial statements is minor.

(Segment Information, etc.)
Segment Information
I Three-month period ended June 30, 2018 (consolidated)
1. Information related to net sales and income (loss) by reportable segment(Millions of yen)
Reportable Segments
Advanced
Mobility &FunctionalLife &
Materials & Electronics
EnergyMaterials
Healthcare
Processing(Note) 1

Total

Other
(Note) 2

Total

Corporate Adjustments(Note) 3(Note) 4

To quarterly
consolidated
financialstatements(Note) 5

Net sales
Sales tocustomers

44,06868,72329,282

34,17822,223

198,476141

198,618--

198,618

Intersegment
sales/transfers

746

610

487

680

105

2,631

1,363

3,995

-

(3,995)-

Total

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

Segment income(loss)(Note) 1. As of the current consolidated first quarter, the name of the former Automotive & Energy Segment has been changed to the
Mobility & Energy Segment.
2. Other is a business segment consisting of businesses not included in reportable segments, and includes logistics services,
information processing services, and professional services.
3. Corporate segment income (loss) represents expenses not allocated to reportable segments or Other.
4. Adjustments are eliminations of intersegment transactions.
5. The sum of Segment income (loss), Corporate, and Adjustments is equivalent to operating profit as presented in the
consolidated statements of income.

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NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2020

II Three-month period ended June 30, 2019 (consolidated)
1. Information related to net sales and income (loss) by reportable segment(Millions of yen)
Reportable Segments
Advanced
Mobility &FunctionalLife &
Materials & Electronics
EnergyMaterials
Healthcare
Processing(Note) 1

Total

Other
(Note) 2

Total

To quarterly
consolidated
Corporate Adjustments
financial(Note) 3(Note) 4
statements(Note) 5

Net sales
Sales to43,606

67,394

26,61232,546

22,692

192,852

134

192,986--

192,986

456

541

431

727

128

2,285

1,484

3,770

-

ሺ3,770)-Total

44,06367,936

27,04433,273

22,820

195,138

1,618

196,756-

ሺ3,770)

192,986

Segment income(loss)

1,495

2,030

1,274

529

1,396

6,726

50

6,777

ሺ1,651)

131

5,257

customers
Intersegment
sales/transfers(Note) 1. As of the current consolidated first quarter, the name of the former Automotive & Energy Segment has been changed to the
Mobility & Energy Segment.
2. Other is a business segment consisting of businesses not included in reportable segments, and includes logistics services,
information processing services, and professional services.
3. Corporate segment income (loss) represents expenses not allocated to reportable segments or Other.
4. Adjustments are eliminations of intersegment transactions.
5. The sum of Segment income (loss), Corporate, and Adjustments is equivalent to operating profit as presented in the
consolidated statements of income.

(Significant Subsequent Events)
Significant Loans
To secure capital to acquire a majority of shares of Prinova Group, LLC through a wholly owned subsidiary Nagase Holdings
America Corporation (established on April 1, 2019), the Company executed the following loan agreements.
(1) Use of short-term loans
Loan to increase equity in Nagase Holdings America Corporation(2) Lender
Sumitomo Mitsui Banking Corporation(3) Loan amount¥65,000 million(4) Loan interest rate
0.33%(5) Date of loan
Aug 1, 2019(6) Borrowing period
One month initially, subsequently renewable to a maximum period of approximately fifteen months.
The Company plans to transition this loan to a long-term capital procurement during the borrowing period.
(7) Assets provided as collateral or guarantee
Not applicable.

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NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2020

3. Supplementary Information(1) Overseas Sales
I Three-month period ended June 30, 2018 (consolidated)
GreaterChina
I Overseas sales(Millions of yen)

ASEAN

51,169Americas28,438Europe

9,602

Other

3,452

Total

3,932

96,596

II Consolidated sales

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

25.8

14.3

4.8

1.7

2.0

48.6

II Three-month period ended June 30, 2019 (consolidated)
GreaterChina
I Overseas sales(Millions of yen)

46,678ASEAN

Americas27,789Europe

9,172

Other

3,766

Total

3,874

II Consolidated sales

192,986(Millions of yen)
III Ratio of overseas sales toconsolidated sales (%)

91,280

24.1

14.4

4.8

2.0

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

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47.3