Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024
<Under Japanese GAAP>

November 1, 2023

These financial statements have been prepared for reference only in accordance with accounting principles and practices generally accepted in Japan.

Stock exchange listing: Tokyo (Prime Market)
NAGASE & CO., LTD.
Code number:8012
URL (https://www.nagase.co.jp/english/)Representative:
Hiroyuki Ueshima, Representative Director and President
Contact:
Yoshihisa Shimizu, Executive Officer, General Manager, Corporate Management Department
TEL:+81-3-3665-3103
Filing of quarterly report (scheduled): November 8, 2023
Start of distribution of dividends (scheduled): December 4, 2023
Supplementary documents of quarterly financial results: Yes
Quarterly investors' meeting: Yes (for analysts and institutional investors)(Note: Amounts have been rounded down to the nearest million yen.)

1. Consolidated Results for the Second Quarter of the Fiscal Year Ending March 31, 2024
(April 1, 2023 to September 30, 2023)(1) Consolidated Operating Results
Net sales
For the second quarter
ended
September 30, 2023
September 30, 2022

Gross profit

Operating income(% = year-on-year change)

Profit attributable toowners of the parent

Ordinary income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

450,199455,549-1.2
21.9

78,896
79,383-0.6
15.5

14,48319,891-27.2
2.0

14,24520,284-29.8-0.9

10,247
15,594-34.3
6.6(Note) Comprehensive income

Second quarter ended September 30, 2023: ¥31,306 million (15.0% decrease)
Second quarter ended September 30, 2022: ¥36,815 million (106.3%)
Earnings per share

For the second quarter
ended
September 30, 2023
September 30, 2022

Earnings per share (diluted)
Yen

Yen

88.48
130.95−−(2) Consolidated Financial Position
Total assets

Net assets per share

Millions of yen

Millions of yen%

Yen784,728
762,688392,259
378,38849.1
48.2

3,368.93
3,139.26

September 30, 2023
March 31, 2023
(Reference) Equity capital

Shareholders’equity ratio

Net assets

As of September 30, 2023: ¥385,198 million
As of March 31, 2023: ¥367,675 million

2. Dividends
1Q
For the year ended (or ending)March 2023
March 2024
March 2024 (forecast)

2Q

Annual Dividends per Share
3Q
Fiscal year end

Annual

Yen

Yen

Yen

Yen

Yen

−
−

30.00
40.00

−

40.00

70.00

−

40.00

80.00

(Note) Revisions to the latest dividends forecast: No

3. Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2024
(April 1, 2023 to March 31, 2024)(% = year-on-year change)

Net sales
Millions of yen

Full fiscal year

900,000

Gross profit%-1.4

Millions of yen

Operating income% Millions of yen

163,000 4.9% Millions of yen

30,000 -10.1

Profit attributable toowners of the parent

Ordinary income

29,000%Millions of yen-10.8

22,500%-4.8

Earnings
per shareYen

195.86(Notes) 1. Revisions to the latest consolidated earnings forecast: Yes
2. For details, please refer to 1. Qualitative Information, (3) Qualitative Information Related to Consolidated Earnings Forecasts, on P.5of this document.

* Notes(1) Changes in major subsidiaries during the period (changes in specified subsidiaries accompanying changes in the scope of
consolidation): No
New: ― (Company name:)
Excluded: ― (Company name:)(2) Application of special accounting methods to the preparation of quarterly financial statements: Yes(Note) For details, please refer to 2. Quarterly Consolidated Financial Statements and Notes, (4) Notes Related to Quarterly Consolidated Financial
Statements (Special Accounting Treatment Applied in the Preparation of Quarterly Consolidated Financial Statements), on P.13 of thisdocument(3) Changes in accounting policies, 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) For details, please refer to 2. Quarterly Consolidated Financial Statements and Notes, (4) Notes Related to Quarterly Consolidated Financial
Statements (Change in Accounting Policy), on P.13 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)
September 30, 2023
117,908,285 shares
March 31, 2023
117,908,285 shares
ii.

iii.

Number of treasury stock as of the fiscal period end
September 30, 2023
3,569,899 shares

March 31, 2023

786,718 shares

Average number of shares during the period
September 30, 2023
115,817,285 shares

September 30, 2022

119,089,430 shares(Note) The number of treasury stock as of the fiscal period end includes Company shares held by the Stock-Granting Trust for Directors (292,200
shares as of September 30, 2023). Treasury stock deducted from the calculation of the average number of shares during the period includes
Company shares held by the Stock-Granting Trust for Directors (292,200 shares as of September 30, 2023).

* 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.
For matters related to earnings forecasts, please refer to 1. Qualitative Information, (3) Qualitative Information Related toConsolidated Earnings Forecasts, on P.5 of this document.

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

Attachments
1． Qualitative Information

2(1) Review of Business Performance2(2) Review of Financial Position

4(3) Qualitative Information Related to Consolidated Earnings Forecasts

5

2． Quarterly Consolidated Financial Statements and Notes

7(1) Quarterly Consolidated Balance Sheets

7(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income

9

Quarterly Consolidated Statements of Income
Six-month periods ended September 30, 2023 and 2022

9

Quarterly Consolidated Statements of Comprehensive Income
Six-month periods ended September 30, 2023 and 2022

10(3) Quarterly Consolidated Statements of Cash Flows

11(4) Notes Related to Quarterly Consolidated Financial Statements

13(Assumption for Going Concern)

13(Change in Accounting Policy)

13(Significant Fluctuations in Shareholders’ Equity)

13(Special Accounting Treatment Applied in the Preparation of Quarterly Consolidated Financial Statements) 13(Additional Information)

13(Segment Information, etc.)

14

1

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

1. Qualitative Information(1) Review of Business Performancea.

General Summary of Results

During the cumulative consolidated second quarter of the current fiscal year, the global economy showed signs of resilience; however,concerns remained about a slowdown during the second half of the fiscal year and beyond, mainly in Europe and the United States, due tothe effects of ongoing monetary tightening policies.
As an overview of the regions in which our group does business, the economy of Greater China saw a recovery in economic activity andpersonal consumption after the lifting of the Zero-COVID policy. However, concerns remained about an economic slowdown due to theextended real estate recession and sluggish corporate capital investment. In the Americas, the unemployment rate remained low, the rate ofprice increases slowed, and the economy showed signs of resiliency. However, concerns remained about an economic slowdown due to theeffects of ongoing monetary tightening policies. In ASEAN, the economy has been steady, mainly due to domestic and inbound demand. In
Japan, the economy is expected to continue recovering, particularly for exports. Consumer spending, particularly in the service-related sector,
and inbound demand remained strong, while we observed a pause in the sharp rise in raw materials and sales prices.
In this environment, earnings for the cumulative consolidated second quarter of the current fiscal year are as follows.
(Millions of yen)Six-month period
ended
September 30, 2022

Six-month period
ended
September 30, 2023

Net sales

455,549

450,199(5,350)(1.2)

Gross profit

79,38378,896

(486)

(0.6)

Operating income

19,891

14,483(5,407)(27.2)

Ordinary income

20,284

14,245(6,038)(29.8)

Profit before income taxes
Profit attributable to owners

21,027

14,881(6,146)(29.2)

ChangeChange (%)

15,594
10,247(5,347)(34.3)of the parent
・Despite the weakening of the yen, gross profit declined for the cumulative consolidated second quarter, mainly due to lower profitability
in the resin sales business under the Advanced Materials & Processing segment.
・Operating income declined due to a decrease in gross profit and an increase in selling, general and administrative expenses. For details,
see b. Segment Summary.
・Profit attributable to owners of the parent decreased ¥5.3 billion to ¥10.2 billion, mainly due to a decrease in tax expenses despite anincrease in interest expenses.

b.

Segment Summary

The following describes performance by segment.
Functional Materials(Millions of yen)Six-month period
ended
September 30, 2022

Six-month period
ended
September 30, 2023

Net sales

57,65052,855(4,795)(8.3)

Gross profit

11,463

10,640

(823)

(7.2)

Operating income

4,545

3,783

(761)

(16.8)

Change・Sales decreased for coating materials.
・Sales decreased for raw materials for industrial oil solutions and resins
・Sales decreased for raw materials for the electronics industry, including semiconductor-related products・Operating income decreased due to a decrease in gross profit

2

Change (%)

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

Advanced Materials & Processing(Millions of yen)Six-month period

Six-month period

ended
September 30, 2022

ended
September 30, 2023

Net sales

135,727

121,534(14,193)(10.5)

Gross profit

16,371

14,251(2,119)(12.9)

Operating income

5,041

3,144

(1,897)(37.6)

ChangeChange (%)

・Sales of resin declined due to lower demand in the office equipment, appliance, and video game device market and the impact of inventory
adjustments by customers
・Sales of pigments and additives remained sluggish
・Sales of digital print processing materials were lower, as was profitability in the manufacturing business・Operating income decreased due to a decrease in gross profit
Electronics & Energy(Millions of yen)Six-month period
ended
September 30, 2022

Six-month period
ended
September 30, 2023

Net sales

68,361

71,2112,850

4.2

Gross profit

15,763

16,344581

3.7

Operating income

5,151

5,439

287

5.6

ChangeChange (%)

・Despite weakening semiconductor market conditions, sales of materials to the semiconductor industry increased due to product line
expansion・Sales increased due to higher demand for formulated epoxy resins, mainly for server applications and mobile device applications
・Sales increased for photolithography materials for display applications
・Operating income increased due to an increase in gross profit
Mobility(Millions of yen)Six-month period

Six-month period

ended
September 30, 2022

ended
September 30, 2023

Net sales

61,14064,9073,766

6.2

Gross profit

7,213

7,391

178

2.5

Operating income

2,494

2,344

(149)

(6.0)

ChangeChange (%)

・Sales increased for resins, mainly due to boosted automobile production and expanded market share among existing customers.
・Sales increased for functional materials and functional components for interior and exterior fittings and electrification
・Although gross profit increased, operating income decreased due to higher selling, general and administrative expenses
Life & Healthcare(Millions of yen)Six-month period
ended
September 30, 2022

Six-month period
ended
September 30, 2023

Net sales

132,632

139,691

7,058

5.3

Gross profit

28,50830,1981,689

5.9

Operating income

6,682

5,185

(1,496)(22.4)

ChangeChange (%)

・Overall Prinova Group sales increased due to operations of the new plant in Utah and the weaker yen
・Sales of Hayashibara’s cosmetics materials increased
・Sales increased for pharmaceutical raw materials and intermediates
・Operating income decreased, despite higher gross profit, as personnel expense and other selling, general and administrative expenses
increased at the Prinova Group and profit contribution from the new Utah plant was delayed

3

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

OthersNo special matters to disclose.

(2) Review of Financial Positiona.

Assets, Liabilities and Net Assets
Prior Consolidated
Fiscal Year
(March 31, 2023)

Second Quarter,
Current Consolidated
Fiscal Year
(September 30,
2023)(Millions of yen)
ChangeChange (%)

Current assets

530,132

538,888

8,755

1.7

Non-current assets

232,556

245,840

13,284

5.7

Net assets

762,688784,728

22,0392.9Liabilities

384,300

392,469

8,168

2.1

Net assets

378,388392,259

13,871

3.7

48.2

49.1

+ 0.9 p－Shareholders’ equity ratio (%)

・Current assets increased mainly due to an increase in accounts receivable, despite a decrease in inventories, etc.
・Non-current assets increased due to an increase in property, plant and equipment and intangible fixed assets, and the fair values ofinvestments in securities
・Liabilities increased mainly due to an increase in accounts payable, despite a repayment in commercial paper and short-term loans
・Net assets increased mainly due to the recording of quarterly profit attributable to owners of the parent and an increase in translation
adjustments, despite decreases from purchases of treasury stock and payments of dividends
・As a result, the Company recorded a shareholders’ equity ratio of 49.1%, up 0.9 points compared to 48.2% from the end of the priorconsolidated fiscal yearb.

Consolidated Cash Flows(Millions of yen)Six-month period ended
September 30, 2022

Six-month period ended
September 30, 2023

Cash flows from operating activities(17,982)

38,232

Cash flows from investing activities(5,987)(6,411)

Cash flows from financing activities
11,550(36,689)
・Net cash provided by operating activities was mainly the result of an increase in cash of ¥23.3 billion due to a decrease in working capital,
the recording of ¥14.8 billion in profit before income taxes, and ¥6.6 billion in reserve of funds due to depreciation and amortization. Theseamounts were offset in part by ¥4.1 billion in income taxes paid and ¥2.0 billion in interest payments.
・ Net cash used in investing activities was mainly the result of cash outlays of ¥4.9 billion and ¥2.4 billion for the purchase of property,
plant and equipment and purchase of intangible fixed assets, respectively, offset in part by ¥1.6 billion in proceeds from the sales ofinvestments in securities.
・Net cash used in financing activities was mainly the result of a ¥16.2 billion net decrease in short-term loans, cash outlays of ¥6.6 billion
in purchases of treasury stock, ¥6.0 billion in the acquisition of stock of a subsidiary not resulting in a change in the scope of consolidation,and ¥4.6 billion in dividend payments.

4

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

(3) Qualitative Information Related to Consolidated Earnings Forecasts(Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2024)
During the cumulative consolidated second quarter of the current fiscal year, business performance was firm for the automobile-related
business, the Life & Healthcare-related business, and other businesses seeing an improved business environment. The automobile-related
business saw an easing in semiconductor supply shortages and an increase in automobile production volume, while the Life & Healthcarerelated business benefited from increased movement of consumers outside the home with the legal reclassification of COVID-19 to a Class
5 disease, etc. We expected our semiconductor-related business to see a recovery in earnest beginning in the second half of the fiscal year.
Performance in this business remained firm due to an expansion in product lineup and increased sales for server applications, even as theindustry as a whole experienced a delay in a full-fledged recovery.
Meanwhile, resin sales were impacted by a decline in demand for electronic and electrical products due to global inflation and the resulting
drop in market prices, leading to lower profit levels than anticipated originally. The Prinova Group experienced lower profit levels thanprojected, as the profit contribution from the new plant in Utah experienced delays due to a temporary delay in full-scale plant operations,while the food ingredient business was affected by a decline in profitability stemming from falling market prices, despite higher sales volume.
The external environment affecting our main businesses continues to be challenging. Demand for middle- and low-end smartphones, which
we assumed would begin to recover in earnest in the second half of the year, has not yet reached a full recovery due to the economic slowdown
in China.
While certain businesses continue to experience firm performance, we expect the overall environment to remain difficult in the second halfof the year and beyond. Therefore, we have decided to make a downward revision in our consolidated earnings forecast for the fiscal year.
We changed our assumed foreign exchange rates from ¥135 to ¥143 to the U.S. dollar, and we assume an exchange rate of ¥20 to the RMB.
a. Revised full-year consolidated earnings forecasts (April 1, 2023 to March 31, 2024)
Prior Forecast (A)Revised Forecast (B)Change (B-A)(Millions of yen)
Change (%)

Net sales

958,000

900,000(58,000)(6.1)

Gross profit

171,000

163,000(8,000)(4.7)

Operating income

34,50030,000(4,500)(13.0)

Ordinary income

32,60029,000(3,600)(11.0)

24,00022,500(1,500)(6.3)

Profit attributableowners of the parent

tob. Revised full-year earnings forecasts by segment (April 1, 2023 to March 31, 2024)(Net sales by segment)(Millions of yen)
Prior Forecast (A)*

Revised Forecast (B)115,000

154,000

39,00033.9

270,000

197,000(73,000)(27.0)

Electronics & Energy

150,000

139,000(11,000)(7.3)

Mobility

135,600

129,900(5,700)(4.2)

Life & Healthcare

287,300

280,000(7,300)

(2.5)

100

100

－

－

958,000

900,000(58,000)(6.1)

Functional Materials
Advanced Materials &Processing

OthersTotal net sales

5

Change (B-A)

Change (%)

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

(Gross profit by segment)(Millions of yen)
Prior Forecast (A)*

Revised Forecast (B)22,90027,500

4,600

20.1

34,30023,600(10,700)(31.2)

Electronics & Energy

33,80033,500

(300)

(0.9)

Mobility

15,60014,900

(700)

(4.5)

Life & Healthcare

64,30063,400

(900)

(1.4)

100

100

－

－

171,000

163,000(8,000)(4.7)

Functional Materials
Advanced Materials &Processing

OthersTotal gross profit

Change (B-A)

Change (%)(Operating income by segment)(Millions of yen)

Prior Forecast (A)*

Revised Forecast (B)Change (B-A)

Change (%)

Functional Materials

8,900

8,300

(600)

(6.7)

Advanced Materials &Processing

11,0006,900(4,100)(37.3)

Electronics & Energy

10,600

11,100500

4.7

Mobility

5,100

4,800

(300)

(5.9)

Life & Healthcare

11,30010,800

(500)

(4.4)

Others(12,400)(11,900)

500

4.0

Total operating income

34,50030,000(4,500)(13.0)*Figures from FYE March 2023 Financial Highlights announced on May 9, 2023, P.16. We changed our business segment classifications on
October 1, 2023; however, the figures presented represent figures prior to segment reclassification.

6

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheets
Prior Consolidated Fiscal Year
(March 31, 2023)
ASSETS
Current assets
Cash and time deposits
Notes and accounts receivable and contract assets
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
Retirement benefit asset
Deferred tax assets
Other
Less allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

7(Millions of yen)
Second Quarter, Current
Consolidated Fiscal Year
(September 30, 2023)

40,897302,105
152,504
2,446
14,77018,429(1,021)
530,132

40,817
324,546
137,639
3,055
13,52020,118(809)
538,888

82,06486,50229,004
4,337
35,58768,92829,464
3,549
39,03572,04869,743
17
2,645
3,857
5,475
(176)
81,562
232,556
762,688

75,268
26
2,844
3,754
5,572
(176)
87,289245,840
784,728

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

Prior Consolidated Fiscal Year
(March 31, 2023)
LIABILITIESCurrent liabilities
Notes and accounts payable
Short-term loans
Current portion of long-term loans
Commercial paper
Accrued income taxes
Accrued bonuses for employees
Accrued bonuses for directors
Other
Total current liabilities
Long-term liabilities
Bonds
Long-term loans
Lease liabilities
Deferred tax liabilities
Retirement benefit liability
Provision for directors’ stock benefit
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

8(Millions of yen)
Second Quarter, Current
Consolidated Fiscal Year
(September 30, 2023)

140,438
66,117
1,056
38,000
2,913
6,985
371
30,321
286,203

156,759
55,9432,964
36,000
4,057
6,478
134
28,289290,627

30,00032,697
9,763
10,36013,19765
2,012
98,097384,300

30,00031,474
13,306
11,31813,21130
2,499
101,841
392,4699,699
10,636290,279(1,550)309,064

9,699
9,348
295,830(8,228)306,650

28,928(7)30,414(726)
58,61010,713378,388762,688

32,729300
45,912(394)
78,547
7,061
392,259784,728

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

(2) Quarterly Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)Six-month periods ended September 30, 2023 and 2022

(Millions of yen)Six-month period ended
Six-month period ended
September 30, 2022
September 30, 2023
(April 1, 2022 - September 30, 2022) (April 1, 2023 - September 30, 2023)
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 gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on sales of non-current assets
Gain on sales of investment securities
Subsidy income
Other
Total extraordinary gains
Extraordinary losses
Loss on sales of non-current assets
Loss on disposal of non-current assets
Loss on sales of investment securities
Loss on valuation of investments securities
Other
Total extraordinary losses
Income before income taxes
Income taxes
Profit for the period
Profit attributable to non-controlling interests
Profit attributable to owners of the parent

9455,549
376,166
79,38359,491
19,891

450,199
371,30278,89664,413
14,483

57
831
124
165
449
212
1,841

130
778
117
217
539
236
2,020

1,207
240
1,448
20,284

1,924
334
2,258
14,245

127
1,335
－
1
1,465

55
923
500
45
1,524

28
205
7
457
23
722
21,0275,000
16,026431
15,594

3
696
21
104
63
888
14,881
4,256
10,625377
10,247

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

(Quarterly Consolidated Statements of Comprehensive Income)Six-month periods ended September 30, 2023 and 2022

(Millions of yen)Six-month period ended
Six-month period ended
September 30, 2022
September 30, 2023
(April 1, 2022 - September 30, 2022) (April 1, 2023 - September 30, 2023)
Profit for the period
Other comprehensive income
Net unrealized holding (loss) gain on securities
Deferred gain on hedges
Translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive gain 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

10

16,026

10,625(2,552)363
22,155
90

3,797
307
15,753
331

731

491

20,78936,815

20,681
31,30635,3581,457

30,184
1,121

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

(3) Quarterly Consolidated Statements of Cash Flows
Six-month periods ended September 30, 2023 and 2022

(Millions of yen)Six-month period ended
September 30, 2022

(April 1, 2022 - September 30, 2022)

Operating activities
Income before income taxes
Depreciation and amortization other than amortization of
goodwill
Amortization of goodwill
Subsidy income
Increase in retirement benefit liability(Increase) decrease in retirement benefit asset
Interest and dividend income
Interest expenses
Exchange gain, net
Gain on sales of investment securities, investments incapital, shares of subsidiaries and affiliates, andinvestments in capital of subsidiaries and affiliates, net
Increase in notes and accounts receivable(Increase) decrease in inventories(Decrease) increase in notes and accounts payable
Other
SubtotalInterest and dividends received
Interest paid
Proceeds from subsidy income
Income taxes paid
Net cash (used in) provided by operating activities
Investing activities
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of intangible fixed assets
Purchases of investments in securities
Proceeds from sales of investments in securities
Purchases of investments in capital
Proceeds from sales of shares of subsidiaries resulting inchange in scope of consolidation
Increase in short-term loans receivable included in othercurrent assets
Decrease in time deposits, net
OtherNet cash used in investing activities
Financing activities
Increase (decrease) in short-term loans, net
Increase (decrease) in commercial paper, net
Repayments of long-term loans
Proceeds from issuance of bonds
Redemption of bonds
Purchase of treasury stock
Cash dividends paid
Cash dividends paid to non-controlling interests
Payments for purchases of shares of subsidiaries not
resulting in change in scope of consolidation
Other
Net cash provided by (used in) financing activities

11

Six-month period ended
September 30, 2023

(April 1, 2023 - September 30, 2023)

21,027

14,881

5,895

6,662

1,246
－
379
(27)
(889)
1,207
(2,823)

1,288
(500)
501
246
(908)
1,924
(1,314)(1,327)(902)(11,298)(11,960)(6,307)(3,880)(8,758)
1,073(1,156)－(9,140)(17,982)(11,599)
24,901
10,002(2,272)
42,9101,024(2,040)500(4,161)
38,232(5,725)495(2,370)
(228)
1,651
－

(4,947)93(2,438)
(394)
1,604
(202)

－

(244)

(601)

(245)

239
550
(5,987)322
40(6,411)

6,389
14,000(529)
10,000(10,000)(3,227)(3,600)(1,133)(16,269)(2,000)(17)－－(6,677)(4,696)(603)－(6,002)(347)
11,550(422)(36,689)

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

(Millions of yen)Six-month period ended
September 30, 2022

(April 1, 2022 - September 30, 2022)

Effects of exchange rate changes on cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Decrease in cash and cash equivalents resulting from changes
in fiscal year-end of consolidated subsidiaries
Cash and cash equivalents at end of the period

12Six-month period ended
September 30, 2023

(April 1, 2023 - September 30, 2023)

4,754(7,664)53,336

5,082
213
40,331(204)－

45,46740,545

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

(3) Notes Related to Quarterly Consolidated Financial Statements(Assumption for Going Concern)
No matters to report.
(Change in Accounting Policy)(Adoption of U.S. FASB Accounting Standards Codification (ASC) No. 326, Financial Instruments-Credit Losses)
Certain foreign consolidated subsidiaries that adopted U.S. GAAP apply ASC No. 326, Financial Instruments-Credit Losses,
at the beginning of the consolidated first quarter of the current fiscal year. As a result, the subsidiaries in question are required
to revise the methods used to measure financial instruments and recognize impairment of financial assets using the expectedcredit loss model.
In applying this accounting standard, the subsidiary recognized the cumulative effect as of the date of adoption, which ispermitted under the transitional provisions.
The impact of this accounting treatment on the quarterly consolidated statements of income is immaterial.
(Significant Fluctuations in Shareholders’ Equity)
Following a resolution by the Company’s board of directors at a meeting held May 9, 2023, the Company acquired 2,782,900
shares of treasury stock in the cumulative second quarter of the current consolidated fiscal year. As a result, treasury stockincreased by ¥6,676 million, with treasury stock holdings of ¥8,228 million as of the end of the consolidated second quarter.
(Special Accounting Treatment Applied in the Preparation of Quarterly Consolidated Financial Statements)(Calculation of Tax Expenses)
Tax expenses are calculated by rationally estimating an effective tax rate after applying tax effect accounting to profit before
income taxes for the consolidated fiscal year, including the current second quarter, and multiplying profit before income taxes
for the first quarter by the estimated effective tax rate.
In the event that the calculated tax expenses using this estimated effective tax rate lead to significantly unreasonable results, thisshall be calculated by multiplying the statutory effective tax rate after adjusting significant non-temporary differences by the
profit before income taxes.
Deferred income taxes are included in income tax.
(Additional Information)(Stock-Based Compensation Plan)
Effective as of the previous consolidated fiscal year, the Company has adopted a stock-based compensation plan (“Plan”) for
directors (excluding outside directors) and executive officers (collectively, “Eligible Individuals”). The purpose of the Plan is toestablish a clear link between compensation for Eligible Individuals and Company performance and share value, as well as for
Eligible Individuals to share the benefits and risks associated with fluctuations in NAGASE share price with shareholders. In
this way, the NAGASE Group intends to raise awareness about contributing to improved business performance and increased
corporate value over the medium to long term.
(1) Overview
The Plan is a stock-based compensation plan under which a trust ("Trust") established by monetary contribution from theCompany acquires Company shares. The Company grants points to each Eligible Individual, and the Trust delivers the numberof Company shares equivalent to the points earned by each Eligible Individual. In principle, said delivery is made at the time of
the retirement the Eligible Individual.
(2) Company shares remaining in the Trust
Company shares remaining in the Trust are recorded as treasury stock under net assets in the balance sheet based on the carrying
value in the Trust (excluding incidental expenses). The carrying value of said treasury stock as of the end of the consolidated
second quarter was ¥619 million and the treasury stock in question amounted to 292,200 shares.

13

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

(Segment Information, etc.)

Segment Information
I Six-month period ended September 30, 2022 (consolidated)
1. Information related to net sales and income (loss) by reportable segment
Reportable Segments
Advanced
Functional
Electronics &Life &
Materials &Mobility
EnergyMaterials
Healthcare
Processing

Total(Millions of yen)
Others(Note) 1

Total

Corporate Adjustments Consolidated(Note) 2(Note) 3(Note) 4

Net sales
Sales tocustomers
Intersegment
sales/transfers

57,650135,727

68,361

61,140132,632

455,51336

455,549－－455,549

494

415

1,143

911

238

3,204

3,529

6,733

－

(6,733)－

Total

58,144

136,143

69,50462,052

132,871458,7173,566

462,283－(6,733)455,549

Segment income(loss)

4,545

5,041

5,151

2,494

6,682

23,91530

23,946(4,258)204

19,891(Note) 1.

“Others” is a business segment consisting of businesses not included in Reportable Segments, and includes information
processing services and professional services.

2.
3.

Corporate segment income (loss) represents expenses not allocated to Reportable Segments or Others.
Adjustments are eliminations of intersegment transactions.

4.

The sum of segment income (loss) Total, Corporate, and Adjustments is equivalent to operating income as presented in“Consolidated”.

II Six-month period ended September 30, 2023 (consolidated)
1. Information related to net sales and income (loss) by reportable segment
Reportable Segments
Advanced
Functional
Electronics &Life &
Materials &Mobility
EnergyMaterials
Healthcare
Processing

Total(Millions of yen)
Others(Note) 1

Total

Corporate Adjustments Consolidated(Note) 2(Note) 3(Note) 4

Net sales
Sales tocustomers
Intersegment
sales/transfers

52,855

121,534

71,21164,907

139,691

450,1990450,199－－

450,199

591

325

1,760

1,533

361

4,572

3,841

8,414

－

(8,414)－

Total

53,446

121,860

72,972

66,440140,052

454,771

3,841

458,613－(8,414)450,199

Segment income(loss)

3,783

3,144

5,439

2,344

5,185

19,897135

20,033(5,827)277

14,483(Note) 1.

“Others” is a business segment consisting of businesses not included in Reportable Segments, and includes information
processing services and professional services.

2.
3.

Corporate segment income (loss) represents expenses not allocated to Reportable Segments or Others.
Adjustments are eliminations of intersegment transactions.

4.

The sum of segment income (loss) Total, Corporate, and Adjustments is equivalent to operating income as presented in“Consolidated”.

14