Nissan Chemical Corporation
3Q FY2020 Financial Results Briefing
Presenter: MIYAZAKI Junichi Director, Senior Executive Vice President, CFO
February 5, 2021

Miyazaki: This is Miyazaki. Page two of the material shows the results of the third quarter. Where you see“3Q“ in the middle. Sales were JPY43.7 billion. Operating profit was JPY5.6 billion. Net income was JPY4.5
billion. As a result, the cumulative sales for the first to third quarters were JPY138.2 billion. Operating profit
was JPY23.6 billion. Net income was JPY18.4 billion.
Please refer to the YoY change on the right.
For the third quarter alone, operating profit increased by JPY2.1 billion. Net income increased by JPY1.4 billion.
As for the cumulative total of the first to third quarters, operating profit increased by JPY2.1 billion. Net
income increased by JPY0.8 billion.
Compared to the forecast for the third quarter, as presented on the rightmost ((B)-(C)), sales decreased by
JPY1 billion, while operating profit increased by JPY1.4 billion and net income increased by JPY0.8 billion.

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Next, page three is the highlight of the financial results for the 3Q. First of all, (1) shows the YoY comparison
for the third quarter alone. As you can see on the first line, operating profit was JPY5.6 billion, an increase of
JPY2.1 billion, or 60%, compared to JPY3.5 billion in the same period of the previous year.
Operating profit increased for Chemicals, Performance Materials, and Agrochemicals, but decreased for
Pharmaceuticals. I will explain details by each segment later. Net income was JPY4.5 billion, an increase of
JPY1.4 billion, or 45%, from JPY3.1 billion in the same period of the previous year.
Next, 2) is the comparison with forecast.
Operating profit was JPY5.6 billion, JPY1.4 billion higher than the forecast of JPY4.2 billion. By segment,
Chemicals was as expected, Performance Materials was higher than the outlook, Agrochemicals was lower,
and Pharmaceuticals was lower. The forecast for net income was JPY3.7 billion, and the result was JPY4.5
billion, JPY0.8 billion higher.
Next, (2) is the total of the first through third quarters.
Operating profit was JPY23.6 billion, an increase of JPY2.1 billion from JPY21.5 billion for the same period of
the previous year. This is a 9% increase. Operating profit decreased for Chemicals, increased for Performance
Materials, decreased for Agrochemicals, and decreased for Pharmaceuticals. Last year, net income was
JPY17.6 billion. This year, it was JPY18.4 billion, an increase of JPY0.8 billion or 4%.

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Next, page four. We will not change the full-year earnings forecast.
The results for the third quarter alone exceeded expectations, but we will not change the full-year earnings
forecast as there is a possibility that the 4Q alone will fall below the forecast.
Below that, No. 3 describes the sales trends of major products by segment in the fourth quarter alone. The
tendency is as shown by the arrow.
First is the Chemicals. Regarding Fine Chemicals, there is a high possibility that the quantity of TEPIC andenvironmental related products will be lower than expected. As for Basic Chemicals, there is a high possibility
that the demand for export of melamine will be higher than expected.
Let’s look at the Performance Materials. Regarding the Display, there is a high possibility that the sales will bedown because some photo-alignment sales of SUNERVER were posted ahead of schedule in the third quarter.
Regarding the Semis materials, there is a possibility that ARC see a higher sales than outlook due to highoperation capacity at customers. Regarding Inorganic, sales of SNOWTEX’s polishing materials are strong, andthere is a possibility that this will also be above target.
Next is agrochemicals excluding Fluralaner in the Agrochemicals business. Sales of DITHANE will be above
outlook, since it acquired the business from Corteva. I'll explain this later on page 24. Regarding Fluralaner,
Royalties are estimated to be affected by the exchange rate, so there is a possibility of lower sales than theoutlook.
Regarding Pharmaceuticals, we expect the volume of LIVALO to fall. Custom Chemicals will be above theoutlook because generic API products are doing well.

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Therefore, as I said, there are both positive and negative factors, so we will not change the forecast this time.

Please see page five. We skip the 3Q review.

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Please refer to the 1-3Q review on page six. There is an extraordinary income/loss of 1.1 billion yen. As forbreakdown, the gain on sales of securities was JPY1.1 billion for 13 issues. Of which, we sold all of the shares
held for 10 issues.
Next, I would like to touch on shareholder returns. Regarding dividends, there is no change from the forecast
as of the second quarter briefing session. We will pay JPY46 interim dividend and JPY52 year-end dividend.
An acquisition of treasury stock was carried out at JPY7 billion in the first half, and as announced today, it isplanned that we will acquire JPY3 billion, or 800,000 shares, by the end of April from next week.
Total payout ratio is calculated to be 76.7% based on the current earnings forecast, assuming a dividend of
JPY98 and a share repurchase of JPY10 billion.

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Next, page seven is non-operating income/loss and extraordinary income/loss. Please take a look-see later.

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Next is page eight, cash flow.
For the first to third quarters, the free cash flow in FY2019 was JPY22 billion. Operating cash flow plus
Investment cash flow was JPY22 billion. For the first to third quarters in the current fiscal year, free cash flow
was JPY23.7 billion, an increase of JPY1.7 billion.
I would like to make two points here. The item “Others” with note (3) under the investment cash flow includes
the fund for the acquisition of QUINTEC last year and the acquisition of DITHANE this year.
Of this amount of the item “Other” with (4), JPY1.7 billion is the unexecuted portion of the share buyback oflast year. Last year, payout to shareholders (share repurchase) was JPY8.3 billion, and JPY1.7 billion has notbeen executed and has been deposited in a trust bank, so this negative figure is included.

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Next, let’s go to page nine, the balance sheet.
As you know, the pattern of our results changes greatly depending on the trends of accounts receivable andinventories of Agrochemicals, so here we have a comparison table for December 2019, March 2020, andDecember 2020.
Accounts receivable was JPY72.5 billion in March 2020. It was JPY47.3 billion in December 2020. This decreaseof JPY25.2 billion is mostly due to the recovery of accounts receivable for Agrochemicals. This JPY47.3 billion
is almost the same as JPY47.8 billion in December 2019.
On the other hand, as for inventories below that, this time we are in the process of making up for March andApril in the current fiscal year, but it is about JPY4 billion more than December 2019. The main reason for thisis the increase in inventory of ALTAIR and GRACIA.
Intangible assets were JPY7.4 billion in March and JPY12.3 billion this term. Most of the increase was theincrease in intangible fixed assets related to the acquisition of DITHANE.
Listed shares in investment securities were JPY20.7 billion in March. We also sold the stock in the current
fiscal year, but since the overall stock price has risen, listed shares have increased by JPY3.1 billion.
Equity ratio was 79.2% at the end of December.

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Next, let’s look at the segment analysis. Page 11 is a table of sales.

9Please go to page 12. Operating profit.
I would like to talk about the cumulative total of the first to third quarters compared to the same period of
the previous year, which is indicated in the middle of the table. For Chemicals, the cumulative total of 1Q to
3Q decreased by JPY0.2 billion. For Performance Materials, Cumulative operating profit increased by JPY3.9
billion. For Agrochemicals, it decreased by JPY1.1 billion. For Pharmaceuticals, it decreased by JPY0.6 billion.
For Trading, it increased by JPY0.3 billion. The total result including others increased by JPY2.1 billion.
For a comparison with the 3Q forecast, please see (B)-(C) on the right. Operating profit of Chemicals for the
3Q was as expected. Operating profit for the Performance Materials was JPY1.4 billion higher than the outlook.
For the Agrochemicals, operating profit was JPY0.6 billion higher than the outlook. Pharmaceuticals saw alower operating profit by JPY0.1 billion. Including others, the overall result was JPY1.4 billion higher than theoutlook.

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Next is the status of each segment.
First, Chemicals. Page 13. It is a table of sales, operating profit, financial performance trends, and profit margin
trends as usual.

11Page 14 shows the growth rate of sales of major products.
I would like to talk about individual products along with profit trends. Looking at this table, the total increase
for Fine Chemicals was 6% in 1Q to 3Q, which is lower than expected.
Next is the Basic Chemicals. A total for the 1Q to 3Q declined 17%. This is a better figure than forecast.

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On the next 15 pages, I will explain the earnings trends of Chemicals.
First of all, as described right of the table, the product called FINEOXOCOL has been shifting from Basic
Chemicals to Fine Chemicals from this term, so this had an effect on figures. All figures are calculated on theassumption that FINEOXOCOL is included in Basic Chemicals in FY2019 and in Fine Chemicals in FY2020.
First of all, as for the YoY comparison of the third quarter results of FY2020, in Fine Chemicals, sales fromTEPIC for general applications increased. Sales from TEPIC for powder coatings have slightly recovered. TEPIC
for electronic materials has made recovery in the area of printed circuit board for automobiles. Sales fromenvironmental products have also recovered slightly. Including the transfer of FINEOXOCOL, sales increased
and operating profit has also increased.
Next, Basic Chemicals. Urea including AdBlue, high-purity sulfuric acid, and nitric acid products increased sales,
while melamine exports continued to decrease. Melamine domestic has also decreased sales.
On the other hand, due to the low price of raw materials and fuels, sales decreased, but operating profit
increased. For the segment as a whole, sales decreased by JPY0.4 billion and operating profit increased by
JPY0.2 billion.
Next is the comparison between the 3Q results and the forecasts. In Fine Chemicals, TEPIC for generalapplication and for electronic materials saw higher results. Environmental related products and FINEOXOCOL
saw lower results.
Due to the impact of inventory fluctuations, the downturn in the production of environmental products had
a negative effect, and as a result, both sales and operating profit of fine chemicals were below forecasts.

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As for Basic Chemicals, results for export and domestic melamine, urea including AdBlue, and nitric acidproducts were above forecasts. The results for high-purity sulfuric acid were below forecasts. Here, the low
price of raw materials and fuel has worked positively, and both sales and profits were higher than forecasts.
In total, in the segment, sales were JPY0.2 billion higher and operating profit was as expected.
Let’s look at 1Q to 3Q cumulative on the right side.
In fine chemicals, TEPIC for general application declined due to the slump in the first half. Also as for TEPIC forelectronic materials, the cumulative total for 3Q decreased due to the decline in the first half. Environmental
products declined due to sales for domestic pools and spas have decreased despite sales for export has
increased.
On the other hand, the low price of raw materials and fuel has been effective for three consecutive quarters.
As a result, sales increased and operating profit also increased.
Next, basic chemicals. Sales increased for high-purity sulfuric acid and nitric acid products for semiconductors.
Sales declined for domestic and export melamine and urea including AdBlue. As with fine chemicals, the low
price of raw materials and fuel had a positive effect. In basic chemicals, both sales and operating profit
decreased.
Overall, sales decreased by JPY2.5 billion, but operating profit decreased only JPY0.2 billion.

Next, we will move on to the Performance Materials on page 17. Page 17 shows the movement of sales andoperating profit as with Chemicals.

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Then, page 18 is a bar graph for 1Q to 3Q results of displays, semis, and inorganic in FY2019, plans for FY2020,
results for FY2020, respectively.

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Next, page 19 shows the growth rate of sales of major products.
SUNEVER increased sales by 7% in total of 1Q to 3Q. It is above the plan.
Sales of semiconductor materials increased by 24%. It is also above the plan.
In inorganic, SNOWTEX saw a 4% increase. Organo/Monomer sol saw a decline of 3%. Oilfield Materials saw
a 2% increase as new contracts are in the third quarter. Sales of inorganic decreased 1% as a whole.

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Then turn to page 20. It is the trend of SUNEVER by mode. As you can see, sales from TN decreased and from
VA increased in the 3Q. IPS, the sum of rubbing and Photo, resulted in an increase in sales.

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Next is the earnings trend of the Performance Materials. Please turn to page 21.
First of all, please refer to the YoY comparison of 3Q results on the leftmost. Sales of displays increased, while
operating profit decreased. Sales of Photo IPS for non-smartphones, for notebook PCs, tablets, monitors, etcetera were very strong and increased.
On the other hand, rubbing IPS saw a decline due to the shift to Photo. Sales of VA increased. Sales of TN
decreased. Sales increased, but fixed costs increased, including testing costs and factory depreciation costs.
As a result of the increase in this area, sales increased and operating profit decreased in the 3Q.
In semis, sales and operating profit increased. ARC and other products have all performed very well, and weachieved a significant increase in sales and operating profit, partly due to a slight decrease in fixed costs.
Looking at inorganic, the non-polishing of SNOWTEX was flat, but sales increased mainly for polishing of siliconwafer. Sales of Organo/Monomer sol increased. Sales of oilfield materials have increased for the first time ina while.
Sales for the entire segment increased by JPY2.2 billion, resulting in an increase in operating profit of JPY1.6
billion.
The comparison with the forecast is in the middle. Sales from display were above forecast due to similar
factors. Operating profit has also exceeded the forecast. Sales and operating profit of semiconductor materials
are also significantly higher than the forecast. Results for ARC, multi-layer materials, and other new materials
were all above forecasts.

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Sales and operating profit of inorganic materials were also above forecasts. SNOWTEX saw a higher results.
Organo/Monomer sol and oilfield materials were also above forecasts. As a whole, the reduction of fixed costs
was a small amount of JPY0.1 billion, but overall sales were JPY1.7 billion higher than the forecast. Operating
profit was also significantly higher at JPY1.4 billion.
The rightmost is the cumulative value of 1Q to 3Q.
Sales and operating profit of display materials increased, supported by strong sales of Photo IPS for nonsmartphone applications, while sales of rubbing IPS decreased. VA sales declined, and TN sales declined, but
overall operating profit increased. Fixed costs have increased by JPY0.4 billion in this area.
On the other hand, as I mentioned earlier, semis are performing very well, so we have secured a significant
increase in sales and profit, and fixed costs reduction of JPY0.7 billion also had a positive effect.
As for inorganic, sales decreased while operating profit increased, due to fixed cost reduction of JPY0.4 billion.
For the total segment, fixed costs have decreased by JPY0.8 billion in the cumulative total of 1Q to 3Q. Overall,sales increased by JPY5.4 billion. Operating profit also increased by JPY3.9 billion.

Next is the Agrochemicals. Please turn to page 23. As with other segments, this is a table of sales, operating
profit, and business performance trends.

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For individual products, see the table on the left on page 24.
The YoY sales trend of the cumulative total of 1Q to 3Q is shown.
Sales from Fluralaner decreased 15%, which is in line with the 3Q plan.
Sales from ROUNDUP increased 3%. Sales from ALTAIR also increased 5%. The result of ROUNDUP was above
the plan, while ALTAIR was below.
Sales of TARGA decreased 1%, below the plan. Sales of GRACIA decreased 22%, far below the plan.
Sales of PERMIT increased 5%, above the plan. Sales of LEIMAY decreased 5%, below the plan. QUINTEC was
just launched in December 2019, so it made a huge increase, but it was below the plan.
As for the total segment, sales declined 4% YoY, which was below the plan.
In summary, the 1Q to 3Q cumulative total sales increased YoY in QUINTEC, ROUNDUP, ALTAIR, et cetera, but
the sales decrease in Fluralaner and GRACIA was far larger.
For GRACIA, please see the brown bar graph at the bottom left. You see the actual value for 1-3Q FY2019, theplanned value for 1-3Q FY2020, and the actual value for 1-3Q FY2020.
As you can see, in the 1-3Q of this fiscal year, the results were lower than the actual result in FY2019 and far
below the plan.

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In the first half of the year, the weather was very unseasonable, so there were very few pests due to lowtemperatures and inventory was piled up. Even in the third quarter, there was a long autumn rain in Japan,
so inventory could not be reduced.
In the third quarter, the weather was unseasonable due to the large number of autumn typhoons in South
Korea. As a result, sales of GRACIA was far below the plan.
Then, about DITHANE is written in red on the right side.
We acquired Japanese and Korean businesses from Corteva in December of last year, and started domestic
sales in this January. This is a protective fungicide for fruit trees, especially apples and citrus fruits, andvegetables, and it has rain resistance, has a very large mechanism of action, and is stable with very little
resistance.
DITHANE's earnings forecast is as written below. Operating profit is calculated under the five year straight line
method of amortization.
As a result of the audit, the depreciation of QUINTEC has been decided to be about eight years. DITHANE has
not yet been audited, so we have tentatively calculated it in five years.

Next, go to page 25. This is Fluralaner. There's no big news for the third quarter, but take a look at this bar
chart.
The green is the results for FY2019. As you can see, last year, the business had no sales in the third quarter.
Sales for this fiscal year was as expected, as shown in purple.

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In the fourth quarter, there will also be large shipments and royalties revenue.

Next, I would like to explain the earnings trends of the Agrochemicals on page 26.
First, let’s look at the YoY comparison of the third quarter result. Sales of Fluralaner increased, because that
there were no shipments in 3Q FY2019. As a result of the campaign, MAXLOAD of ROUNDUP increased aheadof the schedule of the fourth quarter.
Sales were strong for products of PERMIT for paddy rice in North America. Also, TARGA and QUINTEC saw anincrease.
As I mentioned earlier, GRACIA experienced a decrease. ALTAIR decreased due to there is still distribution
stock of ALTAIR for domestic.
The export of LEIMAY decreased, due to the delay in shipping.
Sales increased by JPY0.8 billion and operating profit increased by JPY0.5 billion.
The products that were above the forecast were ROUNDUP and PERMIT. PERMIT is due to the earlier shipment.
Sales of Fluralaner were as expected. Sales of GRACIA were far below the plan.
LEIMAY was below the plan affected by the delay in ship allocation. QUINTEC was also below the plan due todelays in ship allocation. ALTAIR and TARGA were below the plan. Fixed costs were JPY0.2 billion lower thanthe plan. Although reduction of inventory adjustment cost had a positive impact of JPY0.3 billion, ultimately,
sales were JPY1.9 billion lower and operating profit were JPY0.6 billion lower than the plan.

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Next is the cumulative total of the 1Q to 3Q on the right side. Sales increased in GRACIA (export), QUINTEC,
and ROUNDUP. Sales of MAXLOAD of ROUNDUP decreased in the first half of the year, but increased due tothe shift to high value-added products in ROUNDUP AL.
Sales of ALTAIR (domestic) and PERMIT increased, but sales of Fluralaner decreased. Sales decreased because
the shipment decrease as expected. Sales of GRACIA decreased for the same reason as before. Sales of LEIMAY
and TARGA decreased.
Fixed costs increased by JPY0.5 billion due to the amortization of QUINTEC. As a result, sales decreased by
JPY1.4 billion and operating profit decreased by JPY1.1 billion.

Next, the overview of the Pharmaceuticals segment is on page 27.

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Next, page 28 shows the earnings trend of the Pharmaceuticals segment. As you can see in the lower left,
sales of LIVALO declined 31% in 1-3Q. Sales of Custom Chemicals increased 20%. In total, sales decreased 11%.
The figure for LIVALO was above expectations for the third quarter and below for Custom Chemicals.
I would like to briefly mention the changes in sales and operating profit.
Sales and profit for the Drug Discovery decreased in the third quarter. Custom Chemicals increased sales andprofit. Compared to the plan, Drug Discovery sales were above and profit was below. Custom Chemicals was
below in sales and profit.
As for Custom Chemicals, some generic APIs saw a decline because shipments are delayed due to customer
demand.
Next is the cumulative total of 1-3Q, on the right side. Sales and profit of drug discovery decreased, and salesof Custom Chemicals increased, resulting in a slight increase in profit.

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Next, on page 29, about ESG initiatives.
I would like to talk about the movement from the second quarter. In December, we entered the A list for CDP
water security, and in January of this year we set a long-term target for greenhouse gas emissions.
The original target was a 20% reduction from FY2011 by FY2021 in the medium-term management plan, but
it has already been reduced by 27% in FY2019. We have achieved it ahead of schedule. This time, we set new
targets for FY2030.

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Page 30 is for reference only, and there are no changes.

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After that, pages 31 to 38 summarize the features of our Company.

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Pages 39 and 40 show long-term business performance trends.

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Page 41 and 42 show the movement of sales and profit by quarter after FY2017.

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Page 44 lists the intended use of the products. This is the end of the explanation.

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Question & Answer<Questioner 1>
Q: I would like to ask you about the movement of profit and loss of the Performance Materials.
You mentioned that sales for semiconductors will be higher than the plan in January to March. Could you tell
us about the current status of orders received for semiconductor materials?
A: Operating profit in the third quarter increased by JPY1.6 billion, but most of it is attributable tosemiconductors, and as you have just pointed out, the profit increase for inorganic materials is very small. The
profit decrease in displays was also very small.
As for the outlook for the fourth quarter, we expect it to remain strong as in the third quarter. We expect anincreasing demand for both logic and memory.
Q: Isn't it wrong that semiconductors seem to be making more profit than sales?
A: Sales and profit are almost the same.
Q: Does it mean that fixed costs have decreased slightly and the mix has improved considerably?
A: That's right.
Q: I understand. The second is Agrochemicals. I feel it is a little weak. You mentioned about problems withthe unseasonable weather for GRACIA, and the ship problem. Apart from that, isn't the environment
particularly deteriorating? Could you tell us about agrochemicals, including the environment?
A: The influence of COVID-19 was not so much in Japan and overseas at the beginning, but the influence ofabsence of face-to-face sales activities have been gradually appearing. In Japan, the food service industry iscurrently in a severe situation, and there is a slight surplus of rice. It is now rumored that the area plantedwith rice will decrease. In this situation, we are working on how to develop a sales strategy. On the other hand,
we have acquired DITHANE, which is expected to generate 2.5 to 3.0 billion yen in annual sales, and this will
have an effect on the upside of sales that was not factored into the plan.
Q: Is the problem of ship allocation the lack of containers?
A: There is a shortage of containers, and production has delayed slightly, and there were also shortage ofcontainers. We are currently working to get it back.
Q: Is it a little difficult to resolve within the fiscal year?
A: We are now making a plan in order to recover it.

<Questioner 2>
Q: Firstly, I would like to ask you about the Performance Materials.

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Compared to the situation in the first half of the year, the YoY growth of semiconductors in the Performance
Materials in KrF, ArF, and others has increased considerably. I would like to know if the situation is different
in the second and third quarters.
Regarding other new materials, sales growth has slowed down a little. Please tell us a little more about thesituation of the third quarter together with the trend of EUV.
A: From the second to the third quarter, in KrF, ArF, the production volume of the customers themselves isincreasing, so it is increasing with the increase in capacity.
The other new materials look negative due to accounting processing. The research expenses was recognizedin the second quarter at once and sales were also recorded at the same time, which resulted in a large sales.
EUV has grown as the production volume of advanced logic increases.
Q: I understand. You said, with regard to the fourth quarter, the situation similar to that of the third quarter
will continue. Is it okay to imagine that the result will be almost flat? Or will it further grow? The story is about
the semiconductor as a whole.
A: I'm looking almost flat from the third quarter to the fourth quarter.
Q: I understand. The second point is about the Agrochemicals. How much do you expect for DITHANE in the
fourth quarter?
A: We expect about a quarter of annual sales in the four quarter.
Q: I understand. I'm sorry for one more point. ALTAIR isn't making much progress compared with the outlook
for the year. Could you please comment a little more here?
A: In the cumulative total of three quarters, sales of ALTAIR 2nd generation “TENKU” is increasing. Switchingfrom 1st generation products and other competitors is going well. It's about how much we can do in the fourth
quarter.

<Questioner 3>
Q: The first question is about SUNEVER.
Sales continued to be strong in the third quarter. Please tell us about the penetration rate of Photo IPS otherthan for smartphones.
A: The penetration rate is increasing overall.
Q: I understand. What is your view on SUNEVER toward the 4Q?
A: Regarding 4Q, we basically expect that we will continue to perform well as in the 3Q. Especially, we thinkthat the penetration rate of Photo IPS is expected to increase further.
Q: There are also Chinese New Year holidays, but do you think that QoQ will not drop much and will be almost
flat?
A: That's right. As the utilization rate of each customer is very good, there are many manufacturers that
produce even during the Chinese New Year, so there is no influence of that.

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Q: It seems that medium-sized panels will continue to perform well.
A: That's right. As I said earlier, there was some front-loaded schedule in the 3Q, so there will be some impact.
If we think about the 3Q and 4Q together, the operation will remain strong.
Q: On a QoQ basis, the amount of sales brought forward may drop a little over 4Q.
A: That's right.
Q: I understand. The second question is about the Agrochemicals again.
It seems that the portfolio of fungicides has been expanded these days. Originally, you have had strength in
herbicides, so is the acquisition of fungicides taking place following last year in order to expand your portfolio?
Or is it just that it happened to be a fungicide this time as well? Please tell us about the concept of expanding
the portfolio.
Will you continue to aggressively acquire these major businesses in the future? Please tell us about your future
thinking.
A: As you know, we have a strength in herbicide. And as for insecticides, there were miticides, but nothingelse. Then, we launched GRACIA which was developed in-house. The rest was fungicide. We happened receive
a good story, so we bought it.
If there is such an opportunity in the future, we would like to actively consider it.

<Questioner 4>
Q: The first is about DITHANE, which was announced this time. Can you tell me how this acquisition cameabout? Did you happen to have a chance to buy such a product this time?
A: We acquired it through a bid.
As the world's major agrochemical manufacturers are reorganizing, they are reviewing their portfolios andselling off inferior products intermittently. We have bought two, one a year, but actually bids are held quite
often, and in many cases we lost, and in some cases we don't participate. In some cases, they do notparticipate, and in other cases, we are offered a basket of multiple agents instead of one agent at a time.
We believe that there will be more opportunities as major agrochemical manufacturers will continue to sell
their products due to changes in their strategies.

<Questioner 5>
Q: One question about the Performance Materials. The semiconductor materials are growing. Are there any
regional characteristics?
A: Not especially in a country, but the entire business is growing.
Q: Will EUV materials accelerate further toward 4Q?
A: There were some shipments ahead of schedule in 3Q, so I'm looking at it almost flat.

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Q: Thank you. As for Agrochemicals, I couldn't hear the explanation about Fluralaner. Can I ask you theexplanation again?
A: First of all, the shipment of Fluralaner was zero in the third quarter of FY2019. There were shipments in thethird quarter of FY2020, so it has increased compared to the previous year. However, the shipment value was
as planned.
As shown by the bar graph on page 25, the shipping value was originally small in third quarter. For fourth
quarter, we are planning a volume like the one we have here. So there is no change in the scenario.
Q: Could you please comment again on royalties?
A: We will receive royalties in February, the fourth quarter. The amount corresponding to the July-December
sales at BRAVECTO will be received. It will be affected by the exchange rate, but we haven't received it now,
so we don't know how much it will be.
Q: Understood. Then, as it is said in the streets, the number of pets is increasing due to the stay-home demand,and it seems that dog food is selling quite well. Does that mean that there will be no positive impact on theroyalties?
A: The current situation is that the number of pets is increasing worldwide, and I think there is probably an
increase in demand due to the stay-home demand. I think that is the current situation, but it is difficult topredict the future.
Q: Is it okay to understand that it doesn't seem that royalties in February will significantly increase?
A: As Merck's financial results have already announced, so if you look at the financial results, you'll understand.

<Questioner 6>
Q: First, the semiconductor material, ARC. About the growth rate of sales in the last few quarters. For example,
compared to the growth rate of photoresist used in the same lithography process, I think the growth rate isconsiderably higher. What is the background to this?
A: It's a little difficult to answer about the growth of resist makers, but one point is that other material
manufacturers sell globally, while we mainly sell in Asia, so I think there is a difference in sales regions. In
addition, our growth is due to the fact that the market share is growing well at the stage when devices are
moving to the forefront.
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