Nissan Chemical Corporation
3Q FY2023 Financial Results Briefing
Presenter:
DAIMON Hideki Director, Senior Managing Executive Officer & CFO
February 9, 2024

Daimon: This is Daimon from Nissan Chemical. Thank you for taking your time today. Let’s get straight into
the presentation.

As mentioned on page four of the materials, starting with the summary for 3Q, compared to the same period
last year, we saw a decrease in sales of JPY0.1 billion, a decrease in operating income of JPY1.3 billion,
representing a 12% decline, and a decrease in net income of JPY0.6 billion.
For the cumulative total of the first three quarters, over nine months, compared to the same period last year,
sales decreased by JPY3.9 billion, operating income by JPY5.4 billion, a 14% decline, and net income decreasedby JPY4.8 billion.
Regarding the forecast comparison for 3Q, which compares with the figures we announced in November 2023,
sales exceeded forecasts by JPY1.6 billion, operating income by JPY1.4 billion, and net income by JPY0.3 billion.
Concerning shareholder returns, mentioned below, the interim dividend has been maintained at JPY70,
already implemented. As for the share repurchase, we completed the acquisition of JPY5 billion worth ofshares on February 8 2024, as announced in the press release, following the announcement on December 15
2023.
Combined with the repurchases made in 1H, this totals JPY10 billion, or 1.665 million shares up to the current
point. Based on this figure, the total return ratio is expected to be 85%.

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Lastly, regarding the full-year performance forecast, there has been no change from the forecast announced
in November 2023, and we are maintaining our forecasts. For this fiscal year, we are not changing our forecastof consolidated operating income of JPY48.6 billion.
Although 3Q results exceeded the outlook, considering the current outlook for 4Q, we are maintaining ourfull-year forecast. Especially for 4Q, there is a possibility of some downward revision in chemicals and display
materials.
In particular, for Chemicals, the Toyama plant, which had been halted since January 5 due to the Noto
Peninsula earthquake, resumed ammonia production this week on February 7. While the impact is minor
overall, it was not factored into our forecast and so that it can be a downside factor for 4Q.
Additionally, for Display Materials, as I will explain later, there were some shipments moved forward from 4Q
to 3Q. Also, there are adjustments in operations at panel manufacturers for devices such as TVs, so with these
considerations in mind, we are maintaining our full-year forecast.

2The specific figures are on page five. The far-left column shows the performance for 1H of last fiscal year, 3Q,
and the cumulative total for 1Q-3Q, the middle column presents this fiscal year’s performance, and the far
right compares it to the same period of the previous year.
In terms of 3Q FY2023, we recorded JPY49.6 billion in sales and JPY9.3 billion in operating income. As I will
mention later, non-operating losses, particularly foreign exchange losses, resulted in a decrease of JPY0.8
billion, leading to an ordinary income of JPY8.8 billion and a net income of JPY6.5 billion.
The exchange rate for 3Q was JPY148, which is about JPY7 weaker than in the same quarter of the previous
year. On the other hand, for crude oil, the JCC was at USD91 per barrel for this 3Q. However, natural gas prices
have fallen more significantly compared to last year, meaning there has been a positive effect from lower fueland raw material costs.

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Moving on to page six, this shows the comparison with the forecast announced in November 2023. As I
mentioned earlier, the operating income has exceeded the forecast by JPY1.4 billion, as shown on the rightcolumn.
The exchange rate forecast announced in November 2023 was JPY142, but the actual exchange rate in 3Q has
been JPY148 as mentioned earlier. You can see the JCC price of crude oil here. The actual natural gas prices
have fallen below the November forecast. While crude oil prices have slightly exceeded it, natural gas prices
have seen a decrease.

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Next, let’s discuss the operating income by segment, which is detailed on page seven as usual. The top section,highlighted in bold, indicates that the total operating income for 3Q decreased by JPY1.3 billion YoY, while
compared to the performance outlook, it increased by JPY1.4 billion.
Starting with Chemicals, the performance was flat compared to the same period last year. The decrease insales of melamine and TEPIC was offset by lower raw material costs, making the profit flat. The performance
was also nearly as expected compared to the forecast. The environmental related products saw a decrease,but the profit was as expected due to lower raw material costs.
For Performance Materials, there was a decrease of JPY0.6 billion compared to the same period last year.
Although sales in Display Materials and Semis Materials increased, the total fixed costs for Performance
Materials increased by about JPY0.6 billion, resulting in an overall decrease in profit.
However, compared to the forecast, there was an increase of JPY0.5 billion in profit. This increase was due tothe Semis Materials exceeding expectations and a decrease in fixed costs by about JPY0.2 billion, contributing
to an overall profit increase.
Next, for Agrochemicals, there was a decrease of JPY0.2 billion compared to the same period last year.
Fluralaner sales increased, but sales of ROUNDUP decreased, and fixed costs increased by about JPY0.4 billion.
Compared to the forecast, the results were as expected. Sales of GRACIA and ROUNDUP were lower in 3Q,
but a JPY0.3 billion decrease in fixed costs contributed to an increase in profit, aligning the profit with theforecast.

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Lastly, for Healthcare, there was a decrease of JPY0.1 billion compared to the same period last year. However,compared to the forecast, there was an increase of JPY0.2 billion, particularly due to the performance ofcustom chemicals.
I will not go into the individual details for 1Q-3Q, but you can review them later. It still remains that Semis
Materials account for a significant portion of the YoY decrease in profit.

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Moving on to page eight, we have the breakdown of non-operating income and expenses, and extraordinary
income and losses. In the middle section marked in blue for 3Q, what stands out is the foreign exchange lossof minus JPY0.8 billion, as I mentioned earlier. This loss was due to the exchange rate movement from
JPY149.58 at the end of last September to JPY141.82 at the end of December, approximately a JPY8 increasein the value of the yen, resulting in this JPY0.8 billion loss.
Compared to the same period last year, this figure is a plus JPY1.31 billion improvement, as seen in the second
column from the right. From 2Q to 3Q last year, the yen had strengthened further. However, this was notfactored into the forecast for this term, contributing to a negative deviation. As for extraordinary income andlosses, there was no record for 3Q FY2023.

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Next, on page nine, we have the cash flow statement. The free cash flow for the first three quarters of FY2023
is JPY21.8 billion, as seen in the middle. This is a decrease of about JPY2.5 billion compared to last year, but
we continue to generate a strong free cash flow of over JPY20 billion.
As for the cash flow from financing activities, shareholder returns have increased by about JPY8 billion
compared to last year. Consequently, there has been an increase in borrowings of JPY19.4 billion. Last year
we were repaying debt, but this year we have taken on additional borrowing. The final line shows that thebalance of cash and deposits is almost the same as last year, with a balance of over JPY20 billion.

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On page 10, we have the balance sheet. Looking at the assets side on the left, compared to the end of theprevious fiscal year in March 2023, total assets have increased by about JPY11 billion. This increase is almost
entirely due to fixed assets.
Regarding current assets, inventory has increased by about JPY20 billion, which is significant. Typically,
especially for Agrochemicals, inventory gradually increases from the end of March to the end of September
and then to the end of December. On the other hand, accounts receivable has decreased by JPY18.5 billion,
indicating that the collection of receivables is progressing as usual.
On the liabilities side, as mentioned earlier, borrowings have slightly increased to JPY36.7 billion, an increaseof JPY9.4 billion compared to the end of March.
As a result, as stated at the bottom, the equity ratio is 70.4%, indicating a continued healthy financial structure.
Regarding the D/E ratio, which is based on net debt, borrowings minus cash, as of the end of December, it
was a positive 5.4%.
In the bottom left corner, for reference, we have the trend in investment securities. As shown in the bottomrow, the ratio of strategic shareholdings to net assets was 8.3% at the end of December. There has been no
significant increase or decrease in the number of holdings, maintaining within 10%.
For reference, the numbers as of the end of March 2018 are shown in the far-right column, from which it canbe seen that the ratio has been reduced by about half since then, indicating a steady decrease.

9Moving on to the segment overview.
On page 12, we have the segment-specific figures, which I encourage you to review later. These figures arecompared to the same period last year.

10Page 13 is about the comparison with the forecast. Specifically, if you look at the far-right column for 3Q under
the forecast comparison, you will see that the operating income for Performance Materials exceeded
forecasts by about JPY0.5 billion. Additionally, Healthcare exceeded by JPY0.2 billion, and there was an
upward deviation of about JPY0.7 billion in trading, others, adjustment. For more detailed breakdowns ofthese figures, please refer to page 46 later on.

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First, for the Chemicals segment on page 14, this remains unchanged including graphs from the explanation
announced in November 2023.

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Next, on page 15, this shows the sales growth rate of major products.
As the table and the introductory text indicate, Fine Chemicals in 3Q experienced a 7% YoY decrease, withTEPIC continuing to perform weakly. Over the first three quarters, there was an 18% decrease in sales, withenvironmental related products and others performing below the forecast.
For Basic Chemicals, there was a 3% decrease in 3Q YoY. The cumulative total for the first three quarters
shows a 2% decrease in sales. However, excluding the impact of melamine, sales increased by 11%, asindicated in parentheses below. The performance compared to the forecast showed a slight downward
deviation.

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Page 16 includes specific profit figures. As indicated in the table, compared to the same period last year, Fine
Chemicals experienced a decrease in both sales and profits for 3Q and the cumulative first three quarters.
For Basic Chemicals, although there was a decrease in sales, profits increased, attributed to lower raw material
costs, particularly benefiting this sub segment. As a result, for 3Q, there was a JPY0.5 billion decrease in sales,
but operating income remained flat in Chemicals.

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On page 17, which compares against the forecast, sales were JPY0.9 billion lower than expected. However,
due to the impact of lower raw material costs among other factors, operating income was as forecasted.

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Next is Performance Materials. On page 20, this is the segment overview.

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On page 21, the table shows the sales growth rate of major products. For Display Materials, 3Q saw a 7% YoY
increase, with a 13% increase for the cumulative first three quarters, almost in line with the forecast.
Semis Materials in 3Q increased by 4% YoY, but experienced a 12% decrease over the first three quarters. The
3Q performance exceeded forecasts. Inorganic Materials in 3Q decreased by 5% YoY and by 6% over the first
three quarters, closely aligning with the forecast.

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Page 22 provides a detailed breakdown. For Performance Materials compared to the same period last year,
3Q saw an increase of JPY0.8 billion in sales, but a decrease of JPY0.6 billion in operating income, with a noted
JPY0.6 billion increase in fixed costs contributing to this reversal.
For Display Materials, as shown on the bottom left, 3Q resulted in increased sales but decreased profit, witha very small decrease in profit. Specifically, photo IPS experienced some shipments advanced from 4Q to 3Q
in FY2023. Sales for rubbing IPS also decreased in 3Q.
For Semis Materials, 3Q saw increased sales but decreased profit, largely due to an increase in fixed costs.
However, EUV materials, particularly under layer, continued to perform well, with a 29% YoY increase in 3Q.

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Next, on page 23, we discuss the comparison with the forecast for Performance Materials. Overall, sales
exceeded the forecast by JPY0.2 billion, and operating income exceeded by JPY0.5 billion. Additionally, fixed
costs were JPY0.2 billion below expectations, contributing to the increase in profit.
Photo IPS experienced an upward revision due to some shipments being brought forward from 4Q, as notedin the bottom left.
Meanwhile, EUV materials, as mentioned on the right, also exceeded expectations, continuing to securestrong orders in cutting-edge areas.

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Next is Agrochemicals. On page 24, this is the segment overview.

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On page 25, we discuss the sales growth rate of key products. The total segment experienced a 1% YoY
increase in 3Q and a 1% decrease for the cumulative first three quarters.
The performance compared to the forecast showed a downward deviation. There were mixed results, withdecreases in products like ROUNDUP and GRACIA in 3Q.
On the other hand, Fluralaner saw a 10% YoY increase in 3Q and a 6% increase for the cumulative first threequarters, exceeding the forecast.

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Page 26 provides a YoY explanation for each key product. Overall, for the segment, 3Q saw a JPY0.1 billion
increase in sales but a JPY0.2 billion decrease in operating income, with a JPY0.4 billion increase in fixed costs.
ROUNDUP experienced a decrease in 3Q sales due to rush demand before price hikes in FY2022, resulting ina decrease compared to that period.
LEIMAY saw decreases in both 3Q and the cumulative first three quarters, with a reduction in quantities toEurope due to distribution inventory adjustment.
GRACIA experienced an increase in domestic sales, but exports, particularly to India in 3Q, saw reductions due
to unfavorable weather conditions.
Lastly, Fluralaner, as mentioned earlier, saw an increase in sales.

22Page 27 compares the results to the forecast. Overall, sales were JPY0.7 billion below expectations, but due
to factors such as a decrease in fixed costs, operating income met forecasts.
The page details the status of key products, as briefly mentioned earlier.

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Next is Healthcare. On page 33, this is the segment overview.

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On page 34, we discuss sales forecasts for key products. LIVALO, compared to the announcement in November
2023, remains unchanged, with a 13% YoY decrease, particularly noting a double-digit decrease domestically.
While the actual performance may not dip this deep, the forecast remains unchanged under theseassumptions.
Additionally, as noted in footnote 3, generic drug makers entered the US market in November last year, which
was already anticipated.

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Page 35 provides a YoY comparison, indicating a decrease in both sales and operating income for 3Q.
Specifically, regarding Custom Chemicals, some shipments have been delayed to FY2024, as described on theright, contributing to the decrease in sales and profit.

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Page 36 compares results to the forecast, indicating an upward revision for Custom Chemicals. Overall, bothsales and operating income exceeded forecasts for the segment.
That concludes my presentation.

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Question & Answer<Questioner 1>
Q: First, on page four of the introductory section, it is mentioned that there is a downside risk for 4Q in
Chemicals and Display Materials. I would like to confirm whether this implies that the Company as a whole
might also see a downturn for the FY2023 full year or the forecast for the full year remains unchanged eventhough 3Q was better than expected.
A: Regarding 4Q, as mentioned, we currently see a potential downside in Chemicals and Display Materials. It
is still early February, and we have not fully analyzed the January performance yet, but that is the impression
we have, which is why we noted it.
Especially since the operating income in 3Q exceeded expectations by JPY1.4 billion, we included this point
anticipating questions on why we have not changed our full year forecast. As for other segments, we do notforesee significant fluctuations at this moment. Since it is still in the midst of the fiscal year, all we can explain
to you is that this is our current understanding.
Q: So, this is specific to 4Q and does not affect the full-year forecast?
A: That is correct.
Q: Understood. Next, I think the inventory at the end of December was quite high. Are there any significant
adjustments needed going forward?
A: As I explained earlier on page 10, compared to the end of the previous term, our inventory has indeed
increased by about JPY20 billion. Even compared to December 2022, it is up by about JPY15 billion, and we
recognize that the inventory holding days have significantly increased.
This is particularly due to an increase in Agrochemicals, which typically start to ship more from December
towards March, leading to a reduction in inventory. We are closely examining this trend with the businessdivision and will continue to monitor its progress.
Q: So, the increase in inventory did not contribute to the profit exceeding expectations in 3Q, correct?
A: Regarding the inventory, the inventory adjustment cost actually had a negative impact on 3Q. Comparedto the forecast, it meant that shipments were high, which were reflected on the cost side.
Q: Understood. Finally, regarding Performance Materials, could you give us a qualitative explanation of QoQ
movements from 2Q to 3Q and from 3Q to 4Q for Display Materials and Semis Materials?
A: First, regarding Display Material, the market has been in a gradual recovery phase until 3Q. However, 3Q
results were a little stronger than actual performance due to the impact of some accelerated shipments inphoto IPS, so we assume that there will be a reactionary decline in 4Q.
Also, since TVs and other devices are currently undergoing production adjustments, we expect that sales of
rubbing IPS and VA modes will be a little lower than the forecast announced in November.
On the other hand, Semis Materials are gradually entering a recovery phase. From 2Q to 3Q and 3Q to 4Q, we
are seeing single to double-digit percentage increases in sales respectively. Especially, EUV materials are
performing quite robustly, and we expect this trend will be continued into 4Q.

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<Questioner 2>
Q: I would like to ask about the impact of the Noto Peninsula earthquake on Chemicals. The ammonia plantat the Toyama factory was shut down for almost one month. Ammonia is an upstream part of the
manufacturing flow, so I believe it has affected various derivative products. Would it be correct to say thatthe impact including these derivative products is minor?
A: Regarding the impact of the earthquake, we currently expect a certain level of impact on sales andoperating profits due to some repair costs and others. We have been requested for a quick production
recovery by our customers who purchased products from other vendors in remote areas, and we are working
hard to minimize the impact.
Q: Understood. So, are these shutdown costs not considered as extraordinary losses?
A: I do not think this will be the case. It will be included in sales through operating income.
Q: Regarding the restart of ammonia production on February 7, has not it normalized yet?
A: It has normalized at the moment, and we have also started production of the downstream derivative
products. In terms of 4Q forecast, in addition to the impact of the earthquakes, TEPIC and environmental
related products also continue to be affected by inexpensive Chinese products, so we will need to keep a close
eye on them.

<Questioner 3>
Q: My first question is about Agrochemicals. On page 27, there is a list for upside and downside in the main
products. Could you share your view on the market environment in 3Q for both domestic and overseas?
A: As for both domestic and overseas business environment, sales in 3Q as well as 2Q did not grow in the
expected areas and products due to the weather factors.
In the domestic market, 3Q is usually a period of relatively low shipments, but I think it can be said that sales
were considerably down compared to the previous year.
Q: Additionally, in 3Q, shipments of ROUNDUP and GRACIA were delayed while TARGA shipments were moved
up. Netting these factors out, overall, could you clarify whether these shipment timings had a negative or
positive effect on 3Q?
A: On a net basis, we believe the shipment delays were bigger and worked in a negative direction.
Q: Understood. Could you tell us how you see the market environment in 4Q?
A: Starting with the domestic business environment, 4Q is the peak season for domestic agrochemical sales.
Shipments in January have been progressing smoothly, as for 4Q, we expect domestic sales to proceed asplanned.
Internationally for example, we obtained a registration for GRACIA in Vietnam in December, and shipments
started in January. Therefore, we also anticipate that international sales in 4Q will proceed as planned.
Q: Regarding the demand environment abroad, there was mentioned that in 2Q, weather factors in Europe
led to a downturn in demand for LEIMAY related to potatoes. However, this time you mentioned poor weather

29conditions in India affecting GRACIA. So, is it correct to understand that weather conditions in India areparticularly dragging down performance?
A: Yes, that is correct. India has been experiencing quite severe drought conditions, leading to a lower
incidence of pests, which has significantly impacted us.
Q: I see. Do you expect any improvement heading into 4Q? Is there also an excessive buildup of distribution
inventory due to the weather?
A: As far as weather conditions, there are unreadable aspects as usual. However, 4Q is not the demand period
but the time when shipments begin, so we hope to deliver as planned. We are aware that there are rather
large inventories in the distribution channel, but we believe that the overall market demand will expand, so
we expect our sales to be in line with the forecast.
Q: Understood. My second question is about the veterinary medicine Fluralaner. 3Q results were above target,and based on Merck’s earnings, there seems to be a nearly 20% increase in sales, indicating a solid
performance. Since there is no mention of these shipments being pulled forward in the presentation materials,
could you comment on whether 4Q results are also likely to be upward swing? Also, if there are any updates
on patent extensions, it would be appreciated if you also could give us some comments on this.
A: As you pointed out, the end sales at Merck have been disclosed, so there might be a slight outperformancein line with that, but since it is still early February, I cannot say anything definitive.
Regarding the patent in the US, there is no change from the precious information.

<Questioner 4>
Q: I believe the sales of Semis Materials grew from 2Q to 3Q. Could you comment on the strength of the sales
by region?
A: Rather than by geographical area, our analysis shows that the recovery in memory, especially DRAM,
contributed to the growth.
Q: Thank you. My second question is about Display Materials. For photo IPS, sales to tablets and notebooks
accounted for about 40% last year, I believe. With the shift towards OLED in high-end tablets and notebooks,
I assume that the use of LCD alignment coating materials might decrease. Could you share your view on this
impact?
Additionally, regarding the operation rates of panel manufacturers, I have heard from other material
manufacturers that their operating rates are recovering. What is your view on this?
A: First, regarding the shift to OLED from LCD in tablets, it has been said for some time that adoption in certain
tablets and others would increase from 2024, and although the percentage of OLEDs will increase somewhat,
we believe that the impact of OLED adoption will be quite limited. We believe that the conversion to photo
IPS will continue, and in this sense, we anticipate steady growth in sales.
Second, regarding the current operation condition at panel manufacturers, we are aware that some Chinese
factories producing TV panels have intentionally reduced their operations around the Spring Festival in midFebruary during 4Q. We have heard that operations are expected to resume after this period, from March
onwards, and we are planning accordingly.

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<Questioner 5>
Q: My question is about shareholder returns. It was mentioned in the documents that the total payout ratio
would be 85%, up from 78% last year, with the target of 75% in the medium-term business plan. It seems tobe quite an upward revision. Going forward, should we expect the shareholder return policy to be a total
payout ratio is consistently above 75%, or how should we view this?
A: As you mentioned, it has been gradually increasing recently, but fundamentally, the base perspective of
75% during the medium-term business plan period remains unchanged. We do not raise it above this level atthis point intentionally.
In May 2025, when we roll out the next medium-term business plan, we will disclose more, but please
understand that at this point, we have not changed the line from 75%.
Q: So, you are saying it is 75% on an annual basis, not cumulatively? In other words, is there no plan to lower
it next year after reaching 85% this year?
A: That is correct, there is no such plan.

<Questioner 6>
Q: I have two questions. Regarding Semis Materials, there was an explanation earlier that shipments for DRAM
are recovering, is this related to ARC? I have not heard much from other companies about the return of sales
for DRAM in October through December, so can you give us some more background?
A: Regarding DRAM, while the overall operation rates have not increased significantly, we have seen an uptickin the production of advanced DRAM using EUV materials. The volume of wafers being processed has
increased, which has allowed us to benefit especially in terms of EUV materials.
Q: Understood. Thank you very much. My second question is about Agrochemicals. There were several
mentions of concerning keywords like adverse weather conditions and the inventory buildup. Could you
confirm that this is not a change because of the competitive environment, such as a decline in your company's
market share due to the emergence of competing products?
A: We believe that the reason for the increase in our inventory, especially in Agrochemicals, is not that we arebeing pushed out by competing products and losing market share.
There are several reasons for the increase in inventory. One significant factor is related to GRACIA. The
inventory of GRACIA has increased compared to the previous period, and this is primarily because its
production started in December last year at NBR in India, leading to a significant increase in the inventory of
GRACIA active ingredients produced at this location and related raw materials.
Regarding LEIMAY, as explained earlier, its shipment was affected by the distribution inventory in Europe, notby competition. The cause here was weather-related, with an extremely low incidence of potato blight, rather
than due to competition.
Finally, regarding raw materials in general, we have spent a year securing raw materials which are especiallydifficult to procure aiming for the diversification of raw materials procurement. This has resulted in an
increase in inventory, but we expect a certain level of reduction by the end of March this year, and we plan
to gradually adjust the inventory in the next fiscal year.
[END]

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