Nissan Chemical Corporation
1Q FY2024 Financial Results Briefing
DAIMON Hideki Director, Senior Managing Executive Officer & CFO
August 9, 2024

Daimon: I am Daimon of Nissan Chemical Corporation. I will now begin my presentation.

Please turn to page four. As a summary, compared to the forecast announced in May, sales were above theforecast by JPY2.5 billion and operating profit was above the forecast by same JPY2.5 billion or 21%. Net
income was above the forecast by JPY2.3 billion.
Compared to the same period last year, sales increased by JPY3.8 billion, while operating profit decreased by
JPY0.6 billion. Total operating profit for four major segments increased JPY0.1 billion YoY. Net profit decreasedby JPY0.6 billion.
Concerning shareholder return, we have already announced the additional share repurchase of JPY5.0 billion
on May 28, in addition to the JPY5.0 billion announced on May 13. As a result, we announced upper limit of
JPY10.0 billion for the period from May to March next year. There is no change for that.
As for the earnings forecast, we usually do not revise the forecast in 1Q, so we have decided to leave the 1H
and full-year forecasts unchanged from the time they were announced in May.
Regarding the exchange rate assumptions made at the time of the earnings forecast in May, we have assumed
an exchange rate of JPY145 to the dollar in 1H and JPY140 in 2H. These figures remain unchanged.

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The actual figures are on the next page, page five. As you can see in the middle column, for 1Q of FY2024,
sales were JPY58.7 billion, operating profit was JPY14.4 billion, non-operating income was JPY1.6 billion withforeign exchange gains of JPY1.3 billion, ordinary income was JPY16.0 billion, net income was JPY11.6 billion,
and EBITDA was JPY18.0 billion. Operating margin was 24.6%, which is slightly more than 3 percentage points
higher than the forecast.
The exchange rate during the period was JPY156, which, as I mentioned earlier, was estimated at JPY145 in
the earnings forecast, but the dollar appreciated by about JPY11.

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The next page, page six is YoY comparisons. Please check this later.

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Continuing, page seven, as usual, is the analysis of changes in operating profit by segment. First, in theChemicals segment, the profit was above the forecast by JPY0.8 billion. However, this increase is mainly due
to a decrease in fixed costs etc., in other words, the effect of inventory adjustment cost. This was a factor that
contributed to the increase in profit, and in a sense, it was a temporary one.
On the other hand, profit decreased JPY0.2 billion YoY. Sales of TEPIC and high purity sulfuric acid increased,
while sales of urea/AdBlue decreased, partly due to the Noto Peninsula earthquake in January. In addition,
fixed costs etc. increased, mostly due to inventory adjustment cost. These factors resulted in lower profits.
In the Performance materials segment, operating profit was above the forecast by JPY1.5 billion. The large
increase above the forecast was due to sales increase in Semis materials and Inorganic materials despite sales
decrease in Display materials. Compared to the same period last year, sales of Display materials decreased,
but sales of Semis materials and Inorganics materials increased, resulting in an increase of JPY0.5 billion in
profit.
In the Agrochemicals segment, profit was slightly below the forecast. The decrease was due to sales decreasein TARGA and increase of JPY0.1 billion in fixed cost, etc., despite sales increase in GRACIA, etc. The JPY0.1
billion increase in fixed costs, etc. was actually due to a slight impact from inventory adjustment cost, although
fixed costs themselves declined. This resulted in JPY0.1 billion decrease in profit.
On the other hand, profit increased by JPY0.3 billion YoY due to increase in sales in GRACIA, Fluralaner, PERMIT,
et cetera.

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Lastly, in the Healthcare segment, profit was in line with the forecast but decreased by JPY0.5 billion YoY. Thiswas due to the decrease in sales of LIVALO and the decrease in sales of Custom Chemicals in 1Q due to thepostponement of shipments to 2Q.

The next page, page eight, shows the breakdown of non-operating income/loss and extraordinary income/loss.
Please see the third column from the left. Non-operating income/loss decreased by JPY0.45 billion YoY, which
is an increase of about JPY1.3 billion from the forecast. In addition, there is no profit/loss as stated forextraordinary income/loss.
The exchange rates at the end of March and June for dollar-yen are as shown in note one at the bottom.

5Moving on to page nine, cash flow. As stated on the top of the page, free cash flow was JPY12.5 billion, an
increase of JPY5.3 billion YoY.
Cash and deposits were about JPY34.0 billion, as shown in the bottom line. We continue to have ample cash
and deposits.
Regarding shareholder returns, both dividends and share buybacks, as shown above, are almost on par withlast year.

6Moving on to the balance sheet on page 10. As you can see on the top left, on the asset side, total assets
increased by JPY12.3 billion from the end of March. The increase in cash and inventories stands out.
On the other hand, on the liabilities side on the right, there is an increase of JPY10.4 billion in others on theliabilities. This includes a JPY10.0 billion straight bond issue in mid-June.
As you can see on the lower right, the equity ratio was 66.5%, slightly down from the previous year, but the
D/E ratio remained in the single-digit percentage range, which indicates our healthy financial condition.
In terms of the breakdown of investment securities, as you can see at the bottom, the percentage of strategic
shareholdings to net assets was 7.9% at the end of June, remaining below the 10% level.

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Next, YoY comparison of financial results by segment is on page 12.

8On page 13 of the comparison to the forecast, as I mentioned earlier, the operating profit of the Performancematerials segment is above the forecast by JPY1.5 billion or 28%. This is purely since the Semis materials andthe Inorganic materials performed well.

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Next is the Chemicals segment. Please jump to page 15. This shows the YoY comparison for 1Q. As shown at
the top of the page, sales and operating profit decreased by JPY0.2 billion respectively. As I mentioned earlier,although it is not shown here, the decrease of JPY0.2 billion in operating profit is mainly due to the impact of
the expense side in the inventory adjustment cost.
Specifically, in the Fine Chemicals shown on the lower left, both sales and operating profit increased, withsales of TEPIC for general application up 61% due to an increase in volume. In addition, sales of TEPIC forelectronic materials increased 28% YoY, which means that TEPIC is gradually on an increasing trend.
Moving on to the Basic Chemicals. As you can see on the right, both sales and operating profit decreased. In
particular, sales of urea/AdBlue declined 26%. This is due to the impact of lower shipments, resulting fromlower inventory level than usual caused by the effect of the Noto Peninsula earthquake, as I mentioned earlier.
On the other hand, sales of high purity sulfuric acid increased by 36%, which means that both volume andprice are rising.

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Moving on to page 16. This is a comparison to the forecast. Sales were below the forecast by JPY0.2 billion
and operating profit was above the forecast by JPY0.8 billion. As I mentioned earlier, the increase is due to adecrease in fixed cost & others, especially the impact of inventory adjustment cost, which accounts for the
majority of the increase in income. Specifically, production prior to the regular maintenance was slightly larger
than planned at the beginning of the year, resulting in this one-time increase in profit.
Major products in Fine Chemicals and Basic Chemicals are listed at the bottom. In Fine Chemicals, sales of
TEPIC was above the forecast, while in Basic Chemicals, sales of urea/AdBlue was below the forecast and salesof high purity sulfuric acid was above the forecast.

11Moving on to the Performance Materials Segment. Please skip to page 19. The graph on this page is basicallyfor the full year, so I have not changed it. In terms of Display Materials, it is very clear that the market isrecovering after bottoming out in FY2022, and that the shift to photo IPS is progressing well.
As for Semis Materials, there was a temporary adjustment phase in FY2023, as shown in the lower right-handcorner. However, the market recovery trend is expected to continue, so the mid- to long-term growth trend
remains unchanged. Also, there is no change in continuous growth in EUV materials.

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The specific figures are on page 20 showing sales growth of main products. As shown in the table below, as
noted at the top of the page, sales of Display Materials fell 4% YoY in 1Q and also fell short of the earnings
forecast. However, QoQ shows an increase in sales.
As I will explain later, photo IPS for smartphones temporarily came out a little lower than our forecast.
On the other hand, Semis Materials increased 33% YoY in 1Q, and as you can see in the figures at the bottom,
ARC, multi layer process materials, and EUV materials showed considerable growth, showing an increase insales both to forecast and QoQ.
Sales of Inorganic Materials were also solid, with a 12% YoY increase and an increase compared to the forecast.

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Next, page 21 shows YoY results. Sales of the segment as a whole increased JPY2.7 billion and operating profit
increased JPY0.5 billion.
It says the increase in fixed cost & others is JPY1.2 billion. As I mentioned already, depreciation andamortization of Semis Materials, in particular, increased due to the construction of the second plant in Korea,
which accounted for almost all of the JPY1.2 billion.
As for Display Materials at the bottom left, as I mentioned earlier, photo IPS sales declined slightly due to adrop in smartphone sales, but sales for monitors and automobile showed a double-digit percentage increase.
In addition, sales of rubbing IPS were down and sales of VA were flat.
On the other hand, sales and operating profit in Semis Materials increased, which means that the market isrecovering, especially in the advanced generation. Also, sales and operating profit in Inorganic Materials
increased due to strong sales of SNOWTEX for general applications and polishing.

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Page 22 shows the result in Performance Materials Segment compared to the forecast. As mentioned at the
top of the page, sales exceeded the forecast by JPY1.4 billion and operating profit exceeded forecast by JPY1.5
billion, while fixed cost & others fell short of the forecast by JPY0.5 billion, which was the contributing factor
to an increase in profit. Of these, both fixed costs and inventory adjustment cost contributed slightly to anincrease in profit.
Specifically, as you can see on the lower left, sales of Display Materials fell short of the forecast, especially forsmartphones and monitors, which we had expected to be strong, but in 1Q sales fell slightly short of theforecast. On the other hand, rubbing IPS outperformed the forecast by double digits. VA was in line with theforecast.
As a result, sales and operating profit in the Display Materials were below the forecast, while sales andoperating profit in the Semis Materials were above the forecast significantly. Similarly, sales and operating
profit of Inorganic Materials were above the forecast.

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Next, Agrochemicals. Please jump to page 24. As mentioned at the top of the page, 1Q sales increased by 8%
YoY. It also exceeded the forecast.
On YoY basis, the sales of ALTAIR, GRACIA, PERMIT, and LEIMAY increased, while TARGA decreased.
In addition, sales of the animal health product Fluralaner were in line with the forecast, with an 11% increase
YoY.

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Specifically, the next page, page 25, shows YoY comparisons. Sales increased JPY1.6 billion and operating
profit increased JPY0.3 billion. There was an increase in fixed cost & others of JPY0.8 billion, almost all of which
was a net increase in fixed costs. As I may have mentioned before, fixed costs increased due to an increase invarious advertising expenses and fixed cost of NC Agro Hakodate, which was newly included in the scope of
consolidation, as well as a slight increase in depreciation at the NBR plant in India compared to a year ago.
In addition, with the launch of the former NC-653 VERDAD this year, there has been a slight increase indepreciation costs for capital investment in domestic plants for this product.
In terms of major products, as shown below, sales of ALTAIR and GRACIA, as I mentioned earlier, increased
due to sales expansion in Asia. On the other hand, TARGA's sales decreased due to the shipment shift to
FY2023 and the impact of distribution inventories in Europe.
In addition, sales of PERMIT and LEIMAY increased due to increased demand, as noted here. As for Fluralaner,
shipments of API were on a par with the previous year, but royalty income increased due in part to the impactof the depreciation of the yen.

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Page 26 shows the comparison to the forecast. Sales exceeded the forecast by JPY0.5 billion, and operating
profit fell short of the forecast by JPY0.1 billion which is a slight decline. Fixed cost & others was above theforecast by JPY0.1 billion, resulting in lower profit.
Regarding fixed cost & others, fixed costs themselves were below the forecast, but due to inventory
adjustment cost is above the forecast by JPY0.1 billion in net, which caused the decline in profit.
For each of the major products, there is little change from what I said earlier in YoY. Please check this later.
Pages 27 through 31 are almost unchanged from the May announcement, so I will omit them. Please checkthis later.

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Finally, the Healthcare Segment on page 34. Compared to the same period of the previous year, both sales
and operating profit decreased by slightly less than JPY0.5 billion. Sales of LIVALO declined, both in Japan andexports. Sales of Custom Chemicals were affected by the postponement of shipments to 2Q. In addition,
income decreased due to a slight increase in fixed cost & others.

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On the other hand, as shown on page 35, operating profit was in line with the forecast. The breakdown was
as noted for Healthcare and Custom Chemicals, respectively, below.

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Finally, the ESG topic. Please skip to page 40. Let me explain just GHG emissions. As you can see in the graphbelow, the actual amount of GHG emissions in FY2023 was 285 thousand tons, a decrease compared to theprevious year.
The target for FY2027 is a 30% reduction compared to FY2018, so we are working toward this goal and are
currently implementing the initiatives shown in the lower right-hand corner of this page.
I am sorry I took so long, but that’s all I have to say.

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Question & Answer<Questioner 1>
Q: I have the impression that SUNEVER's 1Q results are quite weak compared to the market environment. You
mentioned earlier that this is temporary. Could you tell us about the background to this situation, your viewof 2Q and beyond, and your view of the movement of Semis Materials in 2Q and beyond?
A: As for SUNEVER, there was a slight slump in photo IPS for smartphones and monitors in 1Q, but we
recognize that this is temporary, taking into account the current situation in which the numbers are expected
to return in 2Q and thereafter. The reason for the poor performance in 1Q is that there was a shift to OLEDs
for some smartphones, but we also suspect that there were inventory adjustments by panel makers and in
the distribution of panels.
As for monitors, there have been some production adjustments for high-end monitors that use photoalignment materials, but we have received information from customers that this adjustment will not be
prolonged, so we are not particularly concerned about performance in 2Q and beyond.
In Semis Materials, in 1Q, both logic and memory for cutting-edge applications recovered, especially in the AI
market. We expect this trend to continue to 2Q and beyond.
Q: Thank you very much. Second, could you explain the current business environment for Agrochemicals inJapan and overseas?
A: First, domestically, the situation in the industry is positive or negative by region, but we are doing welloverall compared to the previous year.
Overseas, the market as a whole is probably showing a slight increase, but we are also seeing generally
favorable results in all regions, although there are some positive and negative factors, depending on the
product.

<Questioner 2>
Q: First, let me ask you about Chemicals. In 1Q, sales of TEPIC for general application were up 61% and thatfor electronic materials was up 28%. It is on a recovery trend overall. Will this situation continue in 2Q and
beyond?
In addition, I think you mentioned before that you would review the business model and structural reforms
for the next fiscal year. Please let me know if this will be moved forward as scheduled.
A: First, regarding the increase in sales of TEPIC for general application and electronic materials in 1Q, we feelthat the increase in volume was due in part to the fact that the excess inventory of customers in North America,
particularly in TEPIC for general application, has been slightly resolved. Although there is a sense that it hasbottomed out, the sales offensive by Chinese companies continues, and it is still too early to tell whether sales
momentum will continue at the same level into 2Q.
TEPIC for electronic materials also saw an increase in sales, but demand is still a little weak.
As for structural reforms, we are still in the process of considering some issues within the company.

22Q: Is it correct to say that you will proceed with structural reform-type things as planned?
A: Yes. That’s right.
Q: Also, in terms of the outlook for 2Q, I think the original plan was for a JPY0.1 billion deficit to continue for
1Q and 2Q. Is 2Q likely to be in the deficit of JPY0.1 billion as planned?
A: Since August has only just begun, I cannot say anything definite, but one thing is clear: the inventory impact
I mentioned earlier. An increase of JPY0.8 billion in 1Q will probably emerge as the opposite, cost side in 2Q.
So, for now, I think that we are going to try to achieve the budget for 1H as originally planned.
Q: I see. So, in 2Q, you feel that there is a possibility that the company could go into the red again.
A: Since 2Q is originally a period for regular maintenance, it is usually in the red every year. I think it will be as
same as every year.

<Questioner 3>
Q: The first question is about Semis Materials. In 1Q, sales increased by 33% YoY, which is a very strong growth.
Your original forecast was an increase of 13% YoY in sales in 1Q, so it outperformed significantly.
In addition to the growth of EUV, ARC and Multi layer process materials have been outperforming the plan.
Could you tell me the background and the reason for this outperformance? In addition, please tell me in what
region specifically has the Semis Materials grown? I think the materials for China are growing, but please tellme about it.
A: Regarding the outperformance in 1Q, as for the market situation, as I answered the earlier question, themarket for AI was the driving force and it largely affected the performance of EUV and multi layer processmaterials.
By region, growth is centered on South Korea and Taiwan mainly in cutting-edge areas, but there is an upward
trend overall, including China.
Q: Thank you very much. I hear that local Chinese manufacturers are gaining ground in other companies' semismaterials. Is it safe to assume that this is rarely the case with ARC and multi-layer process materials?
A: We have received information that our customers are evaluating local products, but so far we have beenable to maintain our market share.
Q: The rate of increase in sales in 1Q was quite high compared to other companies' semis materials, and thedegree of increase compared to your plan was also high, so it would not be quite clear if it was simply due tothe favorable market. Is there some temporary factor that caused a large increase in shipments?
Also, while you have a fairly high market share in ARC, I wonder if it was also affected by the weak performanceof legacy semiconductors, but I can't see that at all in the figures. Could you explain about it?
A: We have brought forward inventory for some products to 1Q, and I think this may have contributed to theincrease.
Q: Are there areas where things like the increase in market share are working better than expected?

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A: The market share itself has not changed that much, but we continue to maintain a high market share.
Q: I see. Thank you. The second point is about Agrochemicals. This one also exceeded the plan. On page 24,
you have listed the outperformance and underperformance against the forecast of each product, and on page26, you have given us a qualitative explanation. Could you give me more detailed explanation for each ofmajor products? I am particularly interested in GRACIA, LEIMAY, and ALTAIR.
I think the market environment, especially overseas, was not so good, but what was the reason for theoutperformance in that situation? I would also like to ask whether the shortage of container vessels has had
any particular impact on your company. Please tell me about Agrochemicals including that point.
A: First, regarding GRACIA, shipments in Japan were strong, especially for large standard products. Overseas,
shipments to India and other Asian countries are also progressing well.
As for LEIMAY, shipments were a little sluggish in Europe last year, but this year sales are increasing due toincreased demand for potatoes.
As for ALTAIR, there are some shipment shifted from FY2023, and we have been able to achieve positive
results from expanded sales this fiscal year.
Also, we do not think that the impact of the transport vessel was that great in our case.
Q: With respect to GRACIA, is there any aspect of your company increasing its market share while othercompanies are struggling, especially with container vessels?
A: It is difficult to know to what extent other companies have suffered negative impacts, so we do not thinkthat this is the reason for the growth of GRACIA. We believe GRACIA has grown due to the increase in shipping
countries and other factors.

<Questioner 4>
Q: The first point is about Fluralaner. We have heard that inventory adjustments are occurring in someveterinary drugs downstream. We would like to know what the current inventory level is for Fluralaner.
Could you also give us an update on the situation of patent extension in the US?
Also, I think that the BRAVECTO injectable solution will be rolled out sequentially, but I would like to know if
you have already begun to capture the demand for Fluralaner for the injectable solution, and if we can expect
it to boost your business performance in any way.
A: We don't know that much about Merck's inventory. We see that they do not have an excessive amount of
our API themselves at least. I don't think that our inventory of Fluralaner, the API, will ever accumulate on
their side.
I have a feeling that our shipments of APIs will continue to be strong in 2Q and beyond, but since we are stillin the middle of the term, I cannot say for sure, but that is my impression.
There is no update on the patent extension, and the US continues to be in discussions. We are not concerned
about it much. The fact that it is in the process of discussions has not been changed.

24Regarding the injectable solution, approval was granted in Europe in January of this year, and there arecountries that are expected to approve it after that, but we are still unable to give a definite answer.
Q: Thank you very much. The second point is about Display Materials. Basically, we understood that theunderperformance against your plan this time was temporary. On the other hand, I feel that the shift to OLEDs
is moving a little too quickly, and I would like to know your company's current perception on the shift to OLEDs,
and whether you feel that it is a little earlier than your assumptions. Also, I would like to know whether there
is any change in the progress of Photo IPS penetration. In addition, we received your comments on
smartphones and monitors, but could you please explain the progress of tablets, notebook PCs, andautomobiles compared to your assumption?
A: As you mentioned in your question, the shift to OLEDs in smartphones is indeed underway. It is true that
LCDs have decreased compared to last year. On the other hand, as I mentioned earlier, SUNEVER in 1Q wasexcessively weak not only because of the shift, but also because of some inventory adjustments. However, as
we expect it to recover in 2Q, I do not think it declined excessively.
In addition, in terms of the trend from 4Q to 1Q apart from smartphones, the shift to photo IPS is progressing
steadily, and the growth in automobiles was particularly noticeable. As for IT, the situation with monitors is
as I mentioned earlier, and we are seeing a good response to the recovery of notebook PCs. Also, we believethat the situation is solid with a gradual shift from rubbing to IPS for tablets.

<Questioner 5>
Q: The first point is that I would like you to sort out the impact of the exchange rate. In 1Q of this fiscal year,
the yen depreciated to JPY156, and in YoY terms, the yen depreciated tremendously, and I think the yen
depreciated considerably compared to the plan of JPY145. I am wondering if that foreign exchange effect, forexample, has contributed to the increase in profit. I think your company has a certain level of sensitivity, but
I would appreciate it if you could sort that out.
A: As a rough estimate of the assumption at the beginning of this fiscal year, if the dollar moves JPY1 per dollar,
it would contribute about JPY0.3 billion to annual operating profit. The strong dollar is favorable for us.
The forecast at the beginning of the year was based on an assumed exchange rate of JPY145, and the averageexchange rate for the past three months in 1Q was JPY156, which means that we benefitted by about JPY10.
In simple calculation, we can assume roughly that the positive impact to operating profit was one fourth of
JPY3.0 billion, which is about JPY0.7 billion. Although I can't clearly grasp this on a one-to-one basis, I believethat such things are probably included.
Q: Since the yen has been appreciating in 2Q, is it correct to say that there will be a rebound between 1Q and2Q?
A: However, the outlook was originally set at JPY145, so from our point of view, the current exchange ratelevel has been achieved as originally expected. On the other hand, in other areas, such as Semis Materials,
Display Materials, and Agrochemicals, as I mentioned earlier, I think that compared to the outlook, theirperformance is not bad at all. I cannot say anything definite now, but I don't have much of an impression that
there will be a decrease due to the exchange rate.
Q: I understand. Secondly, I think you explained 3D packaging process materials (Temporary adhesivematerials) for semis materials at last year's briefing. I would like to know the situation of the materials.

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HBM4 will come out, I believe, but I think the technological trend will change to the one that hybrid bonding
will be used. At that time, I wonder if your company's materials will finally start to grow, or if it is more in thesense of future expectations, since it is still a long way off.
A: Regarding 3D packaging process materials, what is now in mass production in the market is the generation
3 and 3E, the generation before HBM4. We are considering a time frame of around 2026 for the mass
production of HBM4.
Hybrid bonding is one of the candidates, but there are several generations of HBM4, and it will be a little
longer before we know whether it will be put into practical use or not.
In terms of development, we are working on improving materials such as heat resistance and developing a
new platform. We are now in the process of research and development to increase the market share of HBM4.
We have a certain share in the market of HBM3E and the volume is just now growing.
Q: Does your company's 3D packaging process materials grow significantly only after HBM4 generation
comes?
A: No, I think that the 3E generation will continue to grow and branch out, and our products are also being
used in some of them, so I think that the volume will increase in the near future.

<Questioner 6>
Q: First, the inventory balance seems to be increasing compared to three months ago and one year ago. I
would appreciate your comments on whether this is a problem.
A: As you pointed out, in the balance sheet on page 10 of presentation materials, there has been an increase
in inventories of approximately JPY11.7 billion compared to one year ago. The majority of these are
Agrochemicals.
I think this breakdown is, to some extent, unavoidable. First, for materials that are growing now, such as
GRACIA, for example, we can also expect an increase in shipments from 2Q onward. Also, the NBR plant inIndia is now in full-scale operation and is coming on stream smoothly, so inventories have increased a littlecompared to a year ago. I do not see that as a particular problem, as I am sure that the shipment will gosmoothly.
The production of the original VERDAD, or NC-653 as it was formerly called, is now underway. Now we haveobtained the registration. When there are such things, there is inevitably a bit of an increase in the inventoryahead of the schedule, so I think that is temporary.
In any case, our policy is still to gradually reduce the level of the inventory, but the number has increased dueto the circumstances I have just mentioned. That's all from me.
[END]26