Nissan Chemical Corporation
1Q FY2023 Financial Results Briefing
Presenter:
DAIMON Hideki Director, Senior Managing Executive Officer & CFO

August 10, 2023

Presentation
Daimon: I am Daimon of Nissan Chemical. Thank you all for taking time out of your busy schedules to join us
today.
Let me begin my explanation.

Please see page four of the document.
This is the financial summary of 1Q FY2023. Compared to the forecast announced in May at the beginning of
the year, sales were up JPY0.1 billion and operating profit was up JPY0.5 billion, an increase of 3%. Net income
was up JPY1.3 billion, or up 12%. Specific numbers will be explained later.
As for YoY comparisons, net sales decreased JPY3.4 billion or down 6%, operating profit decreased JPY2.3
billion or down 13%, and net income decreased JPY1.7 billion or down 12%.
In particular, 1Q FY2022, the last fiscal year, was a quarter of significant growth, and operating profit in FY2022
increased JPY5.4 billion compared to FY2021, or a 45% increase.
As for the status of shareholder return, we have already completed the repurchase of more than 800 thousand
shares of treasury stock for JPY5.0 billion as of June, as announced in the press release.

1The forecasts for 1H and the full year remain unchanged from the previous announcement made on May 15.

Next, please see page five.
In terms of specific figures, first of all, as compared to the May forecast, please look at the middle column,
this 1Q FY2023 results. Net sales were JPY54.9 billion and operating profit was JPY15.0 billion, an increase of
JPY0.5 billion from the forecast.
Non-operating income was JPY2.0 billion, an increase of JPY1.3 billion compared to the forecast. Of the above,as stated, foreign exchange gains amounted to approximately JPY1.5 billion.
Ordinary income was JPY17.0 billion, an increase of JPY1.8 billion, and since there are no extraordinary income
or losses, net income is JPY12.2 billion, an increase of JPY1.3 billion, or up 12%, over the forecast.
The second line from the bottom shows the exchange rate, which was JPY137, the average for 1Q FY2023. It
was JPY128 in the forecast.
On the other hand, the crude oil, JCC, was USD84 per barrel, which is a slight decrease in procurement cost,though there is a time lag etc for financial impact.

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The next page six, these are the 1Q results YoY, but I mentioned the numbers earlier, so please see them later.

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Continued on page seven. As usual, this is an analysis of changes in operating profit by segment. From the top,
operating profit was JPY0.5 billion higher than the forecast, and minus JPY2.3 billion YoY. The Chemicals
segment was in line with the forecast, but minus JPY0.8 billion YoY. As you can see on the right here, melamine
is no longer produced or sold in 1Q FY2023. There was also a decrease in TEPIC's revenue, as well as high raw
fuel prices.
Next, the Performance Materials segment is slightly down JPY0.1 billion from the forecast. In terms of the
breakdown, the Display Materials has been on the upside, but the Semis Materials has been on the downside.
The YoY change was minus JPY1.4 billion.
The biggest factor here is still the decline in Semis Materials. The overall market began to adjust in 2H of last
fiscal year, but 1Q of the last fiscal year was a very favorable period because the adjustment had not yet begun.
In addition, fixed costs have increased.
Next, the Agrochemicals segment, where results were in line with forecasts. As I will explain later, there wasa partial downward swing in sales of major products, but fixed costs were down, which was a factor in theincrease in profits, and as a result, profits were almost in-line.
On the other hand, operating profit decreased JPY0.2 billion YoY, with a slight decrease in sales of Fluralaner,
veterinary API, as noted here. This will also be explained later.
Finally, in the Healthcare segment, there was an increase of JPY0.1 billion from the forecast and an increaseof JPY0.3 billion YoY, both of which were contributed by an increase in sales and an upswing in Custom
Chemicals.

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Continued on page eight. This shows the breakdown of non-operating income/expenses and extraordinary
income/losses. As for numbers, please refer to the second row from the left, this blue area of the 1Q results.
Non-operating income for 1Q was JPY2.05 billion. The previous forecast is shown on the far right, which was
JPY0.69 billion, resulting in a slightly less than JPY1.4 billion increase compared to the forecast. The third linefrom the top shows the main factor, foreign exchange gains/losses. In particular, foreign exchange gains
amounted to JPY1.48 billion in 1Q. In the forecast at the beginning of the year, this figure was set to zero as
usual, so this part of the figure contributes to the upward swing.
As for the reason for the foreign exchange gains, as shown in note 1, the exchange rate was approximately
JPY145 at the end of June, compared to JPY133 level at the end of March 2023, which is a little more than
JPY11 difference. The strong USD against the yen is having an impact.
As for extraordinary income/losses, as mentioned earlier, they are zero.

5Continued on page nine, cash flows.
Cash flow from operating activities in 1Q FY2023, shown in blue, was JPY12.3 billion. The YoY comparison isshown in the right-most column, and it is almost the same level as last year.
On the other hand, cash flow from investing activities was a negative JPY5.1 billion, a slight increase, but at
about the same level.
Free cash flow was JPY7.2 billion, a slight decrease from the previous year, while cash flow from financing
activities was a negative JPY10.6 billion.
As shown below, the breakdown of shareholder returns includes dividends and share buybacks totaling morethan JPY18.0 billion. In particular, an increase of about JPY3.0 billion in dividends, as compared to the 1Q
results for FY2022 shows in the leftmost column. This is because the year-end dividend was increased from
JPY72 in 2022 to JPY94 for the June 2023 payment.
As a result, the final cash balance was JPY26.5 billion, almost the same as the same period last year.

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Next is the balance sheet. See page 10.
The upper left-hand column shows assets as of the end of the previous fiscal year, and as you can see in theright-hand column, total assets increased by JPY2.7 billion compared to the end of the previous fiscal year.
The breakdown is a negative JPY4.8 billion in current assets, but in fixed assets, especially total PPE, there wasan increase of over JPY7.0 billion.
The liabilities side on the right shows an increase of JPY6.1 billion, with borrowings in particular increasing by
about JPY10.0 billion compared to the end of March, but with a negative balance in account payables andother liabilities, resulting in a net increase of JPY6.1 billion. Net assets decreased by JPY3.4 billion.
The equity ratio, as noted below, is 71.2%, and we continue to have a very strong financial structure.
A breakdown of investment securities is included in the lower left-hand corner. As of the end of June 2023, inblue, the total is JPY27.6 billion, but the number of issues held on a non-consolidated basis remains unchanged
from the end of March at 26 stocks.
For your reference, the right-most column shows the numbers at the end of March 2018, i.e., about five years
ago. As you can see, the number of stocks has been reduced from 55 to 26, less than half.
As shown in the bottom line, as of the end of June, the cross shareholding as a percentage of net assets was
8%, below 10%.

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I will now move on to the segment overview. See page 12.
This is the YoY change in sales and operating profit by segment. I mentioned the numbers earlier, so please
see them later.

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Page 13 shows the results against the forecast. Please see them later as I mentioned earlier here as well.

9I will now begin with the Chemicals segment, page 15.
This shows the sales growth rate of our main products. As noted at the beginning of this page, first, in the Fine
Chemicals, the 1Q sales were down 29% YoY and also slightly below our earnings forecast. As you can see
from the figures, the volume decline in TEPIC, especially in general application, is particularly impacted here.
On the other hand, in the Basic Chemicals, sales of melamine were completely zero in 1Q FY2023, but total
sales were down 2% YoY in 1Q and slightly below the forecast.

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Page 16. This is the 1Q figure YoY.
Operating profit was JPY0.8 billion lower than the same period last year. As indicated below, first of all, sales
and profit decreased in the Fine Chemicals. As I mentioned earlier, the reason for this was the significant
decrease in demand for TEPIC for general applications.
As shown in the lower right-hand corner, sales in the Basic Chemicals decreased slightly by JPY0.1 billion, while
operating profit remained unchanged.
Sales of melamine decreased due to the end of sales, but sales of other products such as Urea/AdBlue
increased.
Although I mentioned the high cost of raw materials and fuel as a factor in the decrease in profit, in reality,
the procurement cost of natural gas was almost flat, while the increase in the cost of electricity had a slightnegative impact.

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Continued on page 17.
Sales were down JPY0.3 billion from the forecast, while operating profit was in line with the forecast, as I
mentioned earlier.

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Next is the Performance Materials segment. Skip to page 21.
As usual, we have included a bar chart here with an image of sales by sub-segment.
The 1Q results for FY2023 are shown in the bar graph on the far right, and Display Materials are shown at thebottom, Semis Materials in the middle, and Inorganic Materials at the top.

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Next, page 22, are the sales growth rates for our major products.
First of all, as mentioned at the beginning of this page, sales of Display Materials increased by 3% in 1Q, which
was when the previous year's 1Q results for FY2022 were still very strong. Compared to that, the results areup 3%, and also higher than the forecast.
On the other hand, in Semis Materials, sales fell 15% in 1Q and were also lower than the forecast. The figuresfor 1Q FY2022 were still favorable, but we have been in an adjustment phase since 2H of last year.
Lastly, Inorganic Materials, sales increased 3% in 1Q and were also down compared to the earnings forecast.

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The next section is by display mode. Page 23.
As mentioned at the beginning of this page, SUNEVER's total sales increased 4% YoY in 1Q and exceeded theforecast. The conversion from other modes such as rubbing IPS to photo IPS continues to progress steadily.
The table below shows sales growth rates for VA, and IPS including both rubbing and photo. These also
showed an increase in revenues and an upward swing, respectively.

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Continuing on page 24, we have specific profit figures.
For the Performance Materials segment as a whole, sales decreased by JPY1.0 billion YoY and operating
income decreased by JPY1.4 billion, while fixed costs increased by JPY0.8 billion.
The majority of these results are due to Semis Materials, and in a sense, as I mentioned earlier, this is because
the semiconductor market was very good in 1Q FY2022, which is one year ago.
Comments are provided below for each of the sub-segments, respectively. Sales of Display Materials
increased, but profit decreased slightly. There is also a fixed cost increase of JPY0.1 billion. And sales and profit
down in Semis Materials, there is an increase in fixed costs, JPY0.6 billion out of the JPY0.8 billion for overall
is due to Semis Materials.
On the other hand, sales of EUV materials increased. Inorganic Materials sales and profit increased slightly.

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Page 25. This is the result compared to outlook.
As noted at the beginning of the page, there was an upward swing of JPY0.3 billion in sales and a slightdownward swing of JPY0.1 billion in operating profit.
As shown in the lower right-hand corner, fixed costs were down JPY0.1 billion in the Semis Materials, which
was a factor in the increase in profits.
As for Display Materials, both net sales and operating profit were up, as described here. The shipment forsome clients' inventory buildups also contributed to this upward swing.
In any case, photo, rubbing, and VA are each above their forecast.

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This is followed by Agrochemicals. Please skip to page 27, and you will see the growth rate of sales of our main
products.
As mentioned at the beginning of this page, sales in 1Q were down 5% YoY, and slightly below the forecast.
In the case of Agrochemicals, as you can see, the range of pluses and minuses for each product is quite large,
and while it may not be very useful to make comparisons on a quarterly basis, the figures are shown here.
In particular, the big plus is GRACIA. As shown in the bar graph below, the YoY increase was 87% compared tothe actual results for the 1Q FY2022, and a double-digit increase compared to the forecast announced in May
of the same quarter.
The veterinary drug Fluralaner, which I will talk about later, was minus 4% YoY.

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Please see page 28 for the figures in the YoY comparison section.
In terms of sales, there was a decrease of JPY0.9 billion, and operating profit also decreased by JPY0.2 billion
due to a JPY0.2 billion increase in fixed costs. We have included a few comments for each of the major
products. As you can see from the YOY figures, sales of ROUNDUP decreased due to poor weather conditions,especially after the Golden Week holidays (from the end of Apr to the beginning of May), and the volume ofboth ML and AL decreased.
In addition, sales of ALTAIR also declined slightly, with a slight decrease in volume due to an increase indomestic distribution inventories.
On the other hand, sales of TARGA increased due to strong sales in Europe.
LEIMAY's sales are a little bit special, because sales were quite biased toward 1Q in FY2022, but for this fiscal
year, sales are not biased toward 1Q but rather toward 2Q. Therefore, sales decreased in this 1Q YoY.
As I mentioned earlier, sales in GRACIA are expanding, especially in Asia, and some shipments were madeahead of schedule.
Finally, sales of Fluralaner were down slightly. The sales of API were slightly lower in 1Q FY2023 than in the
1Q FY2022 because the starting point was higher due to some shipments that had been pushed back from 2H
of FY2021.
On the other hand, royalties increased.

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Continuing on page 29, here is the forecast.
As you can see, sales were down JPY0.4 billion, while operating profit was in line with the forecast. This
includes a fixed cost downswing of JPY0.4 billion, which is a factor in the increase in profit.
Regarding the comments on the main products, they are almost same as I mentioned earlier, but for the lastline, Fluralaner animal drug was in line with expectations.

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Next page 30, the list of major products, et cetera, have not been changed from the text of this May's scheduleannouncement.

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Also, in the area of veterinary drugs, both pages 31 and 32 are basically the same as in the previous May.

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This is the explanation of Agrochemicals, and the last one is the Healthcare segment. Page 37.
As mentioned in the comments below, sales and profits of LIVALO in Healthcare were down slightly YoY, but
those of Custom Chemicals were up. In particular, sales for the current fiscal year were slightly weighted
toward 1Q resulting in an increase in both sales and profit.

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On the other hand, on page 38, we show the comparison with the earnings forecast, which is almost asplanned for LIVALO, but slightly higher than expected for Custom Chemicals.

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Next, page 40 shows ESG topics.
I would like to make a few comments on the two lines under Governance in June 2023. We had a shareholders'meeting in June, and two outside female directors were appointed as board members, previously one, so now
we have added another director.
Accordingly, from a total of 10 directors, 20% are women, and half of the four outside directors are women.
In addition, the Corporate Governance Report was updated this past June.

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Continuing on page 41, here explains external evaluation of ESG, et cetera.
In June, we were selected for inclusion in the FTSE (second from the top) and MSCI (right) Japan Empowering
Women (WIN) Select Index, for the fourth consecutive year, second consecutive year, or fourth consecutive
terms, respectively.

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Finally, on page 43, GHG emissions for FY2022 were 328 thousand tons, as shown in the bar graph.
Therefore, from the FY2021 results, there was a decrease of approximately 5%.
In any case, we are aiming for 254 thousand tons in FY2027, which is a 30% reduction from the FY2018 result,and we would like to achieve this goal through the measures shown on the lower right.
That is all for my explanation.

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Question & Answer<Questioner 1>
Q: I have two questions. The first one is about Performance Materials. Please tell me about the current trendof Display Materials and Semis Materials, respectively. Also, VA was quite strong in 1Q, so please explain thisarea as well.
A: First of all, regarding the current status of Performance Materials, 1Q was better than expected for Display
Materials, but as I mentioned earlier, some of this was due to accelerated shipments and some was due toinventory buildup. In any case, I do not see any change in the gradual recovery that bottomed out in 2Q lastyear. As for VA, the recovery of TVs and other products, as well as a partial increase in market share from 2Hof the previous fiscal year, contributed to this figure.
As for Semis Materials, as you know, it has been in an adjustment phase since 2H of last year, and as for thecurrent situation, the figures for 1Q are as I mentioned earlier. We are now looking to see when thisadjustment phase will start to recover.
Q: You don't see anything in particular about the advanced shipment you mentioned earlier, or the inventorybuildup in VA, do you?
A: There were some buildups in photo IPS.
Q: The second one is related to Agrochemicals. The agrochemical market has been moving quite a bit, so
please tell me how the market is moving by region and what the demand trends are for Fluralaner’s end
products.
A: First, in terms of regional trends in Agrochemicals, I will explain this separately for overseas and domestic
markets.
First of all, in the domestic market, there was a considerable amount of activity, and all companies
experienced poor domestic sales from April to June, and we also experienced the same trend.
In Japan, in particular, sales were up and down in various regions, but it was not that any one region wasparticularly bad, but that all of Japan or the country in general was in a bad condition.
The reason for this is believed to be that the distribution channel purchased a considerable amount of
products before the price rose, and the inventory was retained, resulting in low shipments frommanufacturers during the April–June period.
In the overseas market, there was a considerable increase and decrease by region. In terms of ourAgrochemicals, overall, sales were driven by GRACIA, there was also a strong performance in Asia. That is all
for Agrochemicals by region.
Also, regarding the animal health products, as I mentioned earlier, the 1Q figures were almost in-line with theforecast, but the YoY figure was minus 4%. However, as I mentioned earlier, 1Q FY2022 saw an increase due
to a few special factors.
We have not changed our view of 3% YoY sales growth in FY2023, but Merck has started disclosing some ofits global BRAVECTO sales, and we expect our figures may grow in line with those figures.

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Q: I understand. Thank you very much.

<Questioner 2>
Q: First, regarding Performance Materials, could you tell us your current view of QonQ from 1Q to 2Q, whether
Display Materials will go up to another level, and as for Semis Materials, where do you see the bottom forthem?
A: As for the 2Q, of course we cannot say anything definite at this time. In terms of trends, as I mentioned
earlier, the Display Materials seem to be on a gradual recovery trend after bottoming out in the 2Q of lastyear. As for the Semis Materials, we are still looking at the situation at this point, but we think that recovery
will probably start from the 3Q onward, anyway, please wait until November.
Q: Next, I would like to ask about ROUNDUP and GRACIA in the Agrochemicals. First of all, ROUNDUP
decreased 14% YOY, and as you mentioned earlier, the weather has been unfavorable nationwide. On theother hand, I am not sure what will happen in 2Q due to the heat wave. What is the status of ROUNDUP rightnow compared to the annual forecast, including such impact? And how about GRACIA? As you explained, it
seems that some shipment was brought forward, so I wonder if you could suggest how this should be viewed
in relation to the annual forecast.
A: First, regarding the outlook for ROUNDUP, as explained earlier in the introduction, the weather conditionsin May and June were very unfavorable, with very heavy rains in May and especially rain on all weekends inJune, resulting in a situation where both ML and AL were significantly below the previous year's levels.
However, in July, the first month of 2Q, which began with a series of good weather, there was a recovery
trend to a certain degree, so there is no particular concern for the entire year.
Then, as for GRACIA, you asked earlier that there is a tendency to move up the shipment schedule a little bit.
There will be also some impact from competitive products in 2H of the year and throughout the year, bothoverseas and in Japan, but it will be limited and is not a cause for concern.
Q: Would it be correct to say that there is currently no need to change the Company's forecast of 6% annual
growth for ROUNDUP and 37% growth for GRACIA?
A: That is how I would like you to understand at this time.
Q: I understand. Thank you very much. That's all from me.

<Questioner 3>
Q: The first one is for Agrochemicals. On page 29, you indicate that fixed costs decreased JPY0.4 billion
compared to your plan. I would like to confirm what specific items are contributed and whether there seems
to be room for them to continue to decrease in the future.
Also, I would like to know about the operation status of NBR in India and its actual profit contribution.
Also, you mentioned earlier that inventories had accumulated in Japan due to purchases made before theprice increase, but are there any concerns in the future due to the fact that inventory has been cleared
considerably during the April–June period? From the financial results of your competitors in the same industry,30

it seems that some distribution inventory was seen in India. In the case of GRACIA, I think that relatively more
exports are made to India, so I wonder if GRACIA has been affected by any kind of adjustment of distribution
inventory in India. Also, could you please explain, to the extent possible, how much of GRACIA's advanceshipment is in monetary terms?
A: First, regarding the downward swing in fixed costs, we can broadly say that expenses decreased. The othermajor factor was that the agrochemicals-related testing costs were considerably lower than expected,
resulting in a JPY0.4 billion decrease in the total amount.
As for your second question, regarding the operation of NBR, as we have already announced to the public,commercial production started in March of this year, and the production of the second raw material willprobably start this month or next month. We are a little behind schedule in our overall plan, but we areworking to achieve a smooth start of operations.
Third, as for domestic agrochemicals inventories, we know that the inventory in primary distribution as of theend of June has already been cleared compared to the previous year, and that the inventory ratio has
decreased from the previous year. We believe that the inventory held by primary distribution, especially
temporary demand in response to the price increase, was cleared in April, May, and June, and we do not
expect the inventory to have any impact in 2H of the year or for the entire year.
About earlier shipment of GRACIA, there is no particular problem, and we expect the scale to be less than
JPY0.5 billion.
Q: How much of that delay in NBR operations is a downside factor for profits? Is it minor because it was not
mentioned as a downside factor?
A: For the current fiscal year, the impact is expected to be negligible.
Q: I understand. What specific expenses are among the fixed costs?
A: They are something like advertising costs. Expenses in this area were shifted back a bit. In other words, thisdid not occur much in 1Q. Also, as I mentioned earlier, the expenditure for testing, which is also about JPY0.2
billion, was less than expected.
Q: Yes, I understand. Thank you very much. Secondly, regarding Semis Materials, the business environmenthas become considerably more difficult, and according to what you told us three months ago, I think that thebusiness environment was more difficult than the forecast three months ago, since the production cutback ofmemory in South Korea was not factored into the initial plan.
In this context, I would like to know about the background of the EUV's upswing. Also, I think you said thatshipments to China were skewed in 4Q FY2022, but will there be a reactionary decline in 1Q and is it likely tonormalize from 2Q onward? Please tell us the status of Semis Materials.
A: First, I will answer about EUV. The EUV business has maintained a high market share among Koreancustomers, and advanced semiconductors have been boosted by the high production volume and usage
volume.
As for inventory in China, they built up inventory in 4Q FY2022, after which it has largely normalized.
Q: I understand. Thank you for the details.

31<Questioner 4>
Q: The first point is a question about Fluralaner. Looking at page 27, I see that your plan was a 3% YoY decline,
while the actual result was a 4% decline, so it looks like an error. However, the assumed exchange rate is
JPY128, if so, I would like your comments on whether there has been any change in demand trends.
On the other hand, BRAVECTO's sales in Merck for the April–June period, a 7% increase on a local currency
basis, seem to be strong, and I think the sales of BRAVECTO during the April–June period will affect yourcompany in 2Q. In that sense, does the outlook for 2Q and beyond look better than you originally expected
at the beginning of the period? Could you please explain that area?
A: As for your first question, in 1Q, as you just mentioned, YoY sales were down 4%, which, as I mentioned
earlier, is a slight decrease in sales, but in monetary terms it is very small from our point of view. Since this isalmost in line with our forecast, from our point of view, we are not concerned at all.
As you mentioned, Merck discloses the figures for 2Q, that is, the period from April to June, so we expect thatthe growth rate for our company, especially in royalties, will probably be a reasonable figure according totheir figures, compared to the forecast.
Q: Thank you very much. The second question is about the competitive environment for Display Materials. A
competitor in the alignment film industry is planning to go private, and that company is particularly
emphasizing the need to strengthen the competitiveness of its semiconductor materials. They have nothighlighted much about display materials, but could you please explain what you see as the potential forchanges in the competitive environment?
Especially since it will be included in a government fund, I think the display materials and China businesses
are important, but I don't think there will be any negative effects for your company, even if there are somepositive effects for you. Although there may be only a limited number of points on which you can comment,
I would appreciate it if you could explain the situation to the best of your ability.
A: As for the competitor, there has been no significant change at this time. We are unable to comment on the
future, or on the future trends of other companies, as we are not in a position to know what they will be doing.
While we refrain from commenting on the decisions of other companies, we do not anticipate any negative
effects on our competitive environment or our future.
Q: Thank you very much. Just a follow-up question related to that point. Both they and your company handle
the same important lithography process components in the semiconductor materials field. How have you
been involved in the process of working with that resist manufacturer for ARC so far? If the industry
restructuring were to occur among the resist manufacturers, how would it affect your company? I know thisis also a bit limited in terms of what you can comment on, but to the extent possible, how about this?
A: I would like to refrain from commenting on the decisions of that company, but our current policy remains
the same, and we will continue to work with each resist manufacturer to do what we can.
Q: Thank you very much.

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<Questioner 5>
Q: I have two quick questions. On the first point, in the area of Semis Materials, I would like to know about
the multi-layer process materials. 1Q was down to a 15% decline versus the planned 4% decline. Could you
please add a few details as to which areas in particular were different from your expectations?
A: The difference between the overall decline and the forecast is due to a larger-than-expected production
cut in Korean memory and a larger-than-expected decline in Taiwan's capacity utilization rate.
Q: I understand. For the second question, I would like to ask you to explain the increase in inventory in theoverall balance sheet. Could you please explain a little bit around which segment of the inventory is
increasing?
A: As I explained earlier on page 10 of the balance sheet, inventories increased JPY6.9 billion from the end of
March. The largest portion of this is agrochemical inventories.
However, it is a rather unique factor at the end of this 1Q, in a sense, and the Company is hardly concerned
about it.
Inventories have increased by more than JPY15.0 billion since the end of June 2022, and more than half ofthese inventories are agrochemical products. Sales of Agrochemicals themselves have grown considerablyfrom FY2021 to FY2022, and also this fiscal year, so in that sense, we are not so concerned about this
temporary decline at the end of June. Overall, we believe that the situation is within our ability to manage.
Q: Regarding the current YoY increase in Agrochemicals, it could be interpreted that sales are likely to behigher than originally expected, or it could be interpreted that there is a lot of inventory as a result of thedownturn. Is it correct to say that it is in-line?
A: Since this is a comparison between the end of June 2022 and the end of June 2023, the inventory figures
are basically based on sales in FY2021 or FY2022, so in that sense, the increase is a significant increase in sales.
As for the end of June 2023, as I mentioned earlier, there was a spot accumulation, which we expect will
gradually disappear, so we are not so concerned about it.
Q: Thank you very much.

<Questioner 6>
Q: I have two questions. In the area of Semis Materials, sales of ARC and multi-layer process materials have
dropped, but is it correct to say that the unit sales price has basically been maintained?
A: In terms of YoY results for 1Q 2023, both ARC and multi-layer process materials prices were positive
compared to the previous year.
Q: Thank you very much. Second, in the area of Chemicals, TEPIC's sales have dropped significantly. I would
appreciate your comments on this background, again.
A: First of all, the decline in TEPIC's sales is most largely attributable to the drop in market prices due to asurplus of Chinese products. In addition, we have a customer in North America, who had an inventory buildup
last year as a result of logistics disruptions, which has now been largely cleared up.

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Q: In the North American market, is it recent that inventory is being cleared out? Are you saying that it was
still a bit affected until 1Q?
A: There was still some impact in 1Q, but the impact has been decreasing a bit during 2Q.
Q: I understand. Thank you very much.

[END]

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