Consolidated Financial Results for the Three Months Ended June 30, 2019
(JPGAAP)
August 2, 2019
Stock Exchange: Tokyo
Name of listed company: Nissan Chemical Corporation
URL: http://www.nissanchem.co.jp/
Code number: 4021
Representative: Kojiro Kinoshita, President
Inquiry to: Nobuhiro Arita, Associate Executive Officer and Deputy Head of Finance and Accounting Department Tel. +81 3 4463 8404
Scheduled submission date of quarterly report: August 9, 2019
Scheduled dividend payment date: ―Supplemental information: Yes
Financial results meeting : Yes(Amounts rounded down to the nearest million yen)

1. Consolidated Financial Results for the Three Months Ended June 30, 2019 (From April 1, 2019 to June 30, 2019)(1) Consolidated Operating Results(% indicates the rate of increase/decrease against the same period of the previous year)

OperatingincomeNet sales

Three months ended June 30, 2019
Three months ended June 30, 2018
(Note) Comprehensive income:Ordinary
incomeNet income attributableto owners of parent

Million yen%

Million yen%

Million yen%

Million yen%

48,718

(4.2)

9,341

(12.5)

9,981(16.1)

7,835(11.3)

50,877

7.3

10,6796.4

11,902

9.7

8,830

12.0

Three months ended June 30, 2019

: 5,898 million yen ,(21.3%)

Three months ended June 30, 2018

: 7,499 million yen ,(21.2%)

Basic earnings
per share

Diluted net income
per share

Yen

Yen

Three months ended June 30, 2019

53.13

－

Three months ended June 30, 2018

59.25

－

(2) Consolidated Financial Position
Total assets

As of June 30, 2019

Equity ratio

Million yen

Million yen%

220,203

177,82580.0

182,07473.0

246,990

As of March 31, 2019
(Reference) Shareholders' equity:

Net assets

As of June 30, 2019

: 176,221 million yen

As of March 31, 2019: 180,345 million yen

2. Cash Dividends
Cash dividends per shareFirst
quarter

Secondquarter

Yen

Year ended March 31, 2019－Year ending March 31, 2020－

Year ending March 31, 2020
(Forecast)Third
quarter

Yen

Year-end

Yen

Annual

Yen

Yen

40.00

－

42.00

82.00

42.00

－

46.00

88.00

(Note) Revision of the latest released dividend forecast: None

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2020 (From April 1, 2019 to March 31, 2020)(% indicates the rate of increase/decrease against the same period of the previous year)
OperatingincomeNet sales

Ordinary
incomeNet income attributableto owners of parent

Basic earnings
per share

Million yen%

Million yen%

Million yen%

Million yen%

Yen

Six months
ending September 30, 2019

99,0001.0

17,800(8.2)

18,400(10.7)

13,700(11.1)

93.25

Year ending March 31, 2020

210,500

2.7

38,7004.3

40,2002.8

30,2002.8

205.83(Note) Revision of the latest released forecast of financial results: None

4. Notes(1) Changes in significant consolidated subsidiaries(Changes in specified subsidiaries involving changes in scope of consolidation)(2) Application of special accounting treatment to preparation of quarterly financial statements: None: None(3) Changes of accounting policies and accounting estimates, and restatement
1. Changes of accounting policies due to revisions of accounting standards: None2. Changes of accounting policies other than the above: None3. Changes in accounting estimates: None4. Restatements: None(4) Number of shares outstanding (common shares)
1. Number of shares outstanding (including treasury shares)
As of June 30, 2019

: 148,000,000 shares

As of March 31, 2019

: 149,000,000 shares

2. Number of treasury shares
As of June 30, 2019

: 1,027,952 shares

As of March 31, 2019

: 1,217,872 shares

3. Average number of shares outstanding
As of June 30, 2019

: 147,485,633 shares

As of June 30, 2018

: 149,025,872 shares* Presentation regarding implementation status of quarterly review procedures
The financial release is not subject to quarterly review.
* Explanations regarding appropriate use of business forecasts and other special notes
The business forecast contained in this report is based on information available at the time of disclosure.
Actual operating results may differ materially from the forecast due to various factors.
For supplemental information, please refer to our website.
Financial results audio webcast will be released on our website as well.

Table of Contents for Attached Materials

1. Qualitative Information on Quarterly Results(1) Business Performance(2) Financial Position........................................................................................................ 2.............................................................................................................................. 2..................................................................................................................................... 4(3) Forecast of Consolidated Business Results and Other Forward-looking Information(4) Basic Policy on Distribution of Earnings
2. Consolidated Financial Statements.................................................. 4......................................................................................................... 4................................................................................................................... 5(1) Consolidated Balance Sheets ...................................................................................................................... 5(2) Consolidated Statements of Income and Statements of Comprehensive Income(3) Consolidated Statements of Cash Flows...................................................... 7........................................................................................................ 9(4) Notes to Consolidated Financial Statements.................................................................................................. 10(Notes on Assumption of Going Concern)................................................................................................. 10(Notes on Significant Changes in Shareholders' Equity)(Segment Information)................................................................................10.........................................................................................................................10

1

1. Qualitative Information on Quarterly Results(1) Business Performance
During the year ended June 30 (April 1, 2019 to June 30, 2019), the domestic economy saw firm consumer spending
due to an improvement in the employment and income environment against the backdrop of a labor shortage. However,exports to Asia declined due to the impact of trade conflicts between the United States and China and other factors.
Under such circumstance, sales in the Chemicals Segment decreased in both Basic Chemicals and Fine Chemicals.
Sales in the Performance Materials Segment decreased in Semiconductor Materials and Inorganic Materials, while
Display Materials increased. The Agricultural Chemicals Segment sales decreased. In the Pharmaceuticals Segment,
sales of "Custom Chemicals" (custom manufacturing and process researching services for pharmaceutical companies)
decreased, while in-house drug discovery increased.
As a result, business performance for this period were as follows.
(Million yen)
FY2018
Accumulated
Consolidated
Period for 1Q

FY2019
Accumulated
Consolidated
Period for 1Q

Change(Year on Year)

Change fromoutlook (Note)Sales

50,877

48,718

ሺ2,158)(1,000)Operating income

10,6799,341

ሺ1,338)+600

Ordinary income

11,902

9,981

ሺ1,921)+200

Net income
attributable to ownersof parent

8,830

7,835

ሺ994)

+600

(Note) Outlooks are described on page 12 of the FY2018 Presentation Materials (announced on May 15, 2019).
Explanations by segments are as below.
The Chemicals Segment
In Basic Chemicals, sales of melamine (adhesives agent for particle board) and high purity sulfuric acid (agent used
for cleaning semiconductor) decreased. In melamine exports in particular, sales prices declined due to the impact oflow price Chinese competitors. In Fine Chemicals, sales of "TEPIC" (epoxy compound for LED sealants) for electronicmaterials and "HI-LITE" (chlorinated isocyanuric acid for sterilizing) decreased.
As a result, sales of this segment were 8,402 million yen (a decrease of 293 million yen) and operating income were
881 million yen (a decrease of 678 million yen). Compared to outlook (Note), net sales were below 1,000 million yen
and operating income were below 500 million yen.
(Note) Outlooks are described on page 17 and 18 of the FY2018 Presentation Materials (announced on May 15,2019).

2

The Performance Materials Segment
In Display Materials, sales of “SUNEVER” (LCD alignment coating) for large-sized products such as TV were strong.
In Semiconductor Materials, sales of antireflective coatings for semiconductors (ARC®*) were affected by a decreasein utilization by some customers. In Inorganic Materials, sales of "SNOWTEX" (semiconductor polishing, hard coating,etc.) were weak. Sales of Organo / Monomer sol (various kinds of coating materials, resin additive) and Oilfieldmaterials (for enhancing oil recovery) decreased. On the other hand, fixed costs decreased due to reduce in researchexpenses, which lead to a slight decrese in operating income.
As a result, sales of this segment were 15,125 million yen (a decrease of 510 million yen) and operating income
were 3,858 million yen (a decrease of 63 million yen). Compared to outlook (Note), net sales were below 800 million
yen and operating income were above 300 million yen.
(Note) Outlooks are described on page 17 and 18 of the FY2018 Presentation Materials (announced on May 15,2019).
*ARC® is registered trade mark of Brewer Science, Inc.
The Agricultural Chemicals Segment
Sales of Fluralaner (active ingredients for veterinary pharmaceuticals) decreased due to inventory adjustments,
however it was above the initial outlook. Sales of domestic agrochemicals were strong due to sales of "GRACIA"(insecticide) launched in May in Japan. It was above the initial outlook. Sales of overseas agrochemicals decreased
due to lower sales of "TARGA" (herbicide) and other products.
As a result, sales of this segment were 14,667 million yen (a decrease of 1,692 million yen) and operating income
were 4,526 million yen (a decrease of 609 million yen). Compared to outlook (Note), net sales were above 600 million
yen and operating income were above 900 million yen.
(Note) Outlooks are described on page 17 and 18 of the FY2018 Presentation Materials (announced on May 15,2019).
The Pharmaceuticals Segment
Shipments of "LIVALO" (anti-cholesterol drug) were firm, although sales prices declined due to an increase ingenerics both in Japan and overseas. Shipments of "Custom Chemicals" declined.
As a result, sales of this segment were 1,871 million yen (an increase of 25 million yen) and operating income were
384 million yen (an increase of 121 million yen). Compared to outlook (Note), net sales and operating income wereabove 300 million yen.
(Note) Outlooks are described on page 17 and 18 of the FY2018 Presentation Materials (announced on May 15,2019).
Trading
Sales of this segment were 17,470 million yen (a decarese of 331 million yen) and operating income were 526 million
yen (a decrease of 35 million yen). Compared with outlook (Note), net sales were below 1,300 million yen and operating
income were below 100 million yen.
(Note) Outlooks are described on page 17 and 18 of the FY2018 Presentation Materials (announced on May 15,
2019)
OthersSales of this segment were 4,868 million yen (an increase of 268 million yen) and operating income were 52 million
yen (a decrease of 18 million yen).

3(2) Financial Position(Position of Assets, Liabilities and Net Assets)
Total assets as of June 30, 2019 was 220,203 million yen (a decrease of 26,787 million yen from March 31, 2019).
It is mainly due to the decrease of cash and deposits.
Also, total liabilities as of June 30, 2019 was 42,377 million yen (a decrease of 22,539 million yen). It is mainly due
to the decrease of short-term loans payable.
Net assets as of June 30, 2019 was 177,825 million yen (a decrease of 4,248 million yen).
As a result of these factors, equity ratio was 80.0% (an increase of 7.0% from March 31, 2019).
(Position of Cash Flow)
Deducting income taxes paid from income before income taxes and non-controlling interests, depreciation andgain and loss on working capital, net cash provided by operating activities for the three months ended June 30, 2019was 9,976 million yen (6,468 million yen for the same period of the previous year).
Due to the investment on plant and equipment, net cash used in investing activities for the three months ended
June 30, 2019 was 603 million yen (3,993 million yen).
Due to the decrease in loans payable, payment for dividends and share repurchase, net cash used in financing
activities for the three months ended June 30, 2019 was 29,782 million yen (26,125 million yen).
As a result of these factors, cash and cash equivalents at the end of this period was 15,566 million yen, reflecting
exchange of 206 million yen. It decreased by 20,616 million yen from March 31, 2019 (14,106 million yen).
(3) Forecast of Consolidated Business Results and Other Forward-looking Information
There is no change in the forecast of consolidated business results for the fiscal year ending March 31, 2020
from the statement announced on May 15, 2019.
(4) Basic Policy on Distribution of Earnings
The Company’s basic policy of profit allocation is returning to shareholders by improving company value throughincreasing revenue in the medium and long terms.
In medium-term business plan “Vista2021” Stage II launched from April 2019, the company aim to realize dividend
payout ratio to be 42.5% in FY2019 and to be 45% after FY2020. In addition, total payout ratio is aimed to be 72.5%
in FY2019 and to be 75% in FY2020.

4

2. Consolidated Financial Statements(1) Consolidated Balance Sheets(Million yen)
As ofJune 30, 2019

As ofMarch 31, 2019
AssetsCurrent assets
Cash and deposits

36,183

15,566

Notes and accounts receivable - trade69,19364,164Merchandise and finished goods

32,21532,441

41451

Raw materials and supplies

9,742

10,242

Other

5,146

6,460

(32)

(28)

152,490

129,298

Buildings and structures, net

25,251

24,855

Other, net

27,477

27,068

Total property, plant and equipment

52,72951,924

Software

721

675

Other

796

751

1,517

1,426

Investment securities

35,22932,578

Other

5,117

5,066

Work in process

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment

Intangible assets

Total intangible assets
Investments and other assets

Allowance for doubtful accounts

(92)

(92)

Total investments and other assets

40,25337,553

94,50090,904

246,990

220,203

Total non-current assets
Total assets

5

(Million yen)
As ofMarch 31, 2019

As ofJune 30, 2019

Liabilities
Current liabilities
Notes and accounts payable - trade

17,80916,628

Short-term loans payable

25,465

7,921

Income taxes payable

4,330

2,384

Provision for bonuses

2,137

642

25

6

Other

10,4309,975

Total current liabilities

60,19837,558

1,116

1,116

Provision for directors' bonuses

Non-current liabilities
Long-term loans payable
Provision for business structure improvement

370

311

Provision for loss on business of subsidiaries and affiliates

309

309

Net defined benefit liability

152

161

2,768

2,921

Other
Total non-current liabilities

4,717

4,819

64,91642,377

Capital stock

18,942

18,942

Capital surplus

13,613

13,613Retained earnings

143,200

139,738

Total liabilities
Net assets
Shareholders' equity

Treasury shares(6,291)(5,030)Total shareholders' equity

169,464

167,264

10,6349,255

Foreign currency translation adjustment

(11)

(547)

Remeasurements of defined benefit plans

258

249

10,8808,957

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

6

1,728

1,603

182,074

177,825

246,990

220,203(2) Consolidated Statements of Income / Consolidated Statements of Comprehensive Income- Consolidated Statements of Income(Million yen)Three Months Ended
June 30, 2018

Three Months Ended
June 30, 2019

Net sales

50,877

48,718

Cost of sales

28,29628,310Gross profit

22,581

20,408Selling, general and administrative expenses

11,901

11,067

Operating income

10,6799,341

Non-operating income
Interest income

66Dividend income

308

330

Equity in earnings of affiliates

316

287

Other

706

273

1,337

898

Interest expenses

36

42

Loss on disposal of non-current assets

53

32

-

170

24

12

Total non-operating income
Non-operating expenses

Foreign exchange losses
Other
Total non- operating expenses
Ordinary income

114

258

11,902

9,981

-

852

Extraordinary income
Gain on sales of investment securities
Total extraordinary income

-

852

-

-

Income before income taxes and non-controlling interests

11,902

10,833

Income taxes - current

2,273

2,197

Extraordinary losses

Income taxes - deferred

735

764

Total income taxes

3,008

2,961

Net income

8,893

7,872

Net income attributable to non-controlling interests
Net income attributable to owners of parent

7

63

36

8,830

7,835

- Consolidated Statements of Comprehensive Income(Million yen)Three Months Ended
June 30, 2018

Three Months Ended
June 30, 2019

8,893

7,872

(1,315)(1,378)Foreign currency translation adjustment

(66)

(586)

Remeasurements of defined benefit plans, net of tax

(13)

(8)

0

(0)

(1,394)(1,974)

7,499

5,898

7,448

5,913

50

(15)

Net income
Other comprehensive income
Valuation difference on available-for-sale securities

Share of other comprehensive income of entities accounted forusing equity method
Total other comprehensive income
Comprehensive income(Comprehensive income attributable to)
Owners of parent
Non-controlling interests8(3) Consolidated Statements of Cash Flows(Million yen)Three Months Ended
June 30, 2018

Three Months Ended
June 30, 2019

Income before income taxes and non-controlling interests

11,902

10,833

Depreciation and amortization

2,434

2,260

Interest and dividend income

(315)

(336)

Loss (gain) on sales of investment securities

(267)

(852)

36

42

Cash flows from operating activities

Interest expenses
Loss (gain) on disposal of non-current assets

53

32

Decrease (increase) in notes and accounts receivable - trade

2,476

4,849

Decrease (increase) in inventories(2,322)(1,459)

Increase (decrease) in notes and accounts payable - trade(3,346)(1,071)

Other

154

(874)

Subtotal

10,80813,425487

604Interest and dividend income received
Interest expenses paid

(25)

(37)

Income taxes paid

(4,801)(4,016)

Net cash provided by (used in) operating activities

6,468

9,976

Purchase of investment securities

(902)

(2)

Proceeds from sales of investment securities

396

1,746

(2,504)(2,247)

Cash flows from investing activities

Purchase of property, plant and equipment
Payments for retirement of property, plant and equipment

(43)

(29)

Net decrease (increase) in short-term loans receivable

(917)

(26)

Other

(21)

(43)

(3,993)(603)

Net increase (decrease) in short-term loans payable(15,575)(17,463)

Cash dividends paid

(5,380)(6,206)

Net cash provided by (used in) investing activities
Cash flows from financing activities

Dividends paid to non-controlling interests

(167)

(111)

(5,001)(3,829)-(2,170)(0)-(26,125)(29,782)

54

(206)

Net increase (decrease) in cash and cash equivalents(23,595)(20,616)

Cash and cash equivalents at beginning of period

37,702

36,183

Cash and cash equivalents at end of period

14,106

15,566

Share repurchase
Setting up the trust for share repurchase
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents9(4) Notes to Consolidated Financial Statements(Notes on Assumption of Going Concern)
Not applicable.
(Notes on Significant Changes in Shareholders' Equity)
The Company canceled 1,000,000 treasury shares on May 10, 2019 based on the resolution of Board of Directors' meeting held on April 23, 2019.
As a result, retained earnings and treasury shares decreased by 5,091 million yen during the first quarter of current consolidated fiscal year.
Also, the Company repurchased its own shares based on the resolution of Board of Directors' meeting held on May 15, 2019. As a result, treasury
shares increased by 3,829 million yen during the first quarter of current consolidated fiscal year.
(Segment Information)
1. Information Regarding Sales, Income (Loss) of Reportable Segments
1) For the Three Months Ended June 30, 2018 (From April 1, 2018 to June 30, 2018)
Chemicals

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals(Million yen)
Trading

Others

Total

Adjustment(1)

Consolidated
Total

50,877

Sales
Sales to outside customers

6,235

13,90014,972

Intersegment Sales

2,460

1,734

1,386

Total Sales

8,696

15,635

16,359Segment Income or Loss
(Operating Income or Loss)

1,560

3,922

5,136

11,982

1,940

50,877

㻙

5,819

2,660

14,062(14,062)

㻙

1,845

17,801

4,600

64,940(14,062)

50,877

262

562

71

11,514(835)

10,6791,845

Notes: (1) The (835) million yen adjustment in segment income includes (81) million yen in intersegment eliminations and (754) million yen
corporate expenses not attributable to any reportable segment. The corporate expenses are mainly group administrative expenses
which do not belong to any segment.
2) For the Three Months Ended June 30, 2019 (From April 1, 2019 to June 30, 2019)
Chemicals

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals(Million yen)
Trading

Others

Total

Adjustment(1)

Consolidated
Total

Sales
Sales to outside customers

6,025

13,37013,898

1,860

11,6801,877

48,712

5Intersegment Sales

2,377

1,754

769

11

5,789

2,991

13,693(13,693)

㻙

8,402

15,125

14,667

1,871

17,4704,868

62,406(13,687)

48,718

881

3,858

4,526

384

526

52

10,229

(888)

9,341

Total Sales
Segment Income or Loss
(Operating Income or Loss)

48,718Notes: (1) The (888) million yen adjustment in segment income includes (134) million yen in intersegment eliminations, 5 million yen sales
not attributable to any reporting segment, and (759) million yen corporate expenses not attributable to any reportable segment.
The corporate expenses are mainly group administrative expenses which do not belong to any segment.

10