Consolidated Financial Results for the Nine Months Ended December 31, 2019
(JPGAAP)
February 7, 2020
Stock Exchange: Tokyo
Name of listed company: Nissan Chemical Corporation
URL: http://www.nissanchem.co.jp/
Code Number: 4021
Representative: KINOSHITA Kojiro, President
Inquiry to: ARITA Nobuhiro, Associate Executive Officer and Deputy Head of Finance and Accounting Department Tel. +81 3 4463 8404
Scheduled submission date of quarterly report: February 13, 2020
Scheduled dividend payment date: ―Supplemental information: Yes
Financial results meeting : Yes (For institutional investors and financial analysts)(Amounts rounded down to the nearest million yen)

1. Consolidated Financial Results for the Nine Months Ended December 31, 2019 (From April 1, 2019 to December 31, 2019)(1) Consolidated Operating Results(% indicates the rate of increase/decrease against the same period of the previous year)

OperatingincomeNet sales

Nine months ended December 31, 2019
Nine months ended December 31, 2018
(Note) Comprehensive income:Ordinary
incomeNet income attributableto owners of parent

Million yen%

Million yen%

Million yen%

Million yen%

138,042(2.7)

21,440(10.0)

22,473(11.5)

17,541(6.9)

141,872

6.9

23,821

6.4

25,391

6.0

18,833

6.2

Nine months ended December 31, 2019

: 16,562 million yen , 7.3%

Nine months ended December 31, 2018

: 15,443 million yen , (32.0%)

Basic earnings
per share

Diluted net income
per share

Yen

Yen

Nine months ended December 31, 2019119.51㸫Nine months ended December 31, 2018126.64

㸫(2) Consolidated Financial Position
Net assets

Total assets

Equity ratio

Million yen

Million yen%

As of December 31, 2019

224,827

177,089

78.0

As of March 31, 2019

246,990

182,074

73.0(Reference) Shareholders' equity:

As of December 31, 2019

: 175,453 million yen

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

2. Cash Dividends
Cash dividends per shareFirst
quarter

SecondquarterYen

Thirdquarter

Yen

Year-end

Yen

Year ended March 31, 2019

䠉

40.00

㸫

Year ending March 31, 2020

䠉

42.00

㸫

Year ending March 31, 2020
(outlook)

Annual

Yen

Yen

42.00

82.00

46.00

88.00

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

3. Outlook 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 salesYear ending March 31, 2020

Ordinary
incomeNet income attributableto owners of parent

Basic earnings
per share

Million yen%

Million yen%

Million yen%

Million yen%

Yen

209,000

2.0

38,6004.1

39,7001.5

30,6004.2

208.92(Note) Revision of the latest released outlook 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 December 31, 2019

: 147,000,000 shares

As of March 31, 2019

: 149,000,000 shares

2. Number of treasury shares
As of December 31, 2019

: 1,150,124 shares

As of March 31, 2019

: 1,217,872 shares

3. Average number of shares outstanding
As of December 31, 2019

: 146,776,558 shares

As of December 31, 2018

: 148,719,567 shares(Note) The Company has introduced a “Board Benefit Trust (BBT)” from the second quarter of the current

consolidated fiscal year, and repurchased its own shares based on the trust agreement. As a result,treasury shares increased by 799 million yen.
Also, the shares held by the Trust (included in treasury shares) are deducted in calculating the number oftreasury shares at the end of the period and the average number of shares during the period.
The number of shares held by the Trust (included in treasury shares) at the end of third quarter of thecurrent consolidated fiscal year was 166,200 shares.
In addition, the average number of shares held by the Trust during the third quarter of the current
consolidated cumulative period was 83,100 shares. This is not included in the average number of shares
outstanding.
* Presentation regarding implementation status of quarterly review procedures
The financial release is not subject to quarterly review.
* Explanations regarding appropriate use of business outlooks and other special notes
The business outlook contained in this report is based on information available at the time of disclosure.
Actual operating results may differ materially from the outlook 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) Outlook of Consolidated Financial Results and Other Forward-looking Information .................................................... 4(4) Basic Policy on Distribution of Earnings
2. Consolidated Financial Statements......................................................................................................... 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 December 31 (April 1, 2019 to December 31, 2019), although capital investment was on
an upward trend, the company profitability of the manufacturing industry was deteriorated due to a slump of exports
in the overseas economy.
Under these circumstances, sales of Basic Chemicals decreased in the Chemicals Segment. Sales in the
Performance Materials Segment, Display Materials increased, while Semiconductor Materials and Inorganic
Materials decreased. Sales of the Agricultural Chemicals Segment decreased, mainly in oversea markets. In the
Pharmaceuticals Segment, sales of "Custom Chemicals" (custom manufacturing and process researching services
for pharmaceutical companies) remained the same as previous year, while sales of In-house drug discovery
decreased.
As a result, business performances during the nine months of the current fiscal years were as follows. Sales andeach income were below the same period of the previous fiscal year, however operating income, ordinary income
and net income attributable to owners of the parent exceeded outlooks announced in November.
Consolidated Results of Cumulative Period for the Third Quarter(Amounts rounded down to the nearest million yen)
3Q FY2018(Results)

3Q FY2019(Results)

Change3Q FY2019(Outlooks)

Change from
Outlooks

Net sales

141,872

138,042(3,830)139,000(957)

Operating income

23,821

21,440(2,380)20,600+840

Ordinary income

25,391

22,473(2,917)21,500+973

Net income attributableto owners of parent

18,833

17,541(1,291)

16,800+741(Note) Outlooks are described on page 7 of the 2Q FY2019 Financial Results (announced on November 8,
2019)
Explanations by segments are as below.
The Chemicals Segment
In the Basic Chemicals, sales of high purity sulfuric acid (agent used for cleaning semiconductor) remained
almost the same as previous year, while sales of melamine (adhesives agent for particle board) decreased
due to the impact of market conditions. In the Fine Chemicals, sales of "TEPIC" (epoxy compound for LED
sealants) for electrical materials (solder resist inks, LED-sealing materials, etc.) decreased, while sales forgeneral use (powder coating agent for paint) increased.
As a result, sales of this segment were 25,497 million yen (a decrease of 1,124 million yen) and operating
income were 897 million yen (a decrease of 1,345 million yen). Compared to outlooks (Note), net sales were
below 1.3 billion yen and operating income were below 0.8 billion yen.
(Note) Outlooks are described on page 13 and 14 of the 2Q FY2019 Financial Results (announced on
November 8, 2019)2

The Performance Materials Segment
In the Display Materials, sales of "SUNEVER" (LCD alignment coating) for both small-and medium-sized products
such as smartphones and large-scale products such as TVs performed well. In the Semiconductor Materials, salesof antireflective coatings for semiconductors (ARC®*) were affected by a decrease in utilization by some customers.
In the Inorganic Materials, sales of "SNOWTEX" for polishing electronic materials decreased. Sales of Organo /Monomer sol (various kinds of coating materials, resin additive) and Oilfield materials (for enhancing oil recovery)
also decreased.
As a result, sales of this segment were 48,394 million yen (a decrease of 249 million yen) and operating income
were 13,072 million yen (an increase of 623 million yen). Compared to outlooks (Note), net sales were above 0.8
billion yen and operating income were above 1.4 billion yen.
(Note) Outlooks are described on page 13 and14 of the 2Q FY2019 Financial Results (announced on November
8, 2019)*ARC® is a registered trade mark of Brewer Science, Inc.
The Agricultural Chemicals Segment
Sales of Fluralaner (active ingredients for veterinary pharmaceuticals) decreased due to the impact of inventories
of customers. Sales of domestic agrochemicals were strong due to sales of "GRACIA" (insecticide) launched in May
in Japan. ROUNDUP revenues increased from the previous year due to natural disasters in the first half of the fiscal
year, and remained steady in the third quarter of the fiscal year. Overseas sales of agrochemicals decreased mainly
for "TARGA" (herbicide) and "LEIMAY" (fungicide).
As a result, sales of this segment were 33,443 million yen (a decrease of 1,205 million yen) and operating income
were 7,535 million yen (a decrease of 992 million yen). Compared to outlooks (Note), both net sales and operating
income were above 0.3 billion yen.
(Note) Outlooks are described on page 13 and14 of the 2Q FY2019 Financial Results (announced on November
8, 2019)
The Pharmaceuticals Segment
Sales of "LIVALO" (anti-cholesterol drug) decreased due to lower sales prices due to an increase in genericproducts both in Japan and overseas. Sales of "Custom Chemicals" were almost the same as the previous year.
As a result, sales of this segment were 4,960 million yen (a decrease of 590 million yen), and operating income
were 553 million yen (a decrease of 457 million yen). Compared to outlooks (Note), net sales were the same andoperating income were below 0.1 billion yen.
(Note) Outlooks are described on page 13 and14 of the 2Q FY2019 Financial Results (announced on November
8, 2019)
Trading
Sales of this segment were 50,781 million yen (a decrease of 743 million yen), and operating income were 1,634
million yen (a decrease of 74 million yen). Compared to outlooks (Note), net sales were the same and operating
income were above 0.1 billion yen.
(Note) Outlooks are described on page 13 and14 of the 2Q FY2019 Financial Results (announced on November
8, 2019)
OthersSales of this segment were 14,931 million yen (a decrease of 2,744 million yen) and operating income were 158
million yen (a decrease of 290 million yen).

3(2) Financial Position(Position of Assets, Liabilities and Net Assets)
Total assets as of December 31, 2019 was 224,827 million yen (a decrease of 22,163 million yen from March 31,2019). It is mainly due to the decrease of notes and accounts receivable - trade.
Also, total liabilities as of December 31, 2019 was 47,738 million yen (a decrease of 17,178 million yen). It ismainly due to the decrease of loans payable.
Net assets as of December 31, 2019 was 177,089 million yen (a decrease of 4,984 million yen).
As a result of these factors, equity ratio was 78.0% (an increase of 5.0% 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 nine months ended December 31,
2019 was 34,859 million yen (32,434 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 nine months ended
December 31, 2019 was 12,914 million yen (9,684 million yen).
Due to the decrease in loans payable, payment for dividends and share repurchase, net cash used in financing
activities for the nine months ended December 31, 2019 was 39,960 million yen (37,255 million yen).
As a result of these factors, cash and cash equivalents at end of this period was 17,989 million yen (23,099 millionyen), reflecting exchange of 177 million yen. It decreased by 18,193 million yen from March 31, 2019.
(3)Outlook of Consolidated Financial Results and Other Forward-looking Information
There is no change in the outlook of consolidated business results for the fiscal year ending March 31,
2020 from the statement announced on November 8, 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 aims 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 ofDecember 31, 2019

As ofMarch 31, 2019
AssetsCurrent assets
Cash and deposits

36,183

17,989Notes and accounts receivable - trade69,19347,800

Merchandise and finished goods

32,21537,39341

957

Raw materials and supplies

9,742

12,439

Other

5,146

9,237

(32)

(29)

152,490

125,788

Buildings and structures, net

25,251

24,492Other, net

27,47728,072

Total property, plant and equipment

52,72952,564

Goodwill

4

6,127

Software721

577

Work in process

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

Intangible assets

Other

791

756

1,517

7,461

Investment securities

35,22933,621

Other

Total intangible assets
Investments and other assets

5,117

5,483

Allowance for doubtful accounts

(92)

(92)

Total investments and other assets

40,25339,011

Total non-current assets
Total assets

594,50099,038

246,990

224,827

(Million yen)
As ofMarch 31, 2019

As ofDecember 31, 2019

Liabilities
Current liabilities
Notes and accounts payable - trade

17,80919,618

Short-term loans payable

25,465

9,006

Income taxes payable

4,330

1,171

Provision for bonuses

2,137

665

25

19

Provision for directors' bonuses
Other

10,43012,479Total current liabilities

60,19842,962

Non-current liabilities
1,116

856

Provision for business structure improvement

370

294

Provision for loss on business of subsidiaries and affiliates

309

309

Net defined benefit liability

152

202

Other

2,768

3,114

Total non-current liabilities

4,717

4,775

64,91647,738

Capital stock

18,942

18,942

Capital surplus

13,613

13,613Retained earnings

143,200

138,450

Treasury shares(6,291)(5,436)

Total shareholders' equity

169,464

165,569

Long-term loans payable

Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
10,634

10,022Foreign currency translation adjustment

(11)

(371)

Remeasurements of defined benefit plans

258

232

10,880

9,884

1,728

1,635

182,074

177,089

246,990

224,827

Valuation difference on available-for-sale securities

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

6

(2) Consolidated Statements of Income / Consolidated Statements of Comprehensive Income- Consolidated Statements of Income(Million yen)
Nine Months Ended
December 31, 2018

Nine Months Ended
December 31, 2019

Net sales

141,872

138,042

Cost of sales

82,40983,295Gross profit

59,46354,747

Selling, general and administrative expenses

35,64133,306

Operating income

23,821

21,440Non-operating income
Interest income

17

19

Dividend income

676

656

Equity in earnings of affiliates

603

523

Other

1,026

709

Total non-operating income

2,324

1,908

Interest expenses

81

95

Loss on disposal of non-current assets

473

301

Plant stop losses

134

218

Other

64

259

Non-operating expenses

Total non- operating expenses

754

874

25,391

22,473Gain on sales of investment securities

-

1,727

Total extraordinary income

-

1,727

Licensing arrangement fee-

834

Total extraordinary losses-

834

Income before income taxes and non-controlling interests

25,391

23,366

Income taxes - current

4,983

5,186

Income taxes - deferred

1,455

584

Ordinary income
Extraordinary income

Extraordinary losses

Total income taxes

6,439

5,771

Net income

18,952

17,595118

53

18,833

17,541

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

7

- Consolidated Statements of Comprehensive Income(Million yen)

Net income

Nine Months Ended
December 31, 2018

Nine Months Ended
December 31, 2019

18,952

17,595

Other comprehensive income(3,450)(611)

Foreign currency translation adjustment

(18)

(395)

Remeasurements of defined benefit plans, net of tax

(39)

(25)

Share of other comprehensive income of entities accounted forusing equity method(0)0(3,509)(1,032)

15,443

16,562

15,332

16,545110

17Valuation difference on available-for-sale securities

Total other comprehensive income
Comprehensive income(Comprehensive income attributable to)
Owners of parent
Non-controlling interests8(3) Consolidated Statements of Cash Flows(Million yen)
Nine Months Ended
December 31, 2018

Nine Months Ended
December 31, 2019

Income before income taxes and non-controlling interests

25,391

23,366

Depreciation and amortization

7,889

7,382

-

211

Interest and dividend income

(694)

(675)

Loss (gain) on sales of investment securities(268)(1,727)

Cash flows from operating activities

Amortization of goodwill

Interest expenses

81

95

Loss (gain) on disposal of non-current assets

473

301

Decrease (increase) in notes and accounts receivable - trade17,25021,238Decrease (increase) in inventories(11,166)(9,033)

Increase (decrease) in notes and accounts payable - trade

1,729

1,916

Other

(171)

(1,205)

Subtotal

40,51541,870Interest and dividend income received

1,139

1,249

(74)

(91)

Income taxes paid

(9,145)(8,169)Net cash provided by (used in) operating activities

32,43434,859Purchase of investment securities

(908)

(326)

Proceeds from sales of investment securities

398

2,944

(7,441)(6,563)

(376)

(266)

-

(6,335)(1,231)(1,983)Purchase of long-term prepaid expenses

(46)

(433)

Other

(77)

48

(9,684)(12,914)

Net increase (decrease) in short-term loans payable(19,485)(15,756)

Repayments of long-term loans payable(1,277)(930)

Cash dividends paid

(11,320)(12,360)

Interest expenses paid

Cash flows from investing activities

Purchase of property, plant and equipment
Payments for retirement of property, plant and equipment
Payments for acquisition of businessNet decrease (increase) in short-term loans receivable

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

Dividends paid to non-controlling interests
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 equivalents
Net increase (decrease) in cash and cash equivalents

(167)

(111)

(5,004)(9,076)-(1,724)(0)-(37,255)(39,960)

(97)

(177)

(14,603)(18,193)

Cash and cash equivalents at beginning of period

37,702

36,183

Cash and cash equivalents at end of period

23,09917,9899

(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.
In addition, the Company canceled 1,000,000 treasury shares on August 30, 2019 based on the resolution of Board of Directors' meeting held on
August 20, 2019. As a result, retained earnings and treasury shares decreased by 9,932 million yen during the third quarter ofcurrent consolidated fiscal year.
Also, the Company repurchased 1,269,600 treasury shares based on the resolution of Board of Directors' meeting held on May 15, 2019.
In addition, the Company repurchased 496,000 treasury shares based on the resolution of Board of Directors' meetiong geld on November 8, 2019.
As a result, treasury shares increased by 8,275 million yen during the third quarter of current consolidated fiscal year. In addition, the Company
repurchased 166,200 treasury shares based on the trust agreement of the Board Benefit Trust (BBT) resolved by the Board of Director's
meeting on July 30, 2019. As a result, treasury shares increased by 799 million yen during the third quarter of current consolidated fiscal year.
(Segment Information)
1. For the Nine Months Ended December 31, 2018 (From April 1, 2018 to December 31, 2018)
1) Information Regarding Sales, Income (Loss) of Reportable Segments
Chemicals

Performance
Materials

Agricultural
Chemicals(Million yen)Pharmaceuticals

Trading

Others

Total

Adjustment(1)

Consolidated
Total

Sales
Sales to outside customers

19,32143,09031,372

5,535

36,482

6,070

141,872䠉Intersegment Sales

7,299

5,554

3,276

15

15,043

11,606

42,795(42,795)

㻙Total Sales

26,621

48,64434,6495,551

51,525

17,676

184,668(42,795)

141,872

Segment Income or Loss
(Operating Income or Loss)

2,242

12,448

8,527

1,011

1,709

449

26,389(2,568)23,821

141,872

Notes: (1) The (2,568) million yen adjustment in segment income includes (426) million yen in intersegment eliminations and (2,141) million yen
corporate expenses not attr butable to any reportable segment. The corporate expenses are mainly group administrative expenses
which do not belong to any segment.
2) Information on impairment loss, goodwill, etc. on non-current assets by reportable segment(Major change in goodwill)
Not applicable.
2. For the Nine Months Ended December 31, 2019 (From April 1, 2019 to December 31, 2019)1) Information Regarding Sales, Income (Loss) of Reportable Segments
Chemicals

Performance
Materials

Agricultural
Chemicals

42,93030,022(Million yen)Pharmaceuticals

Trading

Others

Total

Adjustment(1)

Consolidated
Total

Sales
Sales to outside customers
Intersegment Sales
Total Sales
Segment Income or Loss
(Operating Income or Loss)

18,401

4,940

35,736

6,005

138,035

6

138,042

7,095

5,464

3,420

20

15,0458,926

39,973(39,973)㻙

25,497

48,39433,443

4,960

50,781

14,931

178,008(39,966)

138,042897

13,072

7,535

553

1,634

158

23,852(2,412)

21,440Notes: (1) The (2,412) million yen adjustment in segment income includes (226) million yen in intersegment eliminations, 6 million yen sales
not attributable to any reporting segment, and (2,192) 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) Information on impairment loss, goodwill, etc. on non-current assets by reportable segment(Major change in goodwill)
With the acquisition of the Quinoxyfen Fungicide Product Line from Corteva, Inc. in the Agricultural Chemicals segment, goodwill increased by
6,335 million yen. This is a tentative amount, since we could not identify the identifiable assets and liabilities, estimate the fair value,and complete the allocation of acquisition cost at the date of the acquisition.

10