Consolidated Financial Results for the Nine Months Ended December 31, 2016
(JPGAAP)
February 3, 2017
Stock Exchange: Tokyo
Name of listed company: NISSAN CHEMICAL INDUSTRIES, LTD.
URL: http://www.nissanchem.co.jp/
Code Number: 4021
Representative: Kojiro Kinoshita, President
Inquiry to: Hironori Yoshida, Executive Officer and Director of Finance and Accounting Department Tel. +81 3 3296 8356
Scheduled submission date of quarterly report: February 10, 2017
Scheduled dividend payment date: ―Supplemental information: Yes
Financial results meeting : None
(Amounts rounded down to the nearest million yen)

1. Consolidated Financial Results for the Nine M onths Ended December 31, 2016 (From April 1, 2016 to December 31, 2016)(% indicates the rate of increase/decrease against the same period of the previous year)(1) Consolidated Operating Results

Operating
IncomeNet Sales% Millions of Yen

Millions of Yen

Nine Months Ended December 31, 2016
Nine Months Ended December 31, 2015
(Note) Comprehensive Income:Ordinary
IncomeNet Income Attributableto Owners of Parent% Millions of Yen%

Millions of Yen%

19,312(5.2)

14,236(4.1)

20,36317.2

14,84925.6

122,069(1.1)

18,700(2.7)

123,402

4.8

19,21219.0

Nine Months Ended December 31, 2016

: 13,705 million yen , (20.1)%

Nine Months Ended December 31, 2015

: 17,142 million yen , 14.2%

Diluted Profit
Attributable to
Owners of Parent
per Share

Net Income
per Share
Yen

Yen

Nine Months Ended December 31, 2016

92.86

－

Nine Months Ended December 31, 2015

95.06

－

(2) Consolidated Financial Position
Total Assets

Equity Ratio

Millions of Yen

Millions of Yen%

213,418

157,64073.1

156,924

68.1

As of December 31, 2016

228,169

As of March 31, 2016
(Reference) Shareholders' equity:

Net Assets

As of December 31, 2016

: 156,032 million yen

As of March 31, 2016

: 155,392 million yen

2. Cash Dividends
Cash Dividends per Share
First
Quarter

SecondQuarterYen

Third
Quarter

Yen

Year-end

Yen

Year Ended March 31, 2016

－

18.00

－

Year Ending March 31, 2017

－

24.00

－

Year Ending March 31, 2017
(Forecast)

Annual

Yen

Yen

26.00

44.00

26.00

50.00

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

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending M arch 31, 2017 (From April 1, 2016 to M arch 31, 2017)(% indicates the rate of increase/decrease against the same period of the previous year)
Operating
IncomeNet Sales
Millions of Yen

Year Ending March 31, 2017180,500% Millions of Yen

2.0

29,900Ordinary
IncomeNet Income Attributableto Owners of Parent

Net Income
per share% Millions of Yen%

Millions of Yen%

Yen

29,7000.6

22,5000.7

146.93

4.5(Note) Revision of the latest released forecast of financial results: None
The avobe net income per share is recalculated using the average number of share outstanding.
(The impact of the repurchase of own shares described in "Notice Regarding Repurchase of the Company’s Own Shares " announced today is considered.)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: Yes

2. Changes of accounting policies other than the above: None3. Changes in accounting estimates: None4. Restatements: None(Note) Please refer to "Items concerning Summary Information" on page 5 for details.
(4) Number of shares outstanding (common shares)
1. Number of shares outstanding (including treasury shares)
as of December 31, 2016

: 154,000,000 shares

as of March 31, 2016

: 156,000,000 shares

2. Number of shares of treasury shares
as of December 31, 2016

: 1,204,938 shares

as of March 31, 2016

: 1,620,587 shares

3. Average number of shares outstanding
as of December 31, 2016

: 153,315,546 shares

as of December 31, 2015

: 156,207,416 shares* Presentation regarding implementation status of quarterly review proceduresThis financial release is not subject to quarterly review procedures based on Financial Instruments and Exchange Law in Japan.
Quarterly review procedures of financial statements based on Financial Instruments and Exchange have not been completed
at the time of disclosure.
* 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.

Table of Contents for Attached Materials
1. Qualitative Information on Quarterly Results(1) Business Performance........................................................................................................ 2.............................................................................................................................. 2(2) Financial Position ..................................................................................................................................... 3(3) Forecast of Consolidated Business Results and Other Forward-looking Information.................................................. 4(4) Basic Policy on Distribution of Earnings .......................................................................................................... 4
2. Items concerning Summary Information (Notes) ............................................................................................................ 5(1) Changes of Accounting Policies and Accounting Estimates, Restatement ............................................................... 5
3. Consolidated Financial Statements................................................................................................................... 6(1) Consolidated Balance Sheets ...................................................................................................................... 6(2) Consolidated Statements of Income and Statements of Comprehensive Income(3) Consolidated Statements of Cash Flows...................................................... 8.......................................................................................................10(4) Notes to Consolidated Financial Statements..................................................................................................11(Notes on Assumption of Going Concern).................................................................................................11(Notes on Significant Changes in Shareholders' Equity) ................................................................................11(Segment Information).........................................................................................................................11(Significant Subsequent Events) ...................................................................................................................... 12-1-

1. Qualitative Information on Quarterly Results(1) Business Performance
During the year ended December 31, 2016 (from April 1, 2016 to December 31, 2016), the domestic economy
has been slowly recovering due to various factors including improvement of income environment andemployment situation, weaker yen and higher stock price after president election in USA. By contrast, the world
economy has remained uncertain.
In our group business, the sales of Chemicals Segment decreased in both Basic Chemicals and Fine
Chemicals. In the Performance Materials Segment, the sales of Display Materials increased but Semiconductor
Materials and Inorganic Materials had weak sales. In the Agricultural Chemicals Segment, Fluralaner (an active
ingredient of veterinary pharmaceutical) had healthy sales. In the Pharmaceutical Segment, the domestic salesof “LIVALO” (anti-cholesterol drug) decreased due to expansion of generic products.
As a result of previously mentioned factors, the sales for this period were 122,069 million yen (a decrease of
1,333 million yen from the same period of the previous year). Operating income was 18,700 million yen (adecrease of 511 million yen). Ordinary income was 19,312 million yen (a decrease of 1,050 million yen). Income
attributable to owners of parent was 14,236 million yen (a decrease of 612 million yen).
On the other hand, the sales and each income to the third quarter were above our third quarter outlook(undisclosed).
Explanations by segments are as below.
Chemicals
The profitability of ammonia product increased due to the price decline of feedstock. In the Basic Chemicals,
the export sales of MELAMINE (adhesive agent for particle board) and the sales of “AdBlue” (high-grade urea
solution) increased, while the shipment of urea and liquid ammonia decreased. In the Fine Chemicals, the salesof “TEPIC” (special epoxy compound for sealant) decreased due to stronger yen.
As a result of these factors, the sales of this segment were 25,569 million yen (a decrease of 166 million yen
from the same period of the previous year). Operating income was 2,605 million yen (an increase of 51 millionyen).
On the other hand, the sales and the operating income were above our third quarter outlook (undisclosed).
Performance Materials
In the Display Materials, “SUNEVER” (polyimide for LCD / flat panel displays) for smartphone had healthy
sales. In the Semiconductor Materials, bottom anti-reflective coating for semiconductors (“ARC®”) andmulti-layer process materials (“OptiStack®”) were adversely affected by the lower capacity utilization ratio ofsome customers. In the Inorganic Materials, “SNOWTEX” (semiconductor polishing, hard coating, etc.) for
polishing agents for electronic substrate materials decreased the sales.
As a result of these factors, the sales of this segment were 39,327 million yen (a decrease of 236million yen).
Operating income was 9,966 million yen (an increase of 48 million yen).
On the other hand, the sales and the operating income were above our third quarter outlook (undisclosed).
*ARC® and OptiStack® are registered trade mark of Brewer Science, Inc.

Agricultural Chemicals“ROUNDUP MAXLOAD AL”, herbicide for general household, expanded in Japan but our product had weaksales as a whole. Conversely, Fluralaner had healthy sales.
As a result of these factors, the sales of this segment were 28,240 million yen (an increase of 2,113 millionyen). Operating income was 4,850 million yen (a decrease of 69 million yen).
On the other hand, the sales and the operating income were above our third quarter outlook (undisclosed).

-2-

Pharmaceuticals
The shipment of “LIVALO” decreased in Japan due to expansion of generic products but increased inoverseas especially for Asia. Also, while we acquired incidental income for the license contract of new medicine
during the same period of the previous year, we didn’t have such an income during this period.
As a result of these factors, the sales of this segment were 6,122 million yen (a decrease of 1,086 million yen).
Operating income was 1,380 million yen (a decrease of 785 million yen).
On the other hand, the sales and the operating income were above our third quarter outlook (undisclosed).
Trading
The sales of this segment were 41,317 million yen (a decrease of 1,056 million yen). Operating income was
1,281 million yen (a decrease of 117 million yen) and they were below our third quarter outlook (undisclosed).
Others
The sales of this segment were 14,443 million yen (an increase of 805 million yen). Operating income was 181
million yen (an increase of 143 million yen) and they were above our third quarter outlook (undisclosed).
(2) Financial Position(Position of Assets, Liabilities and Net Assets)
Total assets as of December 31, 2016 were 213,418 million yen (a decrease of 14,750 million yen from March
31, 2016). It is mainly due to the decrease of notes and accounts receivable - trade.
Also, total liabilities as of December 31, 2016 were 55,777 million yen (a decrease of 15,467 million yen). It ismainly due to the decrease of short - term loans payable.
Net assets as of December 31, 2016 were 157,640 million yen (an increase of 716 million yen).
As a result of these factors, equity ratio was 73.1% (an increase of 5.0% from March 31, 2016).
(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, 2016 were 30,536 million yen (30,727 million yen for the same period of the previous year).
Due to the proceeds from sales of investment securities and the investment on plant and equipment, net cashused in investing activities for the nine months ended December 31, 2016 were 7,835 million yen (6,423 million
yen).
Due to the decrease in short-term loans payable, payment for dividends, and share repurchase, net cash usedin financing activities for the nine months ended December 31, 2016 were 30,145 million yen (29,621 million
yen).
As a result of these factors, cash and cash equivalents at the end of this period were 28,010 million yen(25,969 million yen), reflecting 143 million yen effect of exchange rate changes and 25 million yen decrease in
cash and cash equivalents resulting from exclusion of subsidiaries from consolidation. It decreased by 7,325
million yen from March 31, 2016.

-3-

(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, 2017from the statement announced on November 4, 2016.
Although the sales and each income decreased from the same period of previous year, they steadily madeprogress toward our forecast of consolidated financial results.
Also, the sales of pesticide for domestic market, main products of Agricultural Chemicals, tend to beconcentrated on the fourth quarter due to seasonality.
(4) Basic policy on distribution of earnings

The Company’s basic policy of profit allocation is returning to shareholders by improving company value
through increasing revenue in the medium and long terms.
We aim to realize dividend payout ratio to be 40% in FY2018 and maintain total payout ratio to be 70% in
medium-term business plan “Vista2021” launched from April 2016.

-4-

2. Items concerning Summary Information (Notes)(1) Changes of Accounting Policies and Accounting Estimates, Restatement(Changes in Accounting Policies)

Effective from the beginning of the first quarter of current consolidated fiscal year, the Company
adopted the “Practical Solution on a change in depreciation method due to Tax Reform 2016” (Practical
Issue Task Force (PITF) No.32, issued on June 17, 2016) in accordance with the revision of the
Corporation Tax Law of Japan. Accordingly, the Company changed the depreciation method for facilities
attached to buildings and structures acquired on and after April 1, 2016 from the declining-balance method
to the straight-line method.
The impact of this change on operating income, ordinary income, and income before income taxes andnon-controlling interests for the third quarter of current consolidated fiscal year was immaterial.

-5-3. Consolidated Financial Statements(1) Consolidated Balance Sheets
Millions of Yen
As ofMarch 31, 2016

As ofDecember 31, 2016

AssetsCurrent assets
Cash and deposits

35,33528,010Notes and accounts receivable - trade57,60644,851

Merchandise and finished goods

30,19832,59543

999

Raw materials and supplies

8,266

8,407

Other

10,765

7,982

(34)

(36)

142,181

122,811

Buildings and structures, net

22,63522,344

Other, net

24,826

29,601

Total Property, plant and equipment

47,461

51,945W ork in process

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

Intangible assets
Goodwill

2

0

Other

901

1,564

Total Intangible assets

903

1,565

Investment securities

33,251

31,693

Other

4,539

5,570

Allowance for doubtful accounts

(167)

(167)

Total Investments and other assets

37,62337,09685,98890,607228,169

213,418

Investments and other assets

Total non-current assets
Total assets-6-Millions of Yen
As ofMarch 31, 2016

As ofDecember 31, 2016

Liabilities
Current liabilities
Notes and accounts payable - trade

15,35019,108

Short-term loans payable

25,998

10,154

Income taxes payable

4,576

379

Provision for bonuses

1,874

601

Provision for directors' bonuses

21

23

Provision for environmental measures

350

91

Other

9,765

14,002

Total current liabilities

57,93744,360

7,100

5,620

Provision for business structure improvement

680

667

Provision for loss on business of subsidiaries and associates

309

309

Net defined benefit liability

102

104

Other

5,115

4,716

Total non-current liabilities

13,307

11,416

71,24455,777

Capital stock

18,942

18,942

Capital surplus

13,611

13,611Retained earnings

115,878

116,581

Non-current liabilities
Long-term loans payable

Total liabilities
Net assets
Shareholders' equity

Treasury shares(4,281)(3,586)

Total Shareholders' equity

144,151

145,548

10,515

9,981

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment

1712

Remeasurements of defined benefit plans

554

498

11,241

10,483

1,531

1,608

156,924

157,640

228,169

213,418

Total Accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets-7-

(2) Consolidated Statements of Income / Consolidated Statements of Comprehensive Income- Consolidated Statements of Income
Millions of Yen
Nine Months Ended
December 31, 2015

Nine Months Ended
December 31, 2016

Net sales

123,402122,069

Cost of sales

73,55572,187Gross profit

49,84649,881

Selling, general and administrative expenses

30,634

31,181

Operating income

19,212

18,700Non-operating income
Interest income

1013Dividend income

483

538

Other

1,576

1,020

Total non-operationg income

2,069

1,573

Interest expenses

150

121

Loss on disposal of non-current assets

205

333

Plant stop losses

185

192

Other

377

314

Total non- operating expenses

919

961

Non-operating expenses

Ordinary income

20,363

19,312Extraordinary income--

Extraordinary losses--

Income before income taxes and non-controlling interests

20,363

19,312

Income taxes - current

4,888

4,137

Income taxes - deferred

476

795

Total income taxes

5,364

4,932

Net income

14,99814,379149

142

14,84914,236

Net income attributable to non-controlling interests
Net income attributable to owners of parent-8-

- Consolidated Statements of Comprehensive Income
Millions of Yen
Nine Months Ended
December 31, 2015
Net income

Nine Months Ended
December 31, 2016

14,99814,379Valuation difference on available-for-sale securities

2,507

(534)

Foreign currency translation adjustment

(300)

(85)

Remeasurements of defined benefit plans, net of tax

(62)

(55)

Share of other comprehensive income of entities accounted
for using equity method

(0)

1

2,143

(674)

17,142

13,705

17,036

13,575106

129

Other comprehensive income

Total other comprehensive income
Comprehensive income(Comprehensive income attributable to)
Owners of parent
Non-controlling interests-9-(3) Consolidated Statements of Cash Flows

Millions of Yen
Nine Months Ended
December 31, 2015

Nine Months Ended
December 31, 2016

Cash flows from operating activities
Income before income taxes and non-controlling interests

20,363

19,312

Depreciation

6,911

6,183

Interest and dividend income

(493)

(552)

Interest expenses

150

121

Loss (gain) on disposal of non-current assets

205

333

Decrease (increase) in notes and accounts receivable - trade

14,881

12,548Decrease (increase) in inventories(8,397)(3,549)

4,083

3,884

Increase (decrease) in notes and accounts payable - trade
Other, net

(602)

(555)

Subtotal

37,102

37,726

900

1,576

(124)

(101)

Income taxes paid

(7,152)(8,664)

Net cash provided by (used in) operating activities

30,72730,536

Interest and dividend income received
Interest expenses paid

Cash flows from investing activities
Purchase of investment securities

(328)

(308)

113

2,988

(5,620)(8,225)

Payments for retirement of property, plant and equipment

(121)

(249)

Purchase of intangible assets

(120)

(992)

11

326

(839)

(824)

Proceeds from sales of investment securities
Purchase of property, plant and equipment

Net decrease (increase) in short-term loans receivable
Purchase of long-term prepaid expenses
Other, net

480

(549)

(6,423)(7,835)

Net increase (decrease) in short-term loans payable(15,871)(15,916)

Repayments of long-term loans payable(1,370)(1,480)Cash dividends paid

(6,269)(7,680)

(70)

(52)

(6,001)(5,001)

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

Dividends paid to non-controlling interests
Share repurchase
Other, net

(38)

(13)

(29,621)(30,145)

(116)

143

Net increase (decrease) in cash and cash equivalents(5,434)(7,300)Cash and cash equivalents at the beginning of period

31,34335,335

Increase in cash and cash equivalents from newly consolidated
subsidiary

61-

Decrease in cash and cash equivalents resulting from exclusion ofsubsidiaries from consolidation

-

(25)

25,96928,010Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

Cash and cash equivalents at the end of period- 10 -

(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, 2016 based on the resolution of Board of Directors' meeting held on April 25, 2016.
In addition, the Company canceled 1,000,000 treasury shares on August 31, 2016 based on the resolution of Board of Directors' meeting held on
August 23, 2016. As a result, retained earnings and treasury shares decreased by 5,695 million yen during the third 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 12, 2016. As a result, treasury
shares increased by 4,999 million yen during the third quarter of current consolidated fiscal year.

Segment Information
1. Information Regarding Sales, Income (Loss) of Reportable Segments
1) For the Nine Months Ended December 31, 2015 (From April 1, 2015 to December 31, 2015)
Chemicals

Performance Agricultural
Materials
Chemicals

Pharmaceuticals

Trading(Millions of Yen)
Others

Total

Adjustment(1)

Consolidated
total

123,402

Sales
Sales to outside customers

18,80235,025

23,1137,208

33,1006,152

123,402-

Intersegment Sales

6,933

4,539

3,013

-

9,273

7,486

31,245(31,245)-

Total Sales

25,736

39,564

26,126

7,208

42,374

13,638

154,648(31,245)

123,402

Segment income or loss
(Operating Income or Loss)

2,554

9,917

4,920

2,165

1,398

37

20,994(1,782)

19,212

Notes: (1) The (1,782) million yen adjustment in segment income includes (261) million yen in intersegment eliminations and (1,520)

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 Nine Months Ended December 31, 2016 (From April 1, 2016 to December 31, 2016)
Chemicals

Performance Agricultural
Materials
Chemicals

Pharmaceuticals

Trading(Millions of Yen)
Others

Total

Adjustment(1)

Consolidated
total

Sales
Sales to outside customers

18,72434,64525,125

6,095

31,761

5,701

122,05414

122,069

Intersegment Sales

6,844

4,682

3,114

26

9,556

8,741

32,966(32,966)-

Total Sales

25,56939,32728,2406,122

41,317

14,443155,021(32,951)

122,069

Segment income or loss
(Operating Income or Loss)

2,605

9,966

4,850

1,380

1,281

181

20,265(1,564)18,700Notes: (1) The (1,564) million yen adjustment in segment income includes (240) million yen in intersegment eliminations, 14 million yen sales
not attributable to any reporting segment, and (1,338) million yen corporate expenses not attributable to any reportablesegment. The corporate expenses are mainly group administrative expenses which do not belong to any segment.

- 11 -

(Significant Subsequent Events)
The Company, at the board of Director's meeting held on February 3, 2017, has decided to repurchase its shares in the market
under Article 156 of the Japanese Corporation Act, as applied pursuant to Article 165, Paragraph 3 of the same Act.
1. Purpose of repurchaseTo facilitate flexible implementation of capital policy in response to changes in the business environment.
2. Details of repurchase(1) Class of shares: Common shares of the company(2) Total number of shares: Up to 1,100,000 shares(Rate of the maximum shares to be acquired to the total outstanding shares: 0.72%)(3) Total amount: Up to 4,000,000,000 yen(4) Period of repurchase: From February 6, 2017 to April 28, 2017(For reference) Number of treasury shares as of December 31, 2016
Total number of shares issued(excluding treasury shares)
Number of treasury shares: 152,795,062 shares:

1,204,938 shares- 12 -