FY2023
Financial Briefing
NAGASE&CO.,LTD.
Stock exchange listing : Tokyo (Prime Market)
Code number : 8012

May 24, 2024

Copyright © 2024 Nagase & Co., Ltd.

Executive Summary

The Prinova Group reported lower earnings due to lower food ingredient market prices and prior costs at the Utah plant
The color former business reported an operating loss, mainly due to declines in demand and market conditions

FY2023Results

Resin sales declined due to declines in global demand and market conditions
Sales were strong for Nagase ChemteX-formulated epoxy resin used in high-end server applications
Nagase Viita (former Hayashibara) passed on the prices of utilities and other costs and posted increased sales offunctional materials for cosmetics and foods

We expect to improve profitability through ROIC management and increase gross profit margin from 18.3% to 19.1%.

FY2024
Earnings
Projections

We also expect to post a record-high operating profit.
We will reallocate resources among regions in our trading function. We will invest resources in regions with highgrowth potential.
We expect to produce results in the semiconductor manufacturing process of the chemical recovery and recycling
business, as well as expand business for power semiconductors.

Medium-Term
Management
Plan ACE 2.0

・Steady implementation of QUICK WIN
・Decision to change Shareholder Returns policy (100% total return ratio in FY2024, FY2025)

Copyright © 2024 Nagase & Co., Ltd.

2

Business Environment by Segment
Industry

FY2023 Trends

FY2024 Trends

Coatings

Gradual recovery in automotive
applications, but sluggish constructionrelated applications

Automotive applications to remain strong,but generally flat overall

Color
Formers

Demand remained weak and market
conditions declined further

Oversupply to continue while market
conditions remain sluggish

Sluggish shipments of smartphones, etc.,
throughout the fiscal year

Smartphones Sluggish shipments throughout the year

Demand to recover year on year

Electronics &EnergyExpected growth year on year

OA andGames

Resin market conditions declined due tosluggish global demand

Overall demand and resin market
conditions to make a moderate recovery

Automobiles

The Japanese automotive-related industry in China wassluggish, while sales in Japan were steady due to arecovery in the semiconductor shortage

Moderate recovery in automobile
production to continue

Sluggish overall industry performance

Demand to increase while sales of raw materials
decrease due to patent expiration of brand-name drugs,
etc.

Cosmetics

Demand increased due to the end of the
COVID-19 pandemic

Overall demand to continue to recover

Food

Demand began recovering in the second half of the year,
despite lower demand in the U.S. market and weakmarket conditions

Demand in the U.S. market to continue torecover

Medical

Functional
Materials

Moderate recovery, full-scale recovery in the second
half of the fiscal year, with sales of high-end
applications to continue strong

Semiconduct High-end applications performed well
despite slow market recovery
ors
Display

Segment

Advanced
Materials& Processing
MobilityLife & Healthcare*Based on the business environment of the Nagase Group, excluding one-time losses, etc. (Forecasts may not be consistent with general industry trends)

Copyright © 2024 Nagase & Co., Ltd.

3

Contents■ FY2023 Results and FY2024 Earnings Projectionｓ

P5～P22■ Medium-Term Management Plan ACE 2.0

P23～P36■ Appendix：Evaluations and Transition from External Organizations

Copyright © 2024 Nagase & Co., Ltd.

FY2023 Results and
FY2024 Earnings Projections

Copyright © 2024 Nagase & Co., Ltd.

Consolidated statements income▶ Gross profit increased due to strong performance of high-profit manufacturing subsidiaries; however, operating income
decreased due to increases in personnel expenses and other selling, general and administrative expenses▶ Net income decreased with the decrease in ordinary income, despite decreases in loss on securities and impairment loss.
▶ Overall performance was in line with the full-year forecast

100 millions of yen

FY2022

FY2023

ChangeVs.PY

Forecast

Forecast
Comparison

Sales

9,128

9,001

(127)

99%

9,000

100%

Gross profit

1,554

1,647

93

106%

1,630

101%

<GP ratio>

17.0%

18.3%

1.3ppt

－

18.1%

－

SG&A expenses

1,220

1,341

120

110%

1,330

－

Operating income

333

306

(27)

92%

300

102%

Ordinary income

325

305

(19)

94%

290

105%

236

224

(12)

95%

225

100%

@ 135.5@ 144.6@ 9.1 Weak yen@ 143.0@ 19.7@ 20.1@ 0.4 Weak yen@ 20.0

Profit Attributableto owners of theparentUS$ Exchange rate
(period average)
RMB Exchange rate
(period average)※ Offset to sales and cost of sales from revenue recognition standards: FY2022 -¥268.9 billion, FY2023 -¥272.3 billion※ Impact from foreign exchange: Gross profit, +¥5 billion; Operating income, +¥0.9 billion

Copyright © 2024 Nagase & Co., Ltd.

6

Gross Profit By Region▶ Higher profit both domestic and overseas▶ Increase in domestic business sales, mainly due to higher sales of cosmetic materials and formulated epoxy resins▶ Overseas profit increased due to the impact of the weaker yen and strong performance in the food ingredient business in
EuropeOverseas gross profit By Region(100 millions of yen)Domestic & Overseas Gross profit(100 millions of yen)100%

Total 1,647
1,600

1,400

1,200

Total 1,554
Overseas833
Overseasgross profit
ratio
53.7%

Overseas896

Total 83390%800Europe
112

80%

Other
15

Other
15

Europe154

700
Overseasgross profit
ratio
54.4%

70%
600
60%
500

1,000

Americas331

Americas
343

50%

800

40%

600

400

Total 896

900

1,800

30%
Domestic
720

Domestic
750

200

0
FY2022

FY2023

20%

400
ASEAN
149

ASEAN
152

Greater
China
225

Greater
China
231

FY2022

FY2023

300

200

10%

100

0%

0

※Domestic figures under Domestic & Overseas Gross Profit include inter-regional adjustments
Copyright © 2024 Nagase & Co., Ltd.

7

Gross Profit By Business & Segment▶ Functional Materials saw a decline in sales of coating materials and raw materials for semiconductor-related and other materials
for the electronics industry, as well as weakening profitability in the digital print processing materials manufacturing business▶ Advanced Materials & Processing posted lower sales due to decreased demand for resin sales in the office equipment,
appliance, and video game device market, as well as the impact of inventory adjustments by customers▶ Overall profits in Electronics & Energy increased due to increased sales of raw materials for semiconductor-related products
and formulated epoxy resins for semiconductor- and mobile device products▶ In Life & Healthcare, sales of food ingredients, cosmetic ingredients, and pharmaceutical raw materials increased
Change in Gross Profit By Segment (100 millions of yen)

Gross Profit By Business & Segment (100 millions of yen)
Total 1,647
Total 1,554

Total 1,647

Life &
Healthcare
75

Total 1,554

1,500

1,200

Manufacturing
618

Manufacturing692

900Life &
Healthcare
559

Life &
Healthcare634

Corporate& Others(0)Electronics
Mobility& Energy
8
34

1,554

Functional
Advanced
Materials
Materials(17)& Processing(6)

Mobility
144

Mobility
152

Electronics &Energy307

Electronics &Energy342

Advanced
Materials& Processing
242

Advanced
Materials& Processing
236

Functional
Materials
298

Functional
Materials
281

200

0

FY2022600
Trading936

Trading
954

300

1,647

FY2023

History of Gross Profit(100 millions of yen)
500
399
400

387

394

401

390

432

425
369

300

100

0
By Business

By Business

By Segment

By Segment

FY2022

FY2023

FY2022

FY2023

1Q

２Q
FY2022

Copyright © 2024 Nagase & Co., Ltd.

3Q
FY2023

4Q

8

Operating Income by Business & Segment▶ Functional Materials and Advanced Materials & Processing posted lower operating income due to a decrease in gross profit▶ Electronics & Energy posted higher operating income with increased gross profit▶ Life & Healthcare recorded higher gross profit; however, weaker profitability at the Prinova Group, increased personnel expense,
other selling, general and administrative expenses, and a delay in the profit contribution of the Utah plant caused adecrease in operating income▶ Corporate & Others reflected higher expenses, mainly due to the beginning of amortization for intangible assets (enterprisesystem and DX investments), an increase in amortization expenses for accounting-based retirement benefit actuarial
differences, and other factors
Operating Income by Business & Segment(100 millions of yen)

Total 333

Total 306

Life &
Healthcare
105

Life &
Healthcare
103

Mobility
47

Mobility49

Change in Operating Income By Segment (100 millions of yen)Life &
Electronics& Energy Mobility Healthcare
(2)
1
20

333

420
360
300

Total 333
Manufacturing
91

240

Manufacturing
88

180
120

Trading241

Trading217

Electronics &Energy92
Advanced
Materials& Processing
76
Functional
Materials
104

60

Advanced
Materials& Processing
68
Functional
Materials
86306
Corporate& Others(19)

Advanced
Materials& Processing(8)

Electronics &Energy113

0

FY2022

FY2023

History of Operating Income(100 millions of yen)
120

108
90

100
80

69

85
75

75

75
59

Corporate&Others
(94)

(60)
(120)

Functional
Materials(18)

Total 306

By Business
FY2022By Business
FY2023

By Segment
FY2022

Corporate&Others(113)
By Segment
FY202360
40
20
0Copyright © 2024 Nagase & Co., Ltd.

１Q

２Q
FY2022

３Q
FY2023４Q

9

Functional Materials Segment Operating Income Overview▶ Overall sales of coating materials decreased due to sluggish sales for mainly architectural applications, despite a recovery inapplications for the automobile and other industries▶ Sales decreased for raw materials for the electronics industry, including semiconductor-related products▶ The manufacturing business related to digital print processing materials posted lower sales and a decline in profitability,
resulting in an operating loss
▶ Profits decreased due to customer inventory adjustments, mainly in the first half, and weak profitability in the manufacturingbusiness
History of operating income （100 millions of yen）

Operating income by business（100 millions of yen）

26

26

26

25

Total 104
Manufacturing9

Total 86

24

24

21

15

Trading95

Trading95

Manufacturing(9)１Q
FY2022

FY2023２Q
FY2022

Copyright © 2024 Nagase & Co., Ltd.

３Q

４Q

FY202310

Advanced Materials & Processing Segment Operating Income Overview▶ Lower profit due to decreased demand for resin sales in the office equipment, appliance, and video game device market, as wellas the impact of inventory adjustments by customers▶ The manufacturing business returned to profit overall due to strong sales of resin mold products, as well as a decrease in
expenses compared to the previous year, when we recorded impairment losses for certain subsidiaries▶ Overall, the sluggish sale of resins had significant effects and profit decreased

History of operating income （100 millions of yen）

Operating income by business（100 millions of yen）

Total 76

Total 68

Manufacturing
8

22

22
20
19

19

15
13

Trading80

12
Trading
59

Manufacturing(4)
１Q
FY2022

FY2023２Q
FY2022

Copyright © 2024 Nagase & Co., Ltd.

３Q

４Q

FY202311

Ｅｌｅｃｔｒｏｎｉｃｓ & Energy Segment Operating Income Overview▶ Despite weakening semiconductor market conditions, sales of materials to the semiconductor industry increased due to growth
in product sales▶ Sales of formulated epoxy resins increased mainly for high-end server applications and mobile device applications▶ Profit rose overall with strong sales of formulated epoxy resins

History of operating income （100 millions of yen）

Operating income by business（100 millions of yen）

Total 113
31

Total 92

Manufacturing
34

31

30
27

26

25

Manufacturing
20

23
21
19

20

Trading72

Trading79

100
FY2022

FY2023

１Q

２Q
FY2022

Copyright © 2024 Nagase & Co., Ltd.

３Q

４Q

FY2023

12

Mobility Segment Operating Income Overview▶ Sales increased for resins, mainly due to an increase in automobile production and expanded market share to existingcustomers▶ Sales increased in functional materials and functional components for interior and exterior fittings and electrification▶ Higher profit due to increased gross profit

History of operating income （100 millions of yen）

Operating income by business（100 millions of yen）

15
14
Total 49

13

Total 4713

10
9

Trading
47

FY202299

Trading
49

FY2023

１Q

２Q
FY2022

Copyright © 2024 Nagase & Co., Ltd.

３Q

４Q

FY202313

Life & Healthcare Segment Operating Income Overview▶ Overall Prinova Group sales increased mainly due to operations of the plant in Utah
▶ Nagase Viita (formerly Hayashibara) posted increased sales, mainly for cosmetic material▶ Although we recorded higher gross profit, profits decreased due to increased personnel and other general, andadministrative expenses at the Prinova Group, and a delay in the profit contribution of the Utah plant

History of operating income （100 millions of yen）

Operating income by business（100 millions of yen）

Total 105

41

Total 103
40

32
Manufacturing
67

Manufacturing
57

30
26

25

24
19

20

Trading38

Trading
45

20
18

10

0
FY2022

FY2023

１Q

２Q
FY2022

Copyright © 2024 Nagase & Co., Ltd.

３Q

４Q

FY202314

State of Major Manufacturing Subsidiaries▶ Nagase ChemteX : Despite the transfer of the biochemicals business to Nagase Viita, profit rose due to increased sales ofhighly profitable formulated epoxy resins▶ Nagase Viita : Profits increased due to progress made to pass on the soaring prices of raw materials and utilities, as well as
strong sales of cosmetic material stemming from a recovery in demand▶ Prinova Group : Despite increased sales in manufacturing, profit declined due to increased personnel and other general, andadministrative expenses and a delay in the profit contribution of the Utah plant

100 millions of yen
Forecast

Forecast
Comparison

99%

247

101%

7

111%

77

98%

30.1%

3.2ppt

-

31.1%

-

18

22

4

124%

24

91%

Sales

281

344

62

122%

347

99%

Gross profit

103

126

22

122%

128

98%

36.8%

36.7%

(0.1ppt)

-

37.0%

-

Operating income

37

52

14

137%

52

100%

Goodwill amortization etc.
Operating income after
amortization burden

30

30

-

100%

30

100%

7

21

14

298%

21

100%

1,927

1,934

7

100%

1,943

100%

Gross profit

312

358

45

115%

355

101%

<Profit ratio>

16.2%

18.5%

2.3ppt

-

18.3%

-

Operating income

80

60

(20)

75%

62

98%

Goodwill amortization etc.
Operating income after
amortization burden

24

25

1

107%

25

100%

56

34

(21)

62%

36

96%

Sales
Nagase ChemteX
Corporation

Gross profit<Profit ratio>
Operating income

Nagase Viita
Co., Ltd.
(Formerly
Hayashibara
Co.,Ltd.)<Profit ratio>

Sales

Prinova GroupFY2022

FY2023

Change

253

251

(2)

68

75

26.9%

Copyright © 2024 Nagase & Co., Ltd.

Vs.PY

15

Consolidated Balance Sheets▶ Inventory reductions progressed and working capital decreased▶ Net assets increased ¥22.9 billion compared with the end of the previous fiscal year due to internal reserves, valuationdifference on available-for-sale securities, and an increase in translation adjustments and accumulated other comprehensive
income

100 millions of yen
23/03

24/03

ChangeTotal Current Assets

5,301

5,424

123

(Cash&deposits)

408

594

185

3,021

3,211

190

(Trade account receivbable)(Inventories)

Details

1,697

1,479

(217)

2,325

2,498

173

697

762

64

Total assets

7,626

7,923

296

Current Liab.

2,862

3,026

Current portion of bonds＋100
164 Current portion of long-term loans＋58,
Short-term loans/CP -163

1,404

1,563

159

980

883

(97)

Total Liab.

3,843

3,910

67

Shareholders' equity

3,090

3,128

37

Accum. Other Comprehensive Income

586

812

Translation adjustments +144,
226 Net unrealized holding gain on securities +48,
Remeasurements of defined benefit plans ＋32

Non-controlling interest

107

72

(34)

3,783

4,013

229

Total non-current assets(Investments in security)(Trade account payable)
Non-current Liab.

Total net assets
Working capital

3,313

3,127

(186)

Shareholders' equity ratio

48.2%

49.7%

1.5ppt0.38

0.27(0.10)NET D/E ratio

Deferred tax liab.＋32, Lease liabilities +27,
Bonds -100、Long-term loans -51

Copyright © 2024 Nagase & Co., Ltd.

16

Consolidated Cash Flows▶ Operating CF : Net proceeds of ¥72.9 billion, mainly due to strong operating activities, as well as a decrease in working capital
stemming from inventory reductions▶ Investing CF : Net cash used of ¥11.6 billion, despite proceeds from sales of investment securities, etc., mainly due to thepurchase of property, plant and equipment▶ Financing CF : Net cash used of ¥48.0 billion, mainly due to a decrease in short-term loans and commercial paper, dividend
payments, and share buybacks

100 millions of yen
FY2022

FY2023Operating CF

94

729

Investing CF

(80)

(116)

13

613

(172)

(480)

30

55

(128)

188

149

166

Fixed asset investment

(173)

(188)

Increase / decrease in working capital

(200)

330

Free CF
Financing CF
Effects of exchange rate
Net increase / decrease in cash and cash
equivalents

Depreciation of tangible and intangible assets

Copyright © 2024 Nagase & Co., Ltd.

17

FY2024 Earnings Projection▶ We expect to increase manufacturing earnings in our semiconductor-related and food-related businesses▶ We expect trading business resin sales to recover, while the automobile-related business should also see firm performance▶ We expect selling, general and administrative expenses to increase overall with business growth, and other factors, even though
the amortization expense of retirement benefit actuarial differences will decrease(Retirement benefit actuarial differences: Approximately ¥0.9 billion expense in fiscal 2023 and approximately ¥3.5 billion
income in fiscal 2024)

100 milions of yen
FY202３Results

FY202４
Forecast

Change

Vs.PY

Sales

9,001

9,400

398

104%

Gross profit

1,647

1,800

152

109%

<GP ratio>

18.3%

19.1%

0.8ppt－SG&A expenses

1,341

1,435

93

107%

Operating income

306

365

58

119%

Ordinary income

305

352

46

115%

Profit attributable toowners of the parent

224

280

55

125%

US$ Exchange rate
(period average)@ 144.6@ 148.0@ 3.4

Weak yen

RMB Exchange rate
(period average)@ 20.1@ 20.0@ 0.1

Strong yen

Copyright © 2024 Nagase & Co., Ltd.

18

FY2024 Earnings Projection By segmentー Before Corporate & Others allocationー▶ Functional Materials recorded higher sales and profit, mainly due to increased automobile-related sales and lower losses in thedigital print processing materials-related manufacturing business▶ Advanced Materials & Processing sales and profit rose, mainly due to increased sales of resin for office equipment and video
game device applications in the electric and electronic industries▶ Electronics & Energy sales and profit increased, mainly due to increased sales of Nagase ChemteX formulated epoxy resin for
semiconductors used in high-end server applications▶ Mobility sales and profit increased due to higher sales of resins, functional materials, and functional components, stemmingfrom increased global production volume▶ Life & Healthcare sales and profit increased, mainly due to a recovery in Prinova Group food-ingredient profitability, which
recovered from a market low point, and increased food product and cosmetic material sales at Nagase Viita
100 milions of yen

Functional Materials

Advanced Materials& Processing

Electronics & Energy

MobilityLife & Healthcare

Corporate & Others

Total

Sales
Gross profit<Profit ratio>
Operating income
Sales
Gross profit<Profit ratio>
Operating income
Sales
Gross profit<Profit ratio>
Operating income
Sales
Gross profit<Profit ratio>
Operating income
Sales
Gross profit<Profit ratio>
Operating income
Sales
Gross profit
Operating income
Sales
Gross profit<Profit ratio>
Operating income

FY2023
Actual
1,468
281
19.2%
86
1,985
236
11.9%
68
1,447
342
23.6%
113
1,321
152
11.5%
49
2,777
634
22.8%
103
1
0
(113)
9,001
1,647
18.3%
306
Copyright © 2024 Nagase & Co., Ltd.

FY2024
Forecast
1,550
306
19.7%
105
2,072
248
12.0%
77
1,493
377
25.3%
124
1,387
160
11.5%
51
2,897
710
24.5%
125
1
(1)
(117)
9,400
1,800
19.1%
365

Change81
240.6ppt1886110.1ppt84534
1.6ppt106570.0ppt1
11975
1.7ppt
21
(0)
(1)
(3)
398
152
0.8ppt
58

Vs.PY
106%
109%
122%
104%
105%
113%
103%
110%
109%
105%
105%
103%
104%
112%
121%
68%
104%
109%
119%

19

FY2024 Earnings Projection By segmentー After Corporate & Others allocationー▶ In FY2024, the Company began allocating company-wide shared expenses, excluding a portion of Nagase non-consolidated
expenses, to business units under Corporate & Others▶ We are allocating company-wide shared expenses, shifting to a system that enables a more realistic understanding of the
profitability of each business unit

100 milions of yen

Functional Materials

Advanced Materials& Processing

Electronics & Energy

MobilityLife & Healthcare

Corporate & Others

Total

Sales
Gross profit<Profit ratio>
Operating income(After allocation)
Sales
Gross profit<Profit ratio>
Operating income(After allocation)
Sales
Gross profit<Profit ratio>
Operating income(After allocation)
Sales
Gross profit<Profit ratio>
Operating income(After allocation)
Sales
Gross profit<Profit ratio>
Operating income(After allocation)
Sales
Gross profit
Operating income(After allocation)
Sales
Gross profit<Profit ratio>
Operating income

FY2023
Actual
1,468
281
19.2%
61
1,985
236
11.9%
53
1,447
342
23.6%
88
1,321
152
11.5%
36
2,777
634
22.8%
80
1
0
(13)
9,001
1,647
18.3%
306

Copyright © 2024 Nagase & Co., Ltd.

FY2024
Forecast
1,550
306
19.7%
68
2,072
248
12.0%
55
1,493
377
25.3%
86
1,387
160
11.5%
32
2,897
710
24.5%
94
1
(1)
30
9,400
1,800
19.1%
365

Change81
240.6ppt686110.1ppt1
45
34
1.6ppt(2)6570.0ppt(4)
11975
1.7ppt
13
(0)
(1)
43
398
152
0.8ppt
58

Vs.PY
106%
109%
110%
104%
105%
104%
103%
110%
97%
105%
105%
89%
104%
112%
117%
68%
104%
109%
119%

20

FY2024 Earnings Projection By Major Manufacturing Subsidiaries▶ Nagase ChemteX : We expect higher sales and profit, mainly due to strong formulated epoxy resin-related sales forsemiconductors used in high-end servers▶ Nagase Viita : We expect higher sales and profit, mainly due to increased sales of food ingredients for the domestic market andhigher cosmetic material sales▶ Prinova Group : We expect an increase in sales and profit stemming from a recovery in profitability as the falling foodingredients market recovers from a bottom during the period and productivity at the Utah plant improves

100 millions of yen
FY2023
ActualNagase ChemteX
Corporation

Vs.PY

251

261

10

104%

Gross profit

75

80

4

106%

<Profit ratio>

30.1%

30.7%

0.5ppt

-

22

26

4

119%

344

369

25

107%

Sales

Prinova Group

ChangeSales

Operating income

Nagase Viita
Co., Ltd.

FY2024
Forecast

Gross profit

126

140

13

111%

<Profit ratio>

36.7%

37.9%

1.2ppt-Operating income

52

57

5

110%

Goodwill amortization etc.

30

29

(1)

97%

Operating income after
amortization burden

21

27

6

128%

1,934
358
18.5%
60

2,091
421
20.2%
81

156
63
1.6ppt
20

108%
118%
134%

Goodwill amortization etc.

25

27

1

105%

Operating income after
amortization burden

34

54

19

156%

Sales
Gross profit<Profit ratio>
Operating income

Copyright © 2024 Nagase & Co., Ltd.

21

Shareholder Returns▶ We plan to pay an interim dividend of ¥40 per share and a year-end dividend of ¥45 per share for an annual dividend of ¥85
per share for fiscal 2024 (expected 15th consecutive fiscal year of dividend increases)▶ We changed our policy for Shareholder Returns compared with ACE 2.0, establishing a total return ratio of 100% for fiscal years
2024 and 2025 (no change in policy regarding continuing dividend increases)▶ We resolved to repurchase 10 billion yen of treasury stock in May 2024 based on the above policy (scheduled for May to
October 2024) *Additional returns after November are to be resolved separately

Total Dividend

share buyback

Total Payout ratio

millions of yen

100.0

％

100.0
30,00028,000
76.5

90.0
80.0
70.0

58.9

20,00051.0

17,14848.3
13,907

39.5
35.6

33.0

10,000
+α

36.0

35.2

12,520

8,001

50.0
40.0

5,662

10,000

4,064

5,269
1,107

6,799

7,186

1,776

1,956

30.0

6,006
5,456

6,643
20.0

952

5,230

5,456

5,691

6,514

8,245

9,147

9,230
10.0

4,064

4,162

5,023

FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023

FY2024(Forecast)

¥32

¥33

¥40

¥42

¥44

¥46

¥54

¥70

¥80

¥85

0

Dividend per
share

60.0

0.0

※ FY2023 year-end dividend to be submitted for approval to the 109th general meeting of shareholders scheduled for June 2024.

Copyright © 2024 Nagase & Co., Ltd.

22

Medium-Term Management Plan ACE 2.0

Copyright © 2024 Nagase & Co., Ltd.

ACE 2.0 Basic Policies
Become a true “Business designer”
ACE 2.0 “Pursuit of Quality”
With a mindset focused on Accountability (A), Commitment (C) and Efficiency (E), and to enable its sustained
growth,NAGASE will work to give concrete shape (business, mechanisms, culture)(Pursuit)

to the aspirations expected by all of its stakeholders.
(Quality)

Reform of Profit Structure

Reform of Corporate Culture

Create a profit base toward the Ideal NAGASE

Mindset toward the Ideal NAGASE(1) Pursuit of profitability and efficiency
・Implement a company-wide asset replacement andreallocation of resources(2) Strengthen existing businesses(1) Pursuit of economic and social value
・Fostering a sustainability mindset, and rigorous
monitoring of financial and non-financial indicators(2) Pursue efficiency

・Expand business opportunities through globalization
・Improve productivity of manufacturing businesses andexpand value-added through technical innovation

・Deepen awareness of capital efficiency
・Improve productivity of core operations(3) Strengthen human resources to drive reforms(3) Create sustainable businesses

Functions supporting reforms(1) Accelerate DX further(2) Promote sustainability(3) Strengthen corporate functions

Copyright © 2024 Nagase & Co., Ltd.

24

FY2023 QUICK WIN Status -Laying the Groundwork for ChangeEvolve Our Business and Financial
Portfolios
Strengthening of front-line
capabilities
Growth strategy
Liquidation of
unprofitable businesses

Strengthen Management
Governance

Strengthen front-line capabilities andimprove capital efficiency
ROIC management
Digital utilization

Increase management efficiency anddecision-making speed

Reorganization

Decision-making
Functions

Delegation of authority

Elimination of waste

Acceleration of management

Collaboration

Restructure Our Human Resources
Portfolio
Succession planning
Human resources training
D&I

Maximize human capital and improveengagement
Engagement
Utilization of extended
employees

Copyright © 2024 Nagase & Co., Ltd.

25

Growth Strategies for the Future
Reorganize every Area based on the functional axis between trading company, manufacturing,and R&D functions.

Base Area

Trading Functions

Obtain cash and high-value-added information
to enhance Focus and Develop Businesses

Potential investments(Approximately 80 billion yen)in Focus and Develop businesses after 2023

FY2024 Gross Profit Plan 131 billion yen

Develop Area

Focus Area

Future Sources of Revenue

Manufacturing Functions inSpecific Areas

Research anddevelopment(biotechnology)

Food

New businesses(new products, etc.)

Semiconductors

New Areas(Southern Hemisphere)

Life Sciences

Improve Area

Base Area

Future Sources of Revenue

Take on new challenges in areas that will
become future sources of revenue

Focus Area

Develop Area

Manufacturing Functions inSpecific Areas

Trading Functions

technologies to increase overall profitability

FY2024 Gross Profit Plan 49 billion yen

Improve Area

GrowthPotential

Leverage our unique in-house products andUnprofitablebusinesses

Semicondu
ctorsElectrical
Equipment

Possibly impaired
businesses

Food

Mobility

ChemicalIndustry

Life
Sciences

ROIC

Reduce negative cash outflow

Copyright © 2024 Nagase & Co., Ltd.

26

Reform of Profit
Structure

Focus

Strengthening Our Semiconductor Wafer Bumping Business
Expand the electroless plating line in Penang, Malaysia (PacTech Asia Sdn. Bhd.) andinvest 1 billion yen

Expand PacTech Asia semiconductor wafer bumping facilities for
wider adoption in smartphones and electronic devices

・Achieve low cost and low power consumption with our coretechnology in WLP* using electroless plating while expanding
applications with advanced control technology for chemical
concentration and temperature, etc.
・World's leading share in the WLP contract processing market basedon WLP using electroless plating
・Strengthened line with an investment of 1 billion yen and launched
operations in April 2024
・Investment to increase production capacity to 150% of previous
levels* WLP：Wafer Level Package

Copyright © 2024 Nagase & Co., Ltd.

27

Reform of Profit
Structure

Focus

Nagase ChemteX Semiconductor Molding Compounds
a-SMC: advanced Sheet Molding Compound

Proposing New Concept Materials for Advanced Semiconductor Packaging
・Lineup including liquid molding compounds (LMC), which currently occupy a large share of themarket, and a new concept of sheet molding compounds (a-SMC) to meet the increasingly diverseand complex needs of advanced semiconductor packaging, including 2.XD/3D, WLP*1, and PLP*2
・Offer solutions for next-generation packaging through a multifaceted approach, aiming to become
the industry standard
Packaging Technology Roadmap

Features Uniform molding through resin application and flow
 PLP and other large-area moldability
 Low warping High flowability comparable to liquid molding compounds*1 WLP： Wafer Level Package*2 PLP: Panel Level Package

Copyright © 2024 Nagase & Co., Ltd.

28

Reform of Profit
Structure

Focus

Recovery and Recycling Business of Developer Solution in
Semiconductor Manufacturing Process
First in Japan to commercialize recovery and recycling of developer solution
used in semiconductor manufacturing
Provide solutions to reduce environmental impact in the manufacturing process of thesemiconductor industry, which is expected to increase future production volume

Semiconductor Manufacturers

Benefits NAGASE Offers to Society andCustomers
・TMAH, water reuse・Energy reduction
・Reduced industrial waste disposal

25% TMAH for semiconductors
*1

TMAH

(Developer Solution)

TMAH Effluent

Waste
water
Treatment

SN Tech(Higashi-Osaka No.2
Plant)

Green Mobius System
Pretreatment

RecoveryConcentration*2

60% TMAC(Raw Material)

Electrolysis/
Purification*1 TMAH: Tetramethyl Ammonium Hydroxide*2 TMAC: Tetramethyl Ammonium Chloride

Copyright © 2024 Nagase & Co., Ltd.

29

Reform of Profit
Structure

Focus

M&A in the Prinova GroupOperate vertically integrated business in the aroma business and expand business
into Brazil

・Acquired Brazilian essential oil refining and processing
company, Flavor Tec, in FY2023

Upstream

Citrus farms

Essential oil manufacturers

・Acquiring this high-quality distillation and processing
company in the citrus essential oil field enabled thevertical integration of business from raw material
processing to sales
・Strengthen sales and customer proposals byenhancing essential oil processing technology andimproving the quality of procured raw materials

Value
Chain

Flavor Tec(Essential oil distillation andprocessing)

Prinova Group(R&D, quality control, supply chain)

Downstream

Flavor and Fragrance Manufacturer

We will engage in distillation and processing in South America, the world's largest citrusproducing country, to reduce significantly logistics costs and environmental impact in raw
material transportation and provide sustainable solutions

Copyright © 2024 Nagase & Co., Ltd.

30

Reform of Profit
Structure

Improve

Progress in Improving Business Initiatives

・Reduced losses by approximately 3 billion yen compared to FY2022
・Certain subsidiaries posting operating losses have decided on a business direction andbegun implementing action plans
Improvement Targets

Initiatives

1. Operating loss among subsidiaries and equity in losses of affiliates
Develop and implement improvement plans as early as possible.

・Decided to halt color former business production in the U.S.

Study withdrawing from businesses not expected to improve.

2. Assets at risk for impairment loss

・Strengthen monitoring before risks arise about impairment losses

Strengthen monitoring of assets at risk of future impairment; minimize
impairments

3. Unprofitable transactions

・Improve profitability by listing individual unprofitable transactions

List and monitor all cases; return rights for businesses notexpected to improve[Operating Loss, Loss in Equity, Impairment Loss, and Unprofitable Transactions With Operating Subsidiaries]
FY2021

FY2022(2,974)(2,838)FY2023

Millions of yen
Impairmentof fixed
assetsLoss onvaluation of
securities

Through FY2025(2,276)(135)(1,436)(2,120)Aiming for Zero Losses

Approximate¥3.0 billion
reduction

Other

Approx. ¥9.0
billion loss

Losses of 1 billion yen
or less

Approx. ¥8.0
billion loss

Approx. ¥5.0
billion loss

Copyright © 2024 Nagase & Co., Ltd.

31

Reform ofCorporate Culture

Pursuit of Profitability and Efficiency - Indicators▶ WACC increased 0.2% compared to FY2022 mainly due to increased net assets▶ ROIC decreased 0.4% compared to FY2022 due to a decrease in net income and an increase in invested capital▶ Sold 7.1 billion yen of strategic cross-shareholdings in FY2023, resulting in a total of 22.4 billion yen in total sales over thethree-year period of ACE 2.0

FY2020

FY2021

FY2022

ROE

5.9％

7.7％

６.６％

WACC

5.7％

5.5％

5.７％

ROIC

4.2％

5.3％

4.4％

NET DE ratio

0.23x

0.33x

0.38x

Net assets (100 million

3,384

3,55０

3,７８３

1,189

1,665

1,７９６

78

152

+71

224

17.8%

15.0%

＋0.4

15.4%

yen)

Interest-bearing
debt (100 million yen)

Strategic
crossshareholdings

Cumulative sales
during the mid-termplan (100 million yen)
Percentage of net
assets24.1%

Copyright © 2024 Nagase & Co., Ltd.

Change
-0.7
＋0.2
-０.４
-0.10
+２２9
-１27

FY2023

5.9％
5.9％
４.０％
0.27x
４,０１3
1,66９

32

Reform ofCorporate Culture

Pursuit of Profitability and Efficiency - Shareholder Returns▶ Decided on a 100% total return ratio as a limited measure for FY2024 and FY2025 to control
capital growth and ensure an ROE of 8.0% or higher in the final year of ACE 2.0▶ Resolved to cancel 3 million shares of treasury stock

Change in Shareholder Return Policy
New Policy (Through FY2025)

Existing Policy

Total return
ratio

ー

Dividend

In principle, a continuous
increase in dividends

Sharebuybacks

Opportunistic implementation up
to the amount of strategic crossshareholdings sold100%
In principle, a continuous
increase in dividends*No change

Opportunistic implementation

Shareholder Return Results and Forecasts
FY2021Results

FY2022
Results

FY2023Results

FY2024
Forecast

FY2025
Forecast

Dividend per share (yen)

54

70

80

85

ー

(Interim + Year-end)(24+30)(30+40)(40+40)(40+45)ー

Share buybacks(100 million yen)

60

56

80

100 + αー

Total return ratio (%)

48.3

58.9

76.5

100%

100%

Copyright © 2024 Nagase & Co., Ltd.

33

Reform ofCorporate Culture

Cash Allocation▶ Increase operating CF by expanding business scale and improving profitability while conducting proactive asset
replacement▶ Set a 100% total return ratio for the next two years of ACE 2.0 and continue to expand growth investments whileleveraging debt

Cash In

Cash Out

Adjusted
operating CF*¥136.4 billion

Investments¥73.6 billion

Operating CF
・Improve gross profit
marginInvestments

・Shift resources into theSouthern Hemisphere・Strengthen base areas
・Utilize CVC・Strengthen
manufacturing functions

Corporate
Value
Improvement

Asset Replacement
・Sell strategic crossshareholdings
・Liquidize unprofitablebusinesses

・Proactive investments infocus and development
areas

Asset
Replacement¥26.0 billion

Shareholder
Returns¥43.5 billion

Shareholder Returns
・100% total return ratio(limited to two years)*Operating CF excludes changes in working capital and recorded DX and R&D expenses, etc.

Copyright © 2024 Nagase & Co., Ltd.

34

Functions
Supporting Reforms

Pursue Sustainability - Progress in Corporate Projects
Improve Employee Engagement(Main FY2023 Initiatives)• Encouraged dialogue between management and employees• Implemented the PDCA cycle to improve engagement based on
analysis of survey results in each organization• Revised the personnel system to clarify roles and duties,
achieve a high degree of compensation linkage, and abolishseniority-based management, which enabled the Company toallocate more dynamic human resources and employ a diverse
range of highly specialized human resources (from FY2024)

Non-Financial Targets (KPIs)
FY2021and Results

FY2022

FY2023

FY2025
Target

52.4

56.5

56.0

60 or higher

41%

81%

86%

100%

FY2021

FY2022

FY2023

FY2025
TargetScope 1 and 2
Reduction Rate
(Compared to
FY2013)

30%

34%

33%

37% or higher

Emission
Reduction
Through
Generation andPurchase ofRenewable Energy(Cumulative)

10 t

523 t

7,488 t35,000 t or
higherScope22,514 t2,014 t1,810 tZero emissions

Nagase (NonConsolidated):
Engagement Survey Total
Score

Group companies:
Percentage of companies
conducting regular
engagement surveys

Establish a system in which diverse human resources can work anddevelop their careers according to their abilities and desires, andfeel highly satisfied in their work

Carbon Neutrality(Main FY2023 Initiatives)• Collected and integrated primary data with Fujitsu Limited and Zeroboard

Non-Financial Targets (KPIs)
and Results

Inc., successfully calculating GHG emissions of the final product(notebook PC)• Reduced GHG emissions and gained expertise through on-site PPA*
initiatives, which utilize the sites of manufacturing subsidiaries, andvirtual PPA services

Consolidated• Consolidated information on NAGASE Group GHG reduction products andservices and developed a proposal system for business partners*Power Purchase Agreement

Progressed measures to visualize and reduce GHG emissions in the
supply chain

Nagase(Nonconsolida
ted)*Consolidated data includes data for Nagase, Nagase ChemteX, and Nagase Viita*Data for FY2023 consists of provisional values prior to third-party assurance

Copyright © 2024 Nagase & Co., Ltd.

35

Management Conscious of Capital Costs and Share Prices
Policies to Enhance Corporate Value
Execute growth, financial, and capital strategies set forth in the Medium-Term Management
Plan ACE 2.0

Current Issue Recognition

PBR has been below 1x since FY2007



Cost of equity is more than 8.0% based on dialogue with investorsStrategic cross-shareholdings of approx. 15% of net assets

Matters to be Addressed
Profitability and Efficiency••

Permeation of ROIC management: Improve gross profit margin andcapital turnoverReduce unprofitable businesses and unprofitable transactions inbusiness targeted for improvement
Reduce strategic cross-shareholdings in phases•

Increase in Shareholder Returns: limited 100% total return ratio•

Capital Costs

for two years

IR Activities•

Leverage debt in growth investments•

Make active disclosures of and expand dialogue with investors

Copyright © 2024 Nagase & Co., Ltd.

36

■Inquiries:
https://www.nagase.co.jp/english/contact/ir/■NAGASE Group Investor Relations Website:
https://www.nagase.co.jp/english/ir/

These presentation materials contain projections based on forward-looking
assumptions, forecasts, and plans as of May 24, 2024
Actual earnings may differ from projections due to risks and uncertainties in
the future global economy, competitive landscape, currency exchange rates,
etc.

Copyright © 2024 Nagase & Co., Ltd.

Appendix：Evaluations and Transition from External Organizations
Evaluations From External Organizations
Nagase Viita Co., Ltd. and NAGASE & CO., LTD.
Awarded Platinum and Silver, Respectively, for
the First Time
Movement in the supply
chain to select suppliers
based on EcoVadis scores

Listed for all six ESG indices adopted by GPIF
Morningstar Japan ex-REIT Gender Diversity Tilt Index
S&P/JPX Carbon Efficient Index
FTSE Blossom Japan Sector Relative Index

FTSE Blossom JapanMSCI Nihonkabu ESG Select Leaders Index(first time)
MSCI Japan Empowering Women Select Index
Pursuing Further Sustainability

HighestScore

FY２０１９Results

FY202０Results

FY2021Results

FY2022
Results

FY２０２３Results

FTSE

5.0

１．２

１．９

2.7

3.5

4.2

MSCI

AAA

BB

BB

BBB

A

A

ClimateChange

A

C

B

B

A-

A-

Water

A

C

B

A‐

A

A

Forest

A

C-

C

C

B

B

Supply Chain
Engagement

A

D

B

B

A

A

Platinum
[100]

ー
[41]

Bronzeー[43]BronzeSilver

ＣＤＰ

External
Organizations

Ecovadis[NAGASE Group]

Copyright © 2024 Nagase & Co., Ltd.