Nissan Chemical : Consolidated Financial Results for the Three Months Ended June 30,2021

Consolidated Financial Results for the Three Months Ended June 30, 2021(JPGAAP)

August 10, 2021

Name of listed company: Nissan Chemical Corporation						Stock Exchange: Tokyo
Code number: 4021								URL: http://www.nissanchem.co.jp/
Representative: YAGI Shinsuke, President
Inquiry to: DAIMON Hideki, Executive Officer and Head of Finance and Accounting Department Tel. [phone]
Scheduled submission date of quarterly report: August 12, 2021	䚷䚷䚷䚷䚷 Scheduled dividend payment date:
Supplemental information: Yes
Financial results meeting : Yes (For institutional investors and analysts)		(Amounts rounded down to the nearest million yen)
1. Consolidated Financial Results for the Three Months Ended June 30, 2021 (From April 1, 2021 to June 30, 2021)
(1) Consolidated Operating Results	(% indicates the rate of increase/decrease against the same period of the previous year)
	Net sales			Operating		Ordinary		Net income attributable
			income		income		to owners of parent
	Million yen		%		Million yen		%	Million yen		%	Million yen		%
Three months ended June 30, 2021	46,499		(5.6)		11,875		21.1	12,323		18.3	8,849		16.3
Three months ended June 30, 2020	49,280		1.2		9,810		5.0	10,416		4.4	7,608		(2.9)

(Note) Comprehensive income:	Three months ended June 30, 2021	: 8,053 million yen ,(20.2%)
	Three months ended June 30, 2020	: 10,091 million yen ,71.1%

	Basic earnings	Diluted net income
	per share	per share
	Yen	Yen
Three months ended June 30, 2021	61.73
Three months ended June 30, 2020	52.38
(2) Consolidated Financial Position
	Total assets	Net assets	Equity ratio
	Million yen	Million yen	%
As of June 30, 2021	246,600	193,927	77.9
As of March 31, 2021	265,509	200,562	74.9

(Reference) Shareholders' equity:	As of June 30, 2021		: 192,171 million yen
	As of March 31, 2021		: 198,828 million yen
2. Cash Dividends
		Cash dividends per share
	First	Second	Third	Year-end	Annual
	quarter	quarter	quarter
	Yen	Yen	Yen	Yen	Yen
Year ended March 31, 2021		46.00		58.00	104.00
Year ending March 31, 2022
Year ending March 31, 2022		48.00		60.00	108.00
(Outlook)
(Note) Revision of the latest released dividend outlook: None

3. Outlook of Consolidated Financial Results for the Fiscal Year Ending March 31, 2022 (From April 1, 2021 to March 31, 2022)

(% indicates the rate of increase/decrease against the same period of the previous year)

	Net sales		Operating		Ordinary		Net income attributable	Basic earnings
		income		income		to owners of parent	per share
	Million yen		%	Million yen		%	Million yen		%	Million yen	%	Yen
Six months	76,500		(19.0)	17,700		(1.6)	18,000		(1.0)	14,000	0.7	98.03
ending September 30, 2021
Year ending March 31, 2022	172,500		(17.5)	43,600		2.5	44,900		2.3	34,100	1.9	239.18
(Note) Revision of the latest released outlook of financial results: None

(Note) The Company determined to apply "Accounting Standard for Revenue Recognition" (ASJB Statement No. 29) from FY 2021. 㻌㻌As a result, the above earnings outlook is the amount after applying the relevant accounting standards.

4. Notes
(1) Changes in significant consolidated subsidiaries
(Changes in specified subsidiaries involving changes in scope of consolidation)	: None
(2) Application of special accounting treatment to preparation of quarterly financial statements	: 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	: None
3.	Changes in accounting estimates	: None
4.	Restatements	: None

(Note) Please refer to [2.Consolidated Financial Statements (4) Notes to Consolidated Financial Statements

"(Changes in Accounting Policies)" ] on page 10 for further details.

(4) Number of shares outstanding (common shares)

1.	Number of shares outstanding (including treasury shares)
	As of June 30, 2021	: 144,000,000 shares
	As of March 31, 2021	: 145,000,000 shares
2.	Number of treasury shares
	As of June 30, 2021	: 1,191,069 shares
	As of March 31, 2021	: 1,351,888 shares
3.	Average number of shares outstanding
	As of June 30, 2021	: 143,347,412 shares
	As of June 30, 2020	: 145,262,467 shares

(Note) The Company has introduced "Board Benefit Trust (BBT)" based on the resolution of Board of Directors' meeting held on July 30,2019. The shares held by the Trust are included in the number of treasury shares at the end of the period, and they are included in the number of treasury shares deducted in calculating the average number of shares outstanding over the period. The number of shares held by the Trust (included in treasury shares) at the end of the period was 164,800 shares. In addition, the average number of shares held by the Trust during the period was 164,967 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 outlook 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.
  The transcript of financial results briefing will be released on our website as well.

Table of Contents for Attached Materials
1. Qualitative Information on Quarterly Results ........................................................................................................	2
(1)	Business Performance ..............................................................................................................................	2
(2)	Financial Position .....................................................................................................................................	3
(3)	Outlook of Consolidated Financial Results and Other Forward-looking Information ....................................................	4
(4)	Basic Policy on Distribution of Earnings .........................................................................................................	4
2. Consolidated Financial Statements ...................................................................................................................	5
(1)	Consolidated Balance Sheets ......................................................................................................................	5
(2)	Consolidated Statements of Income / Consolidated Statements of Comprehensive Income .........................................	7
(3)	Consolidated Statements of Cash Flows ........................................................................................................	9
(4)	Notes to Consolidated Financial Statements ..................................................................................................	10
	(Notes on Assumption of Going Concern) .................................................................................................	10
	(Notes on Significant Changes in Shareholders' Equity) ................................................................................	10
	(Changes in Accounting Policies) ............................................................................................................	10
	(Segment Information) .........................................................................................................................	11

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1Qualitative Information on Quarterly Results

(1) Business Performance

During the first quarter of the current fiscal year (April 1, 2021 to June 30, 2021), the domestic economy showed an upward trend in exports and investment on plant and equipment due to the recovery of overseas economies. However, a full fledged recovery was not achieved, as consumer spending was sluggish due to the impact of extension and recurrence of the declaration of emergency situations. Under these circumstance, sales of Basic Chemicals and Fine Chemicals increased in the Chemicals Segment. In the Performance Materials Segment, Display Materials, Semiconductor Materials and Inorganic materials performed well. In the Agricultural Chemicals Segment, sales decreased.In the Pharmaceuticals Segment, sales in "Custom Chemicals" (custommanufacturing and process researching services for pharmaceutical companies) decreased.

As a result, business performances for this period were as follows.

(Million yen, amount rounded down to the nearest million yen)

	1Q FY2020	1Q FY2021	Change
Sales	49,280	46,499	(2,780)
Operating income	9,810	11,875	+2,065
Ordinary income	10,416	12,323	+1,907
Net income attributable	7,608	8,849	+1,241
to owners of parent

1Q FY2021	Change from
(Outlook)(Note)	Outlook
40,000	+6,499
9,800	+2,075
10,200	+2,123
7,500	+1,349

(Note) Outlook is described on page 14 of the FY2020 Presentation Materials (announced on May 14, 2021).

The Company adopted "Accounting Standard for Revenue Recognition" (ASBJ Statement No.29, revised on March 31, 2020) and other standards from the first quarter of the fiscal year ending March 31, 2022. For supplemental information, please refer to [2.Consolidated Financial Statement (4) Notes to Consolidated Financial Statements "(Changes in Accounting Policies)"] on page 10.

Explanations by segments are as below.

The Chemicals Segment

In the Basic Chemicals, sales of melamine (adhesives agent for particle board) and high purity sulfuric acid (agent used for cleaning semiconductor) increased. In the Fine Chemicals, sales of "TEPIC" for general use (powder coating agent for paint, sealants, etc.) and environmental chemicals (sterilizing and disinfecting agents for pools and septic tanks, etc.) performed well.

As a result, sales of this segment were 8,833 million yen (an increase of 1,418 million yen) and operating income was 1,265 million yen (an increase of 596 million yen). Compared to the outlook (Note), sales were above 0.4 billion yen and operating income was the same.

(Note) The outlook is described on page 19 and 20 of the FY2020 Presentation Materials.

The Performance Materials Segment

In the Display Materials, sales of "SUNEVER" (LCD alignment coating) for tablets and notebook PCs performed well. In the Semiconductor Materials, sales of anti-reflective coating for semiconductors (ARC®*) and multilayer materials (OptiStack®*) increased, reflecting favorable operation by customers. In the Inorganic materials, sales of "SNOWTEX" for polishing electronic materials and hard coating, and Organo / Monomer sol (various kinds of coating materials, resin additive) were firm.

As a result, sales of this segment were 19,951 million yen (an increase of 2,867 million yen) and operating income was 6,953 million yen (an increase of 1,643 million yen). Compared to the outlook (Note), sales were above 1.4 billion yen and operating income was above 1.5 billion yen.

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(Note) The outlook is described on page 19 and 20 of the FY2020 Presentation Materials. *ARC® and OptiStack® are registered trademarks of Brewer Science, Inc.

The Agricultural Chemicals Segment

Due to adoption of "Accounting Standards for Revenue Recognition" from FY2021, the frequency of royalty appropriation doubled from every 6 months to every quarters, resulting in sales increase of Fluralaner (active ingredients for veterinary pharmaceuticals).

In domestic agrochemicals market, although sales of "ROUNDUP" (non-selective leaf treatment herbicide) were unchanged from the previous fiscal year, sales of "ALTAIR" (paddy rice herbicide) and "GRACIA" (insecticide) declined. In the overseas agrochemicals segment, sales of "QUINTEC" (fungicide) were firm, but shipments of "GRACIA" decreased and those of "TARGA" (herbicide) were delayed.

As a result, sales of this segment were 13,403 million yen (a decrease of 1,178 million yen) and operating income was 4,097 million yen (an increase of 80 million yen). Compared to the outlook (Note), sales were below 1.1 billion yen and operating income was above 0.3 billion yen. (Note) The outlook is described on page 19 and 20 of the FY2020 Presentation Materials.

The Pharmaceuticals Segment

Sales of "LIVALO" (anti-cholesterol drug) declined due to increased sales of generic drugs in Japan and overseas. Sales of "Custom Chemicals" decreased due to the lag of shipment.

As a result, sales of this segment were 1,069 million yen (a decrease of 430 million yen) and operating loss was 185 million yen (a decrease in profit of 115 million yen). Compared to the outlook (Note), sales were above 0.2 billion yen and operating income was above 0.1 billion yen.

(Note) The outlook is described on page 19 and 20 of the FY2020 Presentation Materials.

Trading

Sales of this segment were 17,799 million yen (a decrease of 383 million yen), and operating income was 664 million yen (an increase of 11 million yen). Compared to the outlook (Note), sales were above 1.3 billion yen and operating income was above 0.2 billion yen.

(Note) The outlook is described on page 19 and 20 of the FY2020 Presentation Materials.

Others

Sales of this segment were 4,911 million yen (an increase of 125 million yen) and operating income was 68 million yen (an increase of 20 million yen).

(2) Financial Position

(Position of Assets, Liabilities and Net Assets)

Total assets as of June 30, 2021 was 246,600 million yen (a decrease of 18,909 million yen from March 31, 2021). It is mainly due to the decrease of cash and deposits.

Also, total liabilities as of June 30, 2021 was 52,672 million yen (a decrease of 12,274 million yen). It is mainly due to the decrease of short-term loans payable.

Net assets as of June 30, 2021 was 193,927 million yen (a decrease of 6,634 million yen). As a result of these factors, equity ratio was 77.9% (an increase of 3% from March 31, 2021).

(Position of Cash Flow)

Deducting income taxes paid from income before income taxes and non-controlling interests, depreciation and gain and loss on working capital, net cash provided by operating activities for the three months ended June 30, 2021 was 11,849 million yen (12,394 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, 2021 was 3,291 million yen (1,557 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, 2021 was 23,821 million yen (24,851 million yen).

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