Nicca Chemical : Summary of Consolidated Financial Results for the First Quarter of the Fiscal Year 2023(Based on Japanese GAAP)

FOR TRANSLATION PURPOSE ONLY

Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes.

In the event of any discrepancy between this translated version and the original Japanese version, the latter shall prevail.

April 28, 2023

Summary of Consolidated Financial Results

for the First Quarter of the Fiscal Year 2023 (FY12/2023)

[Japanese GAAP] (Consolidated)

Company name: NICCA CHEMICAL CO., LTD.

Stock exchange listing:

Tokyo and Nagoya

Securities code:

4463

URL:

https://www.nicca.co.jp

Representative:

President & CEO (Chief Executive Officer)

Yasumasa Emori

Inquiries:

CFO (Chief Financial Officer) (Administration)

Shoya Sawasaki

TEL: [phone] (main)

Scheduled date to file Quarterly Securities Report:

May 12, 2023

Scheduled date to commence dividend payments:

N/A

Preparation of supplementary material on financial results:

Yes

Holding of financial results meeting:

No

(Amounts less than one mil. yen are rounded down)

1. Consolidated financial results of the first quarter of FY12/2023 (January 1, 2023 - March 31, 2023)

(1) Consolidated operating results (cumulative)

(Percentages indicate year-on-year increase/decrease)

Net sales

Operating profit (loss)

Ordinary profit (loss)

Net profit (loss) attributable to

owners of parent

mil. yen

%

mil. yen

%

mil. yen

%

mil. yen

%

1Q of FY12/2023

11,520

(4.2)

179

(75.4)

281

(69.0)

27

(94.7)

1Q of FY12/2022

12,022

－

729

905

－

520

－

(Note) Comprehensive income 1Q of FY12/2023:

185 mil. yen [ (87.0)%]

1Q of FY12/2022:

1,429 mil. yen [ － %]

Net profit (loss) per share

Diluted net profit (loss) per share

yen

yen

1Q of FY12/2023

1.74

－

1Q of FY12/2022

33.00

－

Note: The Company has applied the "Accounting Standard for Revenue Recognition" (Accounting Standards Board of Japan Guidance No. 29 of March 31, 2020), etc. since the beginning of the previous first quarter consolidated fiscal period, and the Accounting Standard has been applied to the figures of the first quarter of FY12/2022, so quarterly comparison of increase/decrease rates relative to FY12/2021 are not shown.

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

Net assets per share

mil. yen

mil. yen

%

yen

1Q of FY12/2023

54,783

30,200

50.7

1,759.25

FY12/2022

56,122

30,392

49.8

1,771.74

(Reference) Shareholders equity

1Q of FY12/2023:

27,780 mil. yen

FY12/2022:

27,960 mil. yen

2. Cash dividends

Annual dividends per share

1Q-end

2Q-end

3Q-end

Year-end

Total

yen

yen

yen

yen

yen

FY12/2022

－

11.00

－

19.00

30.00

FY12/2023

－

FY12/2023 (forecasts)

16.00

－

16.00

32.00

Note: Revisions to dividend forecasts published most recently: No

3. Consolidated performance forecasts for FY12/2023 (January 1, 2023 - December 31, 2023)

(Percentages indicate year-on-year increase/decrease)

	Net sales		Operating profit		Ordinary profit	Net profit attributable to	Net profit per share
			owners of parent
	mil. yen		%	mil. yen		%	mil. yen	%	mil. yen	%	yen
Full-term	52,000		2.7	2,700		2.7	2,800	(10.6)	1,700	(19.6)	107.78

Note: Revisions to performance forecasts published most recently: No

FOR TRANSLATION PURPOSE ONLY

*Notes

1. Changes in important subsidiaries during the current consolidated cumulative period

(changes in specified subsidiaries resulting in the change in scope of consolidation):No

(2) Application of Special Accounting Methods to the Preparation of Quarterly Consolidated Financial Statements: Yes

①	Changes in accounting policies due to revisions to accounting standards and other regulations:	No
②	Changes in accounting policies due to other reasons:	No
③	Changes in accounting estimates:	No
④	Restatement of prior period financial statements:	No

(3) Number of issued shares (common shares)

• Total number of issued shares at the end of the period (including treasury stock)

1Q of FY12/2023:

17,710,000 shares

FY12/2022:

17,710,000 shares

• Number of treasury stock at the end of the period

1Q of FY12/2023:

1,918,721 shares

FY12/2022:

1,928,421 shares

• Average number of shares during the period

1Q of FY12/2023:

15,784,679 shares

1Q of FY12/2022:

15,764,329 shares

• Quarterly summary of financial results is not included in a quarterly review by a certified public accountant or an auditing firm.
• Explanation regarding appropriate use of the performance forecasts and other special notes (Notes on descriptions about the future, etc.)
  Descriptions about the future such as performance forecasts contained in this document are based on information currently available to the Company and certain presumptions considered as reasonable, and those are not intended to indicate the Company should assure that it would realize such forecasts. Meanwhile, actual performance may differ substantially, influenced by a wide variety of factors in the future.

FOR TRANSLATION PURPOSE ONLY	NICCA CHEMICAL CO., LTD. (4463)
	Summary of Consolidated Financial Results for the First Quarter of FY12/2023
○ Table of Contents: Appendix
1. Qualitative Information regarding the Financial Results of the Current Quarter	.....................................................	2
(1)	Descriptions regarding operating results	2
(2)	Descriptions regarding financial position	3
(3)	Descriptions regarding future prospects such as consolidated performance forecasts	3
2. Quarterly Consolidated Financial Statements and Principal Notes	4
(1)	Quarterly Consolidated Balance Sheets	4
(2)	Quarterly Consolidated Statements of Income and Statements of Comprehensive Income	6
	Quarterly Consolidated Statements of Income
	For the first quarter consolidated cumulative period	6
	Quarterly Consolidated Statements of Comprehensive Income
	For the first quarter consolidated cumulative period	7
(3)	Notes on Quarterly Consolidated Financial Statements	8
	(Notes on Going Concern Assumption)	8
	(Notes in Case of Significant Changes in the Amount of Shareholders' Equity)	8
	(Application of Special Accounting Methods to the Preparation of Quarterly Consolidated Financial Statements) ....	8
	(Segment Information, etc.)	8

－ 1 －

FOR TRANSLATION PURPOSE ONLY	NICCA CHEMICAL CO., LTD. (4463)
	Summary of Consolidated Financial Results for the First Quarter of FY12/2023

1. Qualitative Information regarding the Financial Results of the Current Quarter

1. Descriptions regarding operating results

During the first quarter consolidated fiscal period (Jan. 1, 2023 - Mar. 31, 2023), global economy has still been facing concerns about worldwide recession due to, not only steep rise of resource prices because of the invasion into Ukraine by Russia, but also slowdown in consumption impacted by high inflation and high interest rates in the USA. Meanwhile, Japanese economy has seen progressive normalization of economic activities thanks to gradual relaxation of various restrictions because of COVID-19 infections. However, there has been a high inflation due to such as rise in prices of imported goods and thus suppressed consumer confidence, and consequently there remains uncertainty about the future both domestically and globally.

In such an environment, the Group has its overall basic vision of "To be the most respected innovation company for customers all over the world" by 2025, and aims at permanent growth around its three managerial axes ("Innovation", "Efficiency" and "Sustainability") by converting the drastically-changing management environment to business chances and by putting its efforts to business activities which would provide values increasingly required by our society. To this end, for the corporate purpose called "Activate your life", the Company developed its three-years'Medium-Term Business Plan named "INNOVATION25" (2023-2025) and is now willing to work on promotion of its five major strategies of "Major transformation of business structure", "Well-balanced investment", "Productivity reform", "Promotion of sustainable management", and "Evolution of the extended family policy".

Consolidated performance of the current first quarter consolidated cumulative period was as follows: Net sales of 11,520 mil. yen (decrease by 4.2% YoY); Operating profit of 179 mil. yen (decrease by 75.4% YoY); Ordinary profit of 281 mil. yen (decrease by 69.0% YoY); and Net profit attributable to owners of parent of 27 million yen (decrease by 94.7% YoY).

Operating results of individual business segments are as follows. Please note that Net sales of each segment as shown below does not include inter-segment sales.

(Chemicals Business)

Net sales was 8,310 mil. yen (decrease by 6.2% YoY), and Segment profit was 237 mil. yen (decrease by 62.3% YoY). Despite obtaining some new business opportunities and other positive factors, sales of textile chemicals substantially decreased because of less demand impacted by inventory adjustment of apparel products in the United States and Europe and by lower utilization rates in China due to abruptly widespread COVID-19 infections, resulting in lower revenues and lower earnings.

(Cosmetics Business)

Net sales was 3,076 mil. yen (increase by 5.6% YoY), and Segment profit was 386 mil. yen (decrease by 22.6% YoY). Sales of DEMI cosmetics was affected by worsened market conditions due to decreasing number of guests visiting beauty salons. On the other hand, with respect to consolidated subsidiaries, sales by DEMI KOREA CO., LTD. and commissioned business done by Yamada Pharmaceutical maintained good performance. In addition, strategic promotion investment and other measures for DEMI cosmetics resulted in decreased profit.

(Other Business)

Net sales was 133 mil. yen (decrease by 46.9% YoY), and Segment profit was 16 mil. yen (increase by 4.6% YoY).

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FOR TRANSLATION PURPOSE ONLY

NICCA CHEMICAL CO., LTD. (4463)

Summary of Consolidated Financial Results for the First Quarter of FY12/2023

1. Descriptions regarding financial position (Assets)
   Total assets as of the end of the current first quarter consolidated fiscal period was 54,783 mil. yen, i.e. decrease by 1,339 mil. yen as compared to the end of the previous consolidated FY. This is mainly due to decrease in Notes, accounts receivable - trade & contract assets by 1,191 mil. yen.

(Liabilities)

Total liabilities as of the end of the current first quarter consolidated fiscal period was 24,582 mil. yen, i.e. decrease by 1,147 mil. yen as compared to the end of the previous consolidated FY. This is mainly due to decrease in Notes and accounts payable by 1,387 mil. yen and Provision for bonuses by 438 mil. yen on one hand, and increase in Other current liabilities (mainly Advances received) by 1,008 mil. yen on the other.

(Net assets)

Total net assets as of the end of the current first quarter consolidated fiscal period was 30,200 mil. yen, i.e. decrease by 192 mil. yen as compared to the end of the previous consolidated FY. This is mainly due to decrease in Retained earnings by 272 mil. yen.

(3) Descriptions regarding future prospects such as consolidated performance forecasts

There is no amendment to the consolidated performance forecasts as announced on February 10, 2023.

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