During the first three quarters of this consolidated fiscal year (April 1 to December 31, 2023), the global economy saw continuing uncertainty as the rise in fuel and raw material prices eased but prices remained at high levels and the high level of geopolitical risk persisted along with the prolonged invasion of Ukraine by Russia.
The Nippon Kayaku Group entered the second year of “KAYAKU Vision 2025”, the mid-term business plan which began last fiscal year, amid such conditions. We continue to implement the roadmap to the vision specified for each business while advancing initiatives to address key company-wide issues aimed at achieving the vision.
As a result, net sales for the first three quarters of this consolidated fiscal year totaled 149,753 million yen, a decrease of 3,874 million yen (2.5%) year-on-year. Sales in the Mobility & Imaging Business Unit and Life Science Business Unit outperformed while sales in the Fine Chemicals Business Unit underperformed the first three quarters of the previous fiscal year.
Operating income totaled 4,111 million yen, a decrease of 14,950 million yen (78.4%) year-on-year. The decrease resulted from an increase in SG&A expenses accompanying a 6,000 million yen upfront payment upon concluding a licensing agreement with AnHeart Therapeutics Inc. in the pharmaceuticals business, in addition to the decrease in net sales in the Fine Chemicals Business Unit and the negative impact from the surge in raw material prices.
Ordinary income totaled 7,473 million yen, a decrease of 13,521 million yen (64.4%) year-on-year. Foreign exchange gains were the main reason behind the net increase at the non-operating level, which boosted ordinary income above operating income.
Profit attributable to owners of parent was 2,829 million yen, a decrease of 12,412 million yen (81.4%) year-on-year. The decrease resulted mainly from a loss on valuation of investment securities.

Sales rose to 60,709 million yen, an increase of 5,959 million yen (10.9%) year-on-year.
In the safety systems business, sales of airbag inflators and micro gas generators for seatbelt pretensioners outperformed year-on-year. This resulted from partial resolution of the negative impact of the semiconductor shortage and a rebound in domestic automobile production. Overseas, sales of air bag inflators, micro gas generators for seatbelt pretensioners, and squibs outperformed year-on-year, supported by overall firm demand in Europe, the U.S., China, and the ASEAN region and the positive impact from translation adjustments due to yen weakness. The safety systems business overall outperformed year-on-year as a result.
The Polatechno business underperformed year-on-year due to sluggish demand for dye-type polarizing films used in vehicles, despite firm demand for components for X-ray analysis systems.
Segment profit was 5,861 million yen, a decrease of 891 million yen (13.2%) year-on-year. The decrease was caused by rising manufacturing costs due to the surge in raw material prices.

Sales were 40,742 million yen, a decrease of 10,892 million yen (21.1%) year-on-year.
The functional materials business as a whole underperformed the first three quarters of the previous fiscal year. This underperformance resulted from a slump in consumer demand and low demand for epoxy resins and other products groups affected by the delay in a rebound in the semiconductor materials market.
The color materials business as a whole underperformed the first three quarters of the previous fiscal year. This underperformance resulted from slow sales of colorants for inkjet printers for consumer use and of ink for inkjet printers in industrial applications, despite strong sales of developer for thermal paper.
Slow sales caused the catalyst business to underperform year-on-year.
Segment profit totaled 3,275 million yen, a decrease of 6,203 million yen (65.4%) year-on-year. The decrease stemmed from a decline in net sales in the functional materials, color materials, and catalyst businesses.

Sales rose to 48,301 million yen, an increase of 1,058 million yen (2.2%) year-on-year.
In the pharmaceuticals business, pharmaceuticals for the Japanese domestic market were on par with the first three quarters of the previous fiscal year due to increased market penetration of ALAGLIO® divided granules, a photodynamic diagnostic agent, and the contribution from the antibody biosimilar BEVACIZUMAB BS, which was launched last fiscal year. Although exports underperformed year-on-year, sales of active pharmaceutical ingredients, contract production, and diagnostic drugs for the Japanese domestic market outperformed the first three quarters of the previous fiscal year, resulting in year-on-year outperformance for the pharmaceuticals business as a whole.
The agrochemicals business as a whole underperformed the first three quarters of the previous fiscal year due to sluggish domestic sales, despite year-on-year outperformance in exports.
Sales in the real estate were on par with the first three quarters of the previous fiscal year.
Segment profit totaled 888 million yen, a decrease of 7,587 million yen (89.5%) year-on-year. The decrease resulted from an increase in SG&A expenses accompanying an upfront payment upon concluding a licensing agreement with AnHeart Therapeutics Inc. in the pharmaceuticals business.

Net sales	Operating income	Ordinary income	Profit attributable to owners of parent	Net income per share
149,753 million yen (Decrease year-on- year by 2.5％)	4,111 million yen (Decrease year-on- year by 78.4％)	7,473 million yen (Decrease year-on- year by 64.4％)	2,829 million yen (Decrease year-on- year by 81.4％)	17.06 Yen