Nippon Suisan Kaisha : Consolidated Financial Report for 3Q of FY2021

February 4, 2022

Consolidated Financial Report for the 3rd Quarter of the Fiscal Year 2021 (April 1, 2021, through December 31, 2021)

Qualification: This is directly translated into English for readers' convenience, and all financial results conform with the accounting principles generally accepted in Japan.

1. Consolidated Financial Data of 3rd Quarter of FY2021

(1) Consolidated Financial Results (For Nine months ended December 31, 2021)

(Each percentage shows changes year-on-year)

(Note) Nissui has adopted the "Accounting Standard for Revenue Recognition" (ASBJ Statement No.29, March 31, 2020), etc., from the first quarter of the current consolidated fiscal year. Accordingly, all figures for the third quarter of the fiscal year ended March 31, 2021, have been retroactively adopted to the above accounting standards; thus, we do not describe the difference in percentage between the previous fiscal year and the year before.

(2) Consolidated Financial Position of 3rd Quarter

Ref.): Total shareholders' equity

As of December 31, 2021, 186,125 million yen As of March 31, 2021, 169,427 million yen

(Note) Nissui has adopted the "Accounting Standard for Revenue Recognition" (ASBJ Statement No 29, March 31, 2020), etc., from the first quarter of the current consolidated fiscal year. Accordingly, the figures for the third quarter of the fiscal year ended March 31, 2021, have been retroactively adopted to the above accounting standards.

2. Dividend

(Note) Revision to dividend forecast during the current quarter: None

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3. Consolidated Forecast for FY2021(April 1, 2021, through March 31, 2022)

(Each percentage shows changes year-on-year)

(Note) Revision during the current quarter to the consolidated forecast for FY2021: Yes

(Note) Nissui has adopted the "Accounting Standard for Revenue Recognition" (ASBJ Statement No.29, March 31, 2020), etc., from the first quarter of the current consolidated fiscal year. Accordingly, the percentage change from the previous year has retroactively adopted the above accounting standards.

* Notes

the current consolidated first quarter)

(Note) Nissui has introduced the "Board Benefit Trust (BBT)" as its performance-linkedstock-based compensation plan since FY2018, and its own shares remaining in the Trust is included as treasury shares. The number of treasury stocks at the end of the term was 223,600, and the average number of shares during the term was 266,748.

* The summary of financial results is not subject to audits.

*Explanation on the proper use of the forecasts and other noteworthy items

This report's performance forecasts are based on available information, and certain premises thought to be reasonable. Accordingly, the results may change substantially due to various factors. For conditions from which the premises for the forecasts were derived and the other noteworthy items relating to the use of the forecasts, please refer to "(3) Explanation on Consolidated Financial Forecasts" on page 6 of Qualitative information for the third quarter of the fiscal year ending March 31, 2022.

*Supplemental Documents for the 3rd Quarter of FY2021 was disclosed on TD-net (Timely Disclosure network) on the same day.

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1. Qualitative information for the third quarter of the fiscal year ending March 31, 2022

1. Explanation on consolidated financial results

Nissui has adopted the "Accounting Standard for Revenue Recognition" (ASBJ Statement No.29, March 31, 2020), etc., from the first quarter of the current consolidated fiscal year and compared and analyzed the same period of the previous year and the previous fiscal year, which had been adopted the accounting standard retroactively.

During the third quarter of the consolidated fiscal year under review, the Japanese economy witnessed corporate earnings improve, mainly in the manufacturing industry, thanks to the various economic policies launched by the Japanese Government. Also, personal consumption was recovering since the emergency declaration, and pre-emergency measures were lifted on September 30, 2021.

In terms of the global economy during the period subject to consolidated accounting from January to September, consumer spending and capital investment increased after the restriction on going out, etc., were gradually lifted in the background of vaccination spread. Meanwhile, the number of people infected with COVID-19 was rising in the United States and Europe at the same time.

While economic activities are recovering in Japan and overseas, we cannot see the end of the novel coronavirus because of the outbreak of mutant viruses. Also, the situation is still unclear as there is confusion in logistics caused by container shortage and rising shipping costs, along with hiking raw material prices and labor costs.

The Company and its corporate group showed improvement in the aquaculture business inside and outside Japan. Sales of marine products improved following the recovery of economic activity. On the other hand, the Japanese fishery and Alaskan pollock processing business struggled. The sales for household and foodservice in the food products business stayed firm in Europe and the USA.

Under these circumstances, the consolidated financial results through the third quarter of the consolidated fiscal year under review were as follows: net sales were 525,279 million yen, up 58,995 million yen year-on-year; operating profit was 24,652 million yen, up 9,588 million yen year-on-year; ordinary profit was 29,330 million yen, up 10,529 million yen year-on-year.

Regarding extraordinary profit or loss, there were indications of impairment on non-current assets of UniSea, Inc., one of the consolidated companies of Nissui, in the United States. As a result of evaluating the collectability of the fixed assets by estimating future cash flows considering the current business environment, we posted 5,002 million yen as the impairment loss for the 3rd Quarter of the fiscal year ending March 31, 2022. Thus, the profit attributable to the owners of the parent company was 16,601 million yen, up 3,411 million yen year-on-year. (For the details, please refer to" Notice concerning recording of extraordinary loss (impairment loss)" disclosed today.)

We once again discuss our medium-to-long-term vision and strategies to realize our vision in the current fiscal year and make steady efforts to strengthen the constitution for the upcoming mid-to-long-term management plan.

Specifically, we will position it as "time to solidify the foundation for overcoming weak points, developing strengths, and regrowing," and rebuild our domestic aquaculture business and chilled business immediately in addition to the launch of sales of pure EPA active pharmaceutical ingredients for overseas market. Also, we will expand and strengthen products that are delicious and contribute to health that responds to the changes in lifestyles and needs, such as restrictions on going out and increasing work from home on a global scale.

As for our measures against COVID-19, we will continue to implement workstyles for employees to realize the 3Cs, namely avoiding "closed spaces," "crowded places," and "close-contact settings," by combining "working from home"and "web meetings," etc., to prevent the spread of infection. We are committed to continuing with measures to prevent infection, ensuring our business partner's and employees' safety, and thereby fulfilling our responsibilities to produce and supply food.

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[ North America]

・Revenue and income increased as the sales were steady following the recovery of economic activities. However, the production volume of fillet and pollock roe declined due to the epidemic of COVID-19 at pollock processing factories in Alaska, USA. In addition, there was an increase in cost for countermeasures for coronavirus than expected.

[Europe]

・Both revenue and income increased as the sales were firm after economic activities improved.

(2) Food Products Business

We recorded 250,143 million yen (up 22,821 million yen year-on-year) in sales and operating profit of 13,440 million yen (up 2,487 million yen year-on-year).

Processed Foods Business: Both revenue and income increased year-on-year. [Japan]

・Revenue increased but income decreased due to rising material costs such as surimi while sales were steady.

[North America and Europe]

・Revenue and income grew as sales for foodservice expanded as the demand for dining out improved, whereas sales for household use stayed healthy.

Chilled Foods Business: Both revenue and income increased year-on-year.

・Income increased as the sales of chilled lunch boxes (Note1) and rice balls for convenience stores improved. Also, there was a cost reduction effect.

(3) Fine Chemicals Business

The Fine Chemicals segment is engaged in manufacturing and selling pharmaceutical raw materials, functional raw materials (Note2), functional foods (Note 3), diagnostic medicines, and test drugs.

We recorded 24,378 million yen (up 5,381 million yen year-on-year) in sales and operating profit of 3,038 million yen (up 1,098 million yen year-on-year) in the Fine Chemicals Business.

[Pharmaceutical Raw Materials, Functional Raw Materials and Functional Foods]

・Revenue and income increased thanks to the strong mail-order sales of functional foods.

[Clinical Diagnostic and Test Drug]

・Revenue and income increased as PCR testing agents for the COVID-19 and culture media for overseas sold well.

(4) General Distribution Business

We recorded 12,161 million yen (down 728 million yen year-on-year) in sales and operating profit of 1,797 million yen (down 11 million yen year-on-year) in the General Distribution Business.

・Revenue decreased due to the partial business transfer.

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