Toyo Suisan Kaisha : Consolidated Financial Results for the Nine Months Ended December 31, 2021

January 31, 2022

Consolidated Financial Results

for the Nine Months Ended December 31, 2021

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Toyo Suisan Kaisha, Ltd.

First Section of the Tokyo Stock Exchange 2875

https://www.maruchan.co.jp/

Masanari Imamura, Representative Director and President Takayoshi Hirano, General Manager of Accounting Department

(Amounts less than one million yen have been omitted.)

1. Consolidated Operating Results for the First Nine Months of FY2022 (from April 1, 2021 to December 31, 2021)

The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc., from the beginning of the first quarter of the fiscal year ending March 31, 2022. In addition, in accordance with principle-based treatment, the new accounting policy has been retrospectively applied to all prior periods. Accordingly, the year-on-year change for net sales for the nine months ended December 31, 2020 is not shown due to the retrospective adjustment in accordance with the change in the accounting policy.

(2) Consolidated Financial Position

The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc., from the beginning of the first quarter of the fiscal year ending March 31, 2022. In addition, in accordance with principle-based treatment, the new accounting policy has been retrospectively applied to all prior periods. Accordingly, the consolidated financial position for the fiscal year ended March 31, 2021 was retrospectively adjusted.

2. Dividends

Note: Revisions to the dividends forecasts most recently announced: None

3. Consolidated Results Forecasts for FY2022 (from April 1, 2021 to March 31, 2022)

(Percentages indicate year-on-year changes.)

Note: Revisions to the results forecasts most recently announced: None

• Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None
2. Application of specific accounting procedures for preparation of the quarterly consolidated financial statements: None
3. Changes in accounting policies, changes in accounting estimates, and restatement
4. 1. Changes in accounting policies due to amendments to accounting standards and other regulations: Yes
   2. Changes in accounting policies due to other reasons: None
   3. Changes in accounting estimates: None
   4. Restatement: None
5. Number of shares issued (common stock)
6. 1. Number of shares issued at end of period (including treasury shares)

1. Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

• Quarterly financial results reports are exempt from quarterly reviews conducted by certified public accountants or an audit corporation.
• Explanation related to the appropriate use of the results forecasts and other items warranting special mention(Caution regarding forward-looking statements)
  Forward-looking statements in this document, including the results forecasts, etc., are based on the information available as of the date of the release of this document and the preconditions that the Company deemed to be reasonable; they are not meant to be a commitment by the Company, and a variety of factors in the future may cause actual results to differ materially from these forecasts. Please refer to Section: "(3) Explanation of forward-looking information, including consolidated results forecasts" of "1. Qualitative Information on Quarterly Consolidated Financial Results for the Nine Months Ended December 31, 2021" on page 3 of the attachments for the preconditions for the results forecasts and items to exercise caution in the use of these results forecasts.

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1. Qualitative Information on Quarterly Consolidated Financial Results for the Nine Months Ended December 31, 2021

(1) Explanation of the consolidated operating results

During the nine months ended December 31, 2021, signs of recovery were seen in the Japanese economy as the challenging conditions due to the impact of the novel coronavirus disease (COVID-19) gradually relaxed. Looking ahead, although recovery is expected to continue on the back of results from various economic measures and the improvement of overseas economies amid the restoration of socioeconomic activities toward normalcy, it is necessary to closely monitor the risk of a downturn in Japanese and overseas economies caused by a resurgence of the spread of infection, affecting socioeconomic activities, the impact of fluctuations in financial and capital markets, etc.

Under these circumstances, the Toyo Suisan Group (hereafter, the "Group") has remained committed to its mission "to contribute to society through foods" and "to provide safe and secure foods and services to customers" under the corporate slogan of "Smiles for All." The Group continued to implement further cost reductions and promoted aggressive sales activities in its efforts to face an increasingly competitive sales environment.

As a result, net sales were ¥268,097 million (up 4.6% year on year), operating profit was ¥24,822 million (down 14.6% year on year), ordinary profit was ¥26,386 million (down 14.1% year on year), and profit attributable to owners of parent was ¥18,353 million (down 19.1% year on year) for the period under review.

The foreign exchange rate used for the period was ¥115.01 to the U.S. dollar (¥103.50 to the U.S. dollar for the corresponding period of the previous fiscal year).

The operating results by segment are as follows.

In the Seafood Segment, due to the impact of requests for the public to stay at home and other measures to prevent the spread of COVID-19, although the sales for prepared food departments of some supermarkets and food delivery businesses increased, sales decreased mainly due to lower sales volume of products for convenience stores and other factors. As a result, segment sales were ¥18,924 million (down 2.7% year on year) and segment profit was ¥294 million (up 42.9% year on year) mainly due to an improvement in the cost of sales ratio of fish eggs and an increase in shipments, despite the surge in the price of tuna as a raw material and rising procurement costs of salmon and trout.

In the Overseas Instant Noodles Segment, sales increased amid the continuing high demand compared to before the COVID-19 pandemic, as sales increased for the Ramen series, one of our signature products in bag-type noodles, while sales were also favorable for cup-type noodles such as the Yakisoba series and Bowl series, in addition to Instant Lunch series which is one of our signature products. In Mexico, sales increased due to favorable sales of both cup-type noodles, our signature products, and bag-type noodles. As a result, segment sales were ¥79,587 million (up 20.8% year on year). Segment profit was ¥7,823 million (down 33.1% year on year) mainly due to an increase in raw material costs resulting from higher prices of the main raw materials and an increase in distribution costs resulting from a higher unit price of freight, despite the effect of sales increase.

In the Domestic Instant Noodles Segment, although sales struggled for the Japanese-style series including Akai Kitsune Udon and Midori no Tanuki Ten Soba, sales increased as sales of the MARUCHAN QTTA series for cup- type noodles continued to be favorable amid the continuing high demand compared to before the COVID-19 pandemic. Sales in bag-type noodles decreased despite efforts to expand sales mainly of the Maruchan Seimen series, which celebrated its 10th anniversary in October 2021 with the launch of a commemorative product. As a result, segment sales were ¥72,980 million (down 1.2% year on year) and segment profit was ¥9,380 million (down 15.1% year on year) due to increases mainly in motive utility costs and sales promotion costs, despite factors such as decreases in personnel expenses and transportation and storage costs.

In the Frozen and Refrigerated Foods Segment, due to the impact of requests for the public to stay at home and other measures to prevent the spread of COVID-19, sales of products for restaurants, workplace cafeterias, etc. continued on a downward trend. Sales in fresh noodles decreased despite efforts to expand sales mainly of the Maruchan Yakisoba (Three-MealPackage) series, which is one of our signature products, and the Maruchan Fresh Ramen Noodle (Three-MealPackage) series, amid continuing demand for home cooking. As a result, segment sales were ¥38,854 million (down 4.0% year on year) and segment profit was ¥5,057 million (down 4.6% year on year) mainly due to a decrease in sales and an increase in motive utility costs.

In the Processed Foods Segment, amid the continuing high demand compared to before the COVID-19 pandemic, sales of packaged cooked rice increased due to carrying out the plan to increase the portions of our retort packaged cooked rice products in addition to the launch of new products. Sales continued to be favorable and increased for freeze-dried products due to the expansion of customers, mainly for the Sozai no Chikara series, a freeze-dried soup product with five packs in one bag, and the increase of opportunities for eating at home. As a result, segment

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sales were ¥14,401 million (up 2.3% year on year), and the segment reported a segment profit of ¥86 million (compared with a segment loss of ¥445 million in the corresponding period of the previous fiscal year) mainly due to an increase in sales and a decrease in personnel expenses, despite an increase in motive utility costs.

Although conditions in the Cold-Storage Segment were challenging due to stored inventory falling year on year because of the impact of the spread of COVID-19 and global logistics disruption, handling of household frozen foods increased and handling of home deliveries was steady due to stay-at-home demand as the public stays at home. As a result, segment sales were ¥16,955 million (up 4.0% year on year) and segment profit was ¥1,960 million (up 77.0% year on year) due to factors such as a decrease in personnel expenses in addition to not having temporary expenses from the operation of new cold storage facilities in the previous fiscal year, despite an increase in motive utility costs.

The Other Business Segment consists of mainly the packed lunch/deli food business. Segment sales were ¥26,392 million (up 0.1% year on year) while segment profit was ¥951 million (up 25.8% year on year).

(2) Explanation of the consolidated financial position

At the end of the third quarter of the fiscal year ending March 31, 2022, total assets increased by ¥15,723 million from the previous fiscal year-end to ¥444,374 million, and net assets increased by ¥13,496 million to ¥356,815 million. The main factors contributing to these results are as follows:

The main contributing factors for assets were increases in notes and accounts receivable - trade, and contract assets and securities, despite a decrease in cash and deposits. The main contributing factors for liabilities were increases in notes and accounts payable - trade and accrued expenses, despite a decrease in income taxes payable. The main contributing factors for net assets were increases in retained earnings and foreign currency translation adjustment.

As a result of these factors, the equity ratio was 77.6%.

(3) Explanation of forward-looking information, including consolidated results forecasts

The Company has not changed its consolidated results forecasts for the full term of the fiscal year ending March 31, 2022, as announced on October 29, 2021, because it is unclear when the COVID-19 pandemic will be brought under control and it is difficult to rationally calculate the impact on the consolidated results forecasts at this time. If any revisions are necessary in the future, the relevant information will be duly disclosed.

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