Toyo Suisan Kaisha : Consolidated Financial Results for the Three Months Ended June 30, 2021

July 30, 2021

Consolidated Financial Results

for the Three Months Ended June 30, 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 Three Months of FY2022 (from April 1, 2021 to June 30, 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 three months ended June 30, 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 Three Months Ended June 30, 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 Three Months Ended June 30, 2021

(1) Explanation of the consolidated operating results

During the three months ended June 30, 2021, the conditions in the Japanese economy were extremely challenging due to the impact of the novel coronavirus disease (COVID-19). Looking ahead, although a recovery is expected amid a gradual pickup in the level of socioeconomic activities as measures to prevent the spread of infections are implemented and vaccinations increase, it is necessary to closely monitor infection trends in Japan and other countries and 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 ¥83,640 million (down 2.3% year on year), operating profit was ¥8,399 million (down 19.1% year on year), ordinary profit was ¥8,996 million (down 18.7% year on year), and profit attributable to owners of parent was ¥6,440 million (down 23.3% year on year) for the period under review.

The foreign exchange rate as of the end of the period was ¥110.61 to the U.S. dollar (¥107.71 to the U.S. dollar as of the end of 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 due to lower sales volume for convenience stores and other factors. As a result, segment sales were ¥6,238 million (down 6.5% year on year) and segment profit was ¥132 million (down 37.9% year on year) mainly due to the surge in the price of tuna as a raw material, despite an increase in profit from improvement in the cost of sales ratio of fish eggs.

In the Overseas Instant Noodles Segment, although sales were favorable for the Yakisoba series and Bowl series in the U.S. amid the continuing high demand compared to before the COVID-19 pandemic, there was a pullback following the rapid increase in demand in the previous fiscal year and sales decreased for our signature products, the bag-type noodle product Ramen series and the cup-type noodle product Instant Lunch series. In Mexico, amid stable exchange rates for peso, sales increased due to favorable sales of both cup-type noodles, our signature products, and bag-type noodles. As a result, segment sales were ¥24,159 million (up 2.0% year on year). Segment profit was ¥2,912 million (down 36.7% 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 factors contributing to higher profit such as the curbing of sales promotion costs.

In the Domestic Instant Noodles Segment, despite the favorable sales of the MARUCHAN QTTA series for cup- type noodles amid the continuing high demand compared to before the COVID-19 pandemic, sales struggled for the Japanese-style series including Akai Kitsune Udon and Midori no Tanuki Ten Soba and cup-type noodles saw decreased sales overall. Sales in bag-type noodles decreased despite efforts to expand sales mainly of the Maruchan Seimen series. As a result, segment sales were ¥21,135 million (down 6.3% year on year) and segment profit was ¥2,665 million (down 23.8% year on year) due to increases mainly in sales promotion costs, despite factors such as a decrease in personnel expenses.

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, etc. continued on a downward trend. For household products, 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. As a result, segment sales were ¥13,260 million (down 7.6% year on year) and segment profit was ¥1,843 million (down 8.3% year on year) mainly due to a decrease in sales.

In the Processed Foods Segment, although sales were solid for packaged cooked rice, mainly for the cooked white rice series including Attaka Gohan amid the continuing high demand compared to before the COVID-19 pandemic, sales decreased. Sales were favorable for freeze-dried products including the Sozai no Chikara series, a freeze-dried soup product with five packs in one bag. As a result, segment sales were ¥4,421 million (up 0.6% year on year), and the segment reported a segment loss of ¥67 million (compared with a segment loss of ¥182 million in the corresponding period of the previous fiscal year), an improvement of ¥114 million, mainly due to an increase in sales and a decrease in personnel expenses.

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In the Cold-Storage Segment, although cargo movement of stored products continued to be unstable due to the impact of COVID-19, the volume of frozen foods and agricultural products received at and shipped from warehouses has increased due to the so-calledstay-at-home demand as the public stays at home, and handling and other work related to home deliveries were steady. As a result, segment sales were ¥5,490 million (up 1.9% year on year) and segment profit was ¥694 million (up 154.2% year on year) mainly due to a decrease in motive utility costs resulting from energy-saving measures.

The Other Business Segment consists of mainly the packed lunch/deli food business. Segment sales were ¥8,934 million (up 4.1% year on year) while segment profit was ¥384 million (up 84.7% year on year).

(2) Explanation of the consolidated financial position

At the end of the first quarter of the fiscal year ending March 31, 2022, total assets decreased by ¥4,347 million from the previous fiscal year-end to ¥424,304 million, and net assets increased by ¥610 million to ¥343,930 million. The main factors contributing to these results are as follows:

The main contributing factors for assets were a decrease in cash and deposits, despite an increase in securities. The main contributing factors for liabilities were decreases in accrued expenses and income taxes payable. The main contributing factor for net assets was an increase in retained earnings.

As a result of these factors, the equity ratio was 78.3%.

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

The Company has not changed its consolidated results forecasts for the first six months and the full term of the fiscal year ending March 31, 2022, as announced on May 14, 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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