Nippn : Consolidated Financial Results for the Third Quarter of FY2023

Consolidated Financial Results for the Third Quarter of FY2023 [J-GAAP]

				February 3, 2023
Listed company name:	NIPPN CORPORATION
Listing:	The Prime Market of Tokyo Stock Exchange
Code number: 2001	URL:	https://www.nippn.co.jp/	TEL:	03-3511-5307
Representative:	Toshiya Maezuru, President and Chief Operating Officer
Contact:	Koichiro Fukuyama, General Manager of Corporate Communications Group

Filing date of quarterly financial report:	February 6, 2023
Start of cash dividend payments:	-
Supplementary quarterly materials prepared:	None
Quarterly results information meeting held:	None
	*Amounts less than one million yen have been rounded down.

1. Consolidated financial results for the third quarter of FY2023 (From April 1, 2022 to December 31, 2022)

(1) Consolidated operating results (cumulative)

(Millions of yen, percentage figures show the rates of change from the same period of the previous year.)

		Net Sales		Operating Income		Ordinary Income		Profit Attributable to
						Owners of Parent
3Q of FY2023		274,681	13.6%				9,564		10.1%			11,865	4.3%			8,084	5.9%
3Q of FY2022		241,779	12.0%				8,686		12.6%			11,376	18.3%			7,634	22.8%
(Note) Comprehensive income:	3Q of FY2023:	¥13,779 million (61.5%)
		3Q of FY2022:	¥8,529 million (9.7%)
	Profit per Share (Yen)			Fully Diluted Profit
				per Share (Yen)
3Q of FY2023			104.27						91.03
3Q of FY2022			99.54						86.79
(2) Consolidated financial position
		Total Assets			Net Assets		Equity Ratio
3Q of FY2023			338,832						188,970					54.6%
FY2022			325,869						178,697					53.4%
(Reference) Equity capital:	3Q of FY2023:	¥185,064 million
		FY2022:		¥174,120 million
2. Dividends
								Dividends per Share (Yen)
		1Q-end					2Q-end	3Q-end			Year-end		Full Year
FY2022		-						18.00			-				20.00			38.00
FY2023		-						19.00			-
FY2023 (Forecast)																	19.00			38.00

(Note) Adjustment for the most recent forecast of the dividends in the current term: None

3. Forecast of the consolidated financial results for FY2023 (From April 1, 2022 to March 31, 2023)

(Millions of yen, percentage figures show the rates of change from the same period of the previous year.)

							Profit Attributable	Profit per Share
	Net Sales	Operating Income	Ordinary Income	to Owners of
	(Yen)
							Parent
Full year	355,000	10.5%	10,100	(10.5)%	12,200	(14.5)%	8,300	(11.0)%	108.13

(Note) Adjustment for the most recent forecast of the consolidated financial results in the current term: None

* Notes

1. Significant changes in subsidiaries during the current quarter (changes in specified subsidiaries in accordance with changes in the scope of consolidation): None
2. Adoption of special accounting methods for preparation of quarterly consolidated financial information: None
3. Changes in accounting policies, accounting estimates and retrospective restatements

1)	Changes in accounting policies due to revisions of accounting standards:	Yes
2)	Changes other than 1):	None
3)	Changes in accounting estimates:	None
4)	Retrospective restatements:	None

(4) Number of shares issued and outstanding (common stock)

1. Number of shares outstanding at the end of each period (including treasury shares):
2. Number of treasury shares at the end of each period:
3. Average number of shares (quarterly consolidated cumulative period):

3Qof FY2023	78,824,009	shares	FY2022	78,824,009	shares
3Qof FY2023	860,414	shares	FY2022	2,021,404	shares
3Qof FY2023	77,536,670	shares	3Qof FY2022	76,696,200	shares

• These consolidated financial results are outside the scope of quarterly review procedures by certified public accountants or an audit corporation.
• Explanation regarding the appropriate use of projected financial results and other special instructions
  Descriptions regarding the future, including the financial outlook contained in this material, are based on certain information currently available to the Company and particular assumptions, which are, at the discretion of the Company, deemed reasonable, and actual financial results may significantly vary due to various factors. Please refer to "1. Qualitative Information on Quarterly Consolidated Financial Results, (3) Information on forecast of the consolidated financial results" on page 5 for information on preconditions underlying the above outlook and other related information.

NIPPN CORPORATION (2001) Consolidated Financial Results for the Third Quarter of FY2023

Contents
1. Qualitative Information on Quarterly Consolidated Financial Results	2
(1)	Overview of business results	2
(2)	Overview of financial position	4
(3)	Information on forecast of the consolidated financial results	5
2. Quarterly Consolidated Financial Statements	6
(1)	Quarterly consolidated balance sheets	6
(2)	Quarterly consolidated statements of income and comprehensive income	8
	(Quarterly consolidated statements of income)	8
	(Quarterly consolidated statements of comprehensive income)	9
(3)	Notes on quarterly consolidated financial information	10
	(Notes on going concern assumption)	10
	(Notes to significant changes in the amount of shareholders' equity)	10
	(Changes in accounting policies)	10
	(Segment information, etc.)	11

1

NIPPN CORPORATION (2001) Consolidated Financial Results for the Third Quarter of FY2023

1. Qualitative Information on Quarterly Consolidated Financial Results

(1) Overview of business results

				(Millions of yen)
	First nine months of	First nine months of	Difference	Change
	Fiscal 2022	Fiscal 2023
Net sales	241,779	274,681	32,902	113.6%
Operating income	8,686	9,564	878	110.1%
Ordinary income	11,376	11,865	488	104.3%
Profit attributable	7,634	8,084	450	105.9%
to owners of parent

During the first nine months of the fiscal year ending March 31, 2023, the Japanese economy was heading toward normalization through efforts to vitalize economic activity while controlling the spread of COVID-19. On the other hand, manufacturing and transportation costs remain high owing to soaring raw materials prices and energy costs reflecting geopolitical risks, the rapid depreciation of the yen, and other factors. Rising prices are resulting in heightened concerns of an economic recession, and the impact on the business environment continues to be unpredictable.

In these circumstances, under our management philosophy of "contributing to the realization of a sustainable society by pursuing the well-being (happiness, health, and smiles) of people," we are working with our customers, employees, shareholders, society, and other stakeholders to create future-focused value. We are reinforcing existing businesses and vigorously investing in promising fields with the aim of achieving growth to the scale of net sales of ¥500 billion and operating income of ¥25 billion as envisaged in our long-term vision. In addition, by promoting ESG management for sustainable growth, with the aim of achieving ¥400 billion in net sales and ¥15 billion in operating income by fiscal 2027 as a milestone on the path toward realization of our long-term vision, the Group is working as one, further fleshing out the business strategy.

Consolidated net sales for the first nine months of fiscal 2023 increased by 13.6% year on year to ¥274,681 million, reflecting the implementation of sales price revisions in response to rising raw materials prices and various other costs, in addition to a continuing recovery in demand mainly in the restaurant sector, following the relaxation of restrictions on activities. In terms of profit, despite repeated increases in raw materials prices and various other costs and an increase in strategic costs for sales expansion, operating income increased by 10.1% to ¥9,564 million, ordinary income increased by 4.3% to ¥11,865 million, and profit attributable to owners of parent increased by 5.9% to ¥8,084 million, reflecting an increase in shipments due to a recovery in demand mainly in the restaurant sector and cost reductions due to improved productivity.

The performance of individual business segments was as follows.

2

NIPPN CORPORATION (2001) Consolidated Financial Results for the Third Quarter of FY2023

1) Flour Milling

				(Millions of yen)
	First nine months of	First nine months of	Difference	Change
	Fiscal 2022	Fiscal 2023
Net sales	72,247	87,972	15,725	121.8%
Operating income	4,494	5,889	1,394	131.0%

The Group is strengthening quality control in response to the growing preoccupation with the safety and security of food throughout society. At the same time, to address customer needs and diversifying food preferences, the Group promoted sales initiatives with a view to resolving the issues that concern customers. We strove to strengthen initiatives in partnership with customers, and enhance sales capabilities and brand power, and promoted sales activities, so as not to miss any opportunity during the recovery in the aftermath of the COVID-19 pandemic.

As a result, in the Flour Milling business, sales were higher than the levels for the same period of the previous year, mainly because of the wheat flour price revision and a robust trend of sales prices of wheat bran, a by-product.

In line with the increase of government sales prices (tax inclusive) of imported wheat by 17.3% on average for the five key products in April 2022, we revised the prices of wheat flour products for professional use from June 2022. However, since the Japanese government kept the sales prices from October 2022 unchanged, we kept the prices of wheat flour products for professional use unchanged.

As a result, net sales for the Flour Milling segment increased by 21.8% year on year to ¥87,972 million, and operating income increased by 31.0% to ¥5,889 million.

2) Food

				(Millions of yen)
	First nine months of	First nine months of	Difference	Change
	Fiscal 2022	Fiscal 2023
Net sales	140,924	154,949	14,025	110.0%
Operating income	3,525	2,857	(667)	81.1%

In the professional-use category, demand showed a tendency to recover owing to the relaxation of the restrictions on activities and in reaction to the fact that the government requested large commercial facilities, restaurants, etc. to shorten opening hours in the previous year, and as a result, sales of products in this category were higher than the level for the same period of the previous year.

In the home-use product category, although demand for products for consumption at home associated with people refraining from going out ran its course, sales of products in this category were higher than the level for the same period of the previous year, owing to price revisions in July and August 2022 in line with increases in raw materials prices and other costs.

In the frozen foods category, in addition to strong shipments of commercial-use frozen foods reflecting the recovery in demand from the restaurant sector, demand for home-use frozen foods, such as the One Plate Meal series of complete meals consisting of a main dish and staples in a tray and the Trendy Meal series of rice dishes, was brisk. In addition, the revision of prices of home-use frozen foods in September 2022 also contributed to higher sales. As a result, sales of products in this category were higher than the level for the same period of the previous year.

In the ready-made meals business, sales were higher than the level for the same period of the previous year because demand is on a recovery trend in line with the relaxation of the restrictions on activities.

As a result, net sales of the Food segment increased by 10.0% year on year to ¥154,949 million, while operating income decreased by 18.9% to ¥2,857 million.

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