Toyo Suisan Kaisha : Consolidated Financial Results for the Three Months Ended June 30, 2020

Translation

Company name: Listing: Securities code: URL: Representative: Contact:

July 31, 2020

Consolidated Financial Results

for the Three Months Ended June 30, 2020

J-GAAP>

Toyo Suisan Kaisha, Ltd.

First Section of the Tokyo Stock Exchange 2875 https://www.maruchan.co.jp/

Masanari Imamura, Representative Director and President Chiyoko Matsumoto, General Manager of Accounting Department

TEL: [phone] (from overseas)
Scheduled date of filing of quarterly securities report:	August 13, 2020
Scheduled date of start of dividend payment:	-
Preparation of quarterly results presentation materials:	Yes
Holding of quarterly results briefing meeting:	None

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

1. Consolidated Operating Results for the First Three Months of FY2021 (from April 1, 2020 to June 30, 2020)

(1)	Consolidated Operating Results									(Percentages indicate year-on-year changes.)
				Net sales			Operating profit		Ordinary profit	Profit attributable to
							owners of parent
Three months ended		Millions of yen		%	Millions of yen		%	Millions of yen	%	Millions of yen	%
Jun. 30, 2020			104,304		6.7			10,379		78.2			11,060		64.4		8,400	76.4
Jun. 30, 2019			97,758		1.0			5,824		(10.2)		6,727		(6.6)		4,761	(6.8)
Note:	Comprehensive income	Three months	ended	June 30, 2020:		7,954 million yen	[906.8%]
			Three months ended June 30, 2019:		790 million yen	[(92.0)%]
			Basic earnings		Diluted earnings per
				per share				share
Three months ended						Yen					Yen
Jun. 30, 2020						82.26					-
Jun. 30, 2019						46.63					-
(2)	Consolidated Financial Position
			Total assets			Net assets				Equity ratio
				Millions of yen		Millions of yen				%
As of Jun. 30, 2020			403,301			321,787				76.9
As of Mar. 31, 2020			402,608			317,994				76.2
Reference: Equity
	As of June 30, 2020:	310,265 million yen
	As of March 31, 2020:	306,648 million yen
2.	Dividends
									Full Year Dividends
		1st quarter-end	2nd quarter-end	3rd quarter-end		Year-end		For the year
				Yen				Yen			Yen		Yen			Yen
FY2020			-			40.00			-		40.00			80.00
FY2021			-
FY2021 (Forecast)							40.00			-			40.00			80.00
Note:	Revisions to the	dividends forecasts	most recently	announced: None

3. Consolidated Results Forecasts for FY2021 (from April 1, 2020 to March 31, 2021)

(Percentages indicate year-on-year changes.)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Basic earnings
		owners of parent	per share
	Millions of		%	Millions of	%	Millions of	%	Millions of	%	Yen
	yen		yen	yen	yen
Half year	207,000		4.4	14,000	20.0	15,000	13.4	12,000	25.4	117.50
Full year	426,000		2.4	30,500	7.6	33,000	5.3	26,000	11.2	254.58

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: None
   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)

	As of June 30, 2020	110,881,044 shares
	As of March 31, 2020	110,881,044 shares
b. Number of treasury shares at end of period
	As of June 30, 2020	8,752,784 shares
	As of March 31, 2020	8,752,690 shares

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

Three months ended June 30, 2020	102,128,323 shares
Three months ended June 30, 2019	102,128,706 shares

• 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, 2020" 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.

Index of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Results for the Three Months Ended
June 30, 2020.................................................................................................................................................	2
(1)	Explanation of the consolidated operating results....................................................................................	2
(2)	Explanation of the consolidated financial position ..................................................................................	3
(3)	Explanation of forward-looking information, including consolidated results forecasts ..........................	3
2. Quarterly Consolidated Financial Statements and Significant Notes Thereto .......................................	4
(1)	Quarterly consolidated balance sheets .....................................................................................................	4
(2)	Quarterly consolidated statements of income and comprehensive income..............................................	6
	Quarterly consolidated statements of income (Cumulative) ....................................................................	6
	Quarterly consolidated statements of comprehensive income (Cumulative) ...........................................	7
(3)	Notes to quarterly consolidated financial statements ...............................................................................	8
	(Notes on going concern assumptions) ....................................................................................................	8
	(Notes in the event of substantial changes in shareholders' equity).........................................................	8
	(Segment information) .............................................................................................................................	8

1

1. Qualitative Information on Quarterly Consolidated Financial Results for the Three Months Ended June 30, 2020

(1) Explanation of the consolidated operating results

During the three months ended June 30, 2020, 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, 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 ¥104,304 million (up 6.7% year on year), operating profit was ¥10,379 million (up 78.2% year on year), ordinary profit was ¥11,060 million (up 64.4% year on year), and profit attributable to owners of parent was ¥8,400 million (up 76.4% year on year) for the period under review.

The foreign exchange rate as of the end of the period was ¥107.71 to the U.S. dollar (¥107.75 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 demand for some supermarkets increased, there was a drop off in demand for convenience stores, restaurants and hotels, and sales volumes decreased. Sales also decreased due to the effects of a decline in market prices for the core products of salmon and trout and fewer inshore fish caught. As a result, segment sales were ¥6,860 million (down 7.2% year on year) and segment profit was ¥213 million (up 929.2% year on year) due to the effect of inventory valuation review conducted in the previous fiscal year and selling products at reasonable prices, despite increases in personnel expenses and depreciation.

In the Overseas Instant Noodles Segment, sales increased in the U.S. because of strong growth in sales volumes for our signature products, the bag-type noodle product Ramen series and the cup-type noodle product Instant Lunch series, owing to higher demand for instant noodles due to the impact of the spread of COVID-19 in addition to the strengthening of initiatives for existing customers and sales to new customers. In Mexico, sales increased because of favorable sales of bag-type noodles and the effect of a price revision implemented in January 2020, despite lower sales volumes of the signature product of cup-type noodles year on year due to the impact of a weak peso and other factors. As a result, segment sales were ¥23,682 million (up 19.8% year on year). Segment profit was ¥4,599 million (up 75.2% year on year) mainly due to increased sales volume, a decrease in raw material costs, and the curbing of sales promotion costs, despite increases in distribution costs and personnel expenses.

In the Domestic Instant Noodles Segment, due to the impact of requests for the public to stay at home and other measures to prevent the spread of COVID-19, the opportunities for dining at home increased, leading to higher demand. Cup-type noodles saw decreased sales overall despite favorable sales of the Japanese-style series including Akai Kitsune Udon and Midori no Tanuki Ten Soba in addition to the Gotsu Mori series and the MARUCHAN QTTA series, for which we actively introduced new products. Sales in bag-type noodles increased thanks to favorable sales mainly of the Maruchan Seimen series. As a result, segment sales were ¥30,945 million (up 5.4% year on year) and segment profit was ¥3,495 million (up 146.6% year on year) due to decreases mainly in raw material costs, sales promotion costs, and advertising expenses, despite factors such as an increase 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, the opportunities for dining at home increased, leading to higher demand for household products despite a decrease in sales of products for restaurants, etc. For fresh noodles, sales were favorable mainly for the Maruchan Yakisoba (Three-MealPackage) series as well as for the signature products of udon noodles, ramen noodles, etc. In addition, sales were steady for the Pari-PariMugen series whose sales had increased significantly in the previous fiscal year. Although sales of chilled foods were favorable mainly for household products, sales of frozen foods fell year on year due to a decrease in the demand for products for restaurant business. As a result, segment sales were ¥20,757 million (up 12.0% year on year) and segment profit was ¥2,009 million (up 39.3% year on year) mainly due to an increase in sales and a decrease in raw material costs.

2

In the Processed 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 and increased opportunities for dining at home, sales were favorable for packaged cooked rice, mainly for the cooked white rice series including Attaka Gohan, the flavored cooked rice series including Fukkura Osekihan and the healthy series including Genmai Gohan, and 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 ¥5,977 million (up 14.1% year on year), and the segment reported a segment loss of ¥182 million (compared with a segment loss of ¥318 million in the corresponding period of the previous fiscal year) owing to the increases mainly in personnel expenses and depreciation.

In the Cold-Storage Segment, sales from trade such as customs clearance and transportation were robust as we were able to maintain a high inventory level and as a result of the beneficial effect of the start of operations at the Ishikari New Port Distribution Center, which was completed in May 2020, despite weakness in cargo movement mainly in products for restaurant business due to the impact of the spread of COVID-19. As a result, segment sales were ¥5,389 million (up 7.3% year on year) while segment profit was ¥273 million (down 19.1% year on year) due to increases in depreciation and personnel expenses associated with the operation of new cold storage facilities, etc.

The Other Business Segment consists of mainly the packed lunch/deli food business. Segment sales were ¥10,691 million (down 14.1% year on year) while segment profit was ¥208 million (down 53.6% year on year).

(2) Explanation of the consolidated financial position

At the end of the first quarter of the fiscal year ending March 31, 2021, total assets increased by ¥692 million from the previous fiscal year-end to ¥403,301 million, and net assets increased by ¥3,793 million to ¥321,787 million. The main factors contributing to these results are as follows:

The main contributing factors for assets were increases in cash and deposits, and buildings and structures, despite a decrease in notes and accounts receivable - trade. The main contributing factor for liabilities was a decrease in accrued expenses. The main contributing factor for net assets was an increase in retained earnings.

As a result of these factors, the equity ratio was 76.9%.

(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, 2021, as announced on May 15, 2020, 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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2. Quarterly Consolidated Financial Statements and Significant Notes Thereto

1. Quarterly consolidated balance sheets

			(Millions of yen)
		As of end FY2020	As of end 1Q FY2021
		(March 31, 2020)	(June 30, 2020)
Assets
Current assets
Cash and deposits	112,754	114,692
Notes and accounts receivable - trade	57,106	51,717
Securities	23,000	23,000
Merchandise and finished goods	13,598	15,325
Work in process	347	370
Raw materials and supplies	6,062	6,601
Other	3,412	3,834
Allowance for doubtful accounts	(649)	(635)
Total current assets	215,632	214,905
Non-current assets
Property, plant and equipment
Buildings and structures, net	72,706	77,104
Machinery, equipment and vehicles, net	37,521	38,122
Land	34,976	34,958
Leased assets, net	2,538	2,453
Construction in progress	7,233	3,423
Other, net	1,204	1,358
Total property, plant and equipment	156,181	157,420
Intangible assets
Other	1,443	1,374
Total intangible assets	1,443	1,374
Investments and other assets
Investment securities	27,018	27,454
Deferred tax assets	1,377	1,213
Retirement benefit asset	63	57
Other	891	874
Total investments and other assets	29,351	29,600
Total non-current assets	186,976	188,395
Total assets		402,608	403,301

4

					(Millions of yen)
			As of end FY2020	As of end 1Q FY2021
			(March 31, 2020)	(June 30, 2020)
Liabilities
Current liabilities
Notes and accounts payable - trade	25,531		27,313
Short-term borrowings	324		342
Lease obligations	310		316
Accrued expenses	23,246		19,449
Income taxes payable	4,555		2,618
Provision for bonuses for directors (and other	143		69
officers)
Other	2,544		2,791
Total current liabilities		56,656		52,901
Non-current liabilities
Lease obligations	3,734		3,681
Deferred tax liabilities	2,185		2,856
Provision for retirement benefits for directors	326		312
(and other officers)
Retirement benefit liability	20,303		20,361
Asset retirement obligations	212		213
Other	1,196		1,187
Total non-current liabilities		27,958		28,611
Total liabilities	84,614		81,513
Net assets
Shareholders' equity
Share capital	18,969		18,969
Capital surplus	22,942		22,942
Retained earnings	268,100		272,416
Treasury shares	(8,230)		(8,231)
Total shareholders' equity		301,781		306,096
Accumulated other comprehensive income
Valuation difference on available-for-sale	7,372		7,681
securities
Deferred gains or losses on hedges	11		3
Foreign currency translation adjustment	37		(1,065)
Remeasurements of defined benefit plans		(2,555)		(2,451)
Total accumulated other comprehensive income	4,866		4,169
Non-controlling interests		11,345		11,521
Total net assets		317,994		321,787
Total liabilities and net assets			402,608		403,301

5

1. Quarterly consolidated statements of income and comprehensive income Quarterly consolidated statements of income (Cumulative)

					(Millions of yen)
			1Q FY2020	1Q FY2021
			(from April 1, 2019	(from April 1, 2020
			to June 30, 2019)	to June 30, 2020)
Net sales	97,758		104,304
Cost of sales	62,513		63,011
Gross profit	35,244		41,293
Selling, general and administrative expenses	29,420		30,913
Operating profit	5,824		10,379
Non-operating income
Interest income	523		364
Dividend income	242		258
Share of profit of entities accounted for using equity		28		-
method
Miscellaneous income	252		261
Total non-operating income	1,047		884
Non-operating expenses
Interest expenses	62		60
Share of loss of entities accounted for using equity		-		108
method
Miscellaneous loss	81		34
Total non-operating expenses	143		204
Ordinary profit	6,727		11,060
Extraordinary income
Gain on sales of non-current assets	0		0
Subsidy income	92		836
Other	19		1
Total extraordinary income	113		838
Extraordinary losses
Loss on sales and retirement of non-current assets	118		69
Other	18		2
Total extraordinary losses	137		71
Profit before income taxes	6,704		11,826
Income taxes - current	1,376		2,632
Income taxes - deferred	453		649
Total income taxes	1,829		3,282
Profit	4,874		8,543
Profit attributable to non-controlling interests	112		143
Profit attributable to owners of parent		4,761		8,400

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Quarterly consolidated statements of comprehensive income (Cumulative)

						(Millions of yen)
				1Q FY2020	1Q FY2021
				(from April 1, 2019	(from April 1, 2020
				to June 30, 2019)	to June 30, 2020)
	Profit	4,874		8,543
	Other comprehensive income
	Valuation difference on available-for-sale securities	(1,171)		366
	Deferred gains or losses on hedges	(18)		(7)
	Foreign currency translation adjustment	(2,919)		(1,103)
	Remeasurements of defined benefit plans, net of tax	20		110
	Share of other comprehensive income of entities			5		44
	accounted for using equity method

Total other comprehensive income

Comprehensive income

Comprehensive income attributable to

Comprehensive income attributable to owners of parent

Comprehensive income attributable to non- controlling interests

(4,084)		(589)
790		7,954
	684		7,702
105		251

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1. Notes to quarterly consolidated financial statements (Notes on going concern assumptions)
   Not applicable
   (Notes in the event of substantial changes in shareholders' equity) Not applicable
   (Segment information)

1. Three months ended June 30, 2019 (from April 1, 2019 to June 30, 2019)

1. Information relating to net sales, profit and loss by each reportable segment

(Millions of yen)

			Reportable segment						Amount
								reported on
										Adjust-	quarterly
		Overseas	Domestic	Frozen and				Other		consoli-
		Processed	Cold-		Total	ments
	Seafood	Instant	Instant	Refrigerated		(Note 1)	dated
	Total		(Note 2)
	Segment	Noodles	Noodles	Foods	Foods	Storage			financial
	Segment	Segment
		Segment	Segment	Segment					statements
											(Note 3)
Net sales
Net sales to
outside	7,396	19,761	29,356	18,537	5,241	5,020	85,314	12,444	97,758	-	97,758
customers
Intersegment	226	-	-	-	-	284	511	21	533	(533)	-
sales or transfers
Total	7,623	19,761	29,356	18,537	5,241	5,305	85,825	12,466	98,291	(533)	97,758
Segment profit	20	2,624	1,417	1,443	(318)	337	5,525	448	5,973	(149)	5,824
(loss)

Notes: 1. The Other Business Segment is one which is not among the reportable segments and refers to a business which is mainly involved in the packed lunch/deli food business.

1. The negative ¥149 million in segment profit or loss adjustments includes companywide expenses of negative ¥290 million which have not been allocated to each reportable segment, a ¥21 million adjustment to inventories, and other adjustments of ¥119 million. Companywide expenses refer mainly to general and administrative expenses which do not belong to any reportable segment. Other adjustments are mainly for the offset elimination of knowhow fees from overseas subsidiaries.
2. Segment profit or loss is adjusted at the operating profit level on the quarterly consolidated financial statements.

2. Information relating to impairment loss on non-current assets or goodwill for each reportable segment Not applicable

8

1. Three months ended June 30, 2020 (from April 1, 2020 to June 30, 2020)
   1. Information relating to net sales, profit and loss by each reportable segment

(Millions of yen)

			Reportable segment						Amount
								reported on
										Adjust-	quarterly
		Overseas	Domestic	Frozen and				Other		consoli-
		Processed	Cold-		Total	ments
	Seafood	Instant	Instant	Refrigerated		(Note 1)	dated
	Total		(Note 2)
	Segment	Noodles	Noodles	Foods	Foods	Storage			financial
	Segment	Segment
		Segment	Segment	Segment					statements
											(Note 3)
Net sales
Net sales to
outside	6,860	23,682	30,945	20,757	5,977	5,389	93,613	10,691	104,304	-	104,304
customers
Intersegment	249	-	-	1	-	271	522	5	527	(527)	-
sales or transfers
Total	7,109	23,682	30,945	20,758	5,977	5,661	94,135	10,696	104,832	(527)	104,304
Segment profit	213	4,599	3,495	2,009	(182)	273	10,408	208	10,617	(237)	10,379
(loss)

Notes: 1. The Other Business Segment is one which is not among the reportable segments and refers to a business which is mainly involved in the packed lunch/deli food business.

1. The negative ¥237 million in segment profit or loss adjustments includes companywide expenses of negative ¥309 million which have not been allocated to each reportable segment, a negative ¥56 million adjustment to inventories, and other adjustments of ¥128 million. Companywide expenses refer mainly to general and administrative expenses which do not belong to any reportable segment. Other adjustments are mainly for the offset elimination of knowhow fees from overseas subsidiaries.
2. Segment profit or loss is adjusted at the operating profit level on the quarterly consolidated financial statements.

2. Information relating to impairment loss on non-current assets or goodwill for each reportable segment Not applicable

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