Itoham Yonekyu : Supplementary Explanation to Financial Results Third Quarter Year Ending March 31, 2022

February 08, 2022

Itoham Yonekyu Holdings Inc.

Supplementary Explanation to Financial Results

Third Quarter Year Ending March 31, 2022

1) Summary of Financial Results

(Million Yen, %)	(Million Yen, %)
After applying revenue recognition	*Previous year
(Our estimated value)	published figures

Actual 2021	% of Sales	Actual 2020	% of Sales	Change

Sales	655,708		623,176		32,531	5.2
Gross Profit	104,795	16.0	102,508	16.4	2,287	2.2
S, G & A Expenses	81,660	12.5	80,492	12.9	1,167	1.5
Operating Income	23,135	3.5	22,016	3.5	1,119	5.1
Non-operating Income	2,991		1,909		1,081
Non-operating Expenses	- 432		- 633		201
Equity Method Gain/Loss	1,101		712		388
Net Non-operating Gain/Loss	3,660		1,989		1,671
Ordinary Income	26,796	4.1	24,005	3.9	2,790	11.6
Extra-ordinary Gain	1,126		3,065		- 1,938
Extra-ordinary Loss	- 1,095		- 731		- 363
Net Extra-ordinary Gain/Loss	31		2,333		- 2,302
Income Before Taxes	26,827	4.1	26,338	4.2	488	1.9
Net Income	18,582	2.8	18,147	2.9	434	2.4

Actual 2021 % of Sales

646,827

110,431 17.1

88,259 13.6

22,172 3.4

1,909

• 633
  712

1,989

24,161 3.7

3,065

• 731
  2,333

26,495 4.1

18,304 2.8

(Million Yen)

25,000
24,000			+2,100
											+2,500			+372	23,135
23,000
												- 100	- 31
22,016
22,000						+400
		- 200					+0
						- 73
				- 2,600
21,000				- 50
20,000									- 1,050	-150
19,000
18,000	OP Year Previous	volume Sales	A & SG / profit Gross	Utility / material Raw	impact cost Logistics	Reduction Cost	Others	volume Sales	A & SG / profit Gross	impact cost Logistics	Operation Overseas	Production Animal	Others	Other/Adjustments	Income OP Year Current
Income

Processed Foods Division	Meat Division	Others
- 422	+1,169	+372

(Note) From the beginning of the fiscal year, the "Accounting Standard for Revenue Recognition" (Corporate Accounting Standard No. 29)

has been applied to the business forecast for the current fiscal year.

In the fiscal year ending March 2021, the Company's estimated values after the application of the relevant accounting standards are used for comparison with the current fiscal year.

2) Segment Information

(1) Operating Segment Information			(Million Yen, %)
			After applying revenue recognition				*Previous year
			(Our estimated value)				published figures
		Actual 2021	Actual 2020	Change			Actual 2020
Processed Foods Division	Sales	234,787	232,879	1,908	0.8		239,361
	OP Margin	10,890	11,313	- 422	- 3.7		11,463
	% of Sales	4.6	4.9	- 0.3			4.8
Meat Division	Sales	417,705	387,222	30,482	7.9		404,391
	OP Margin	13,022	11,852	1,169	9.9		11,858
	% of Sales	3.1	3.1	0.0			2.9
Others/Adjustments	Sales	3,215	3,075	140			3,075
	OP Margin	- 777	- 1,149	372			- 1,149
Consolidated	Sales	655,708	623,176	32,531	5.2		646,827
	OP Margin	23,135	22,016	1,119	5.1		22,172
	% of Sales	3.5	3.5	0.0			3.4

Operating Income Factors

Processed Foods Division	(Million Yen)
	Change
Sales volume	- 200
Gross profit / SG & A	2,100
Raw material / Utility	- 2,600
Logistics cost impact	- 50
Cost Reduction	400
Others	- 73
Total	- 422

Meat Division	(Million Yen)
	Change
Sales volume	0
Gross profit / SG & A	- 1,050
Logistics cost impact	- 150
Overseas Operation	2,500
Animal Production	- 100
Others	- 31
Total	1,169

(2) Sales by Market

			(Million Yen)
		After applying revenue recognition
		(Our estimated value)
	Actual 2021	Actual 2020	Change
Japan	574,265	559,341	14,923
Asia	29,713	21,003	8,709
North America	22,507	17,337	5,170
Oceania	18,649	15,190	3,458
Europe	9,116	8,305	810
Others	1,455	1,996	- 541
Overseas Sales Total	81,443	63,835	17,608
All Total	655,708	623,176	32,531
Overseas Sales (%)	12.4	10.2	2.2

(Note) From the beginning of the fiscal year, the "Accounting Standard for Revenue Recognition" (Corporate Accounting Standard No. 29) has been applied to the business forecast for the current fiscal year.

In the fiscal year ending March 2021, the Company's estimated values after the application of the relevant accounting standards are used for comparison with the current fiscal year.

(Million Yen)

*Previous year published figures

Actual 2020

582,992

21,003

17,337

15,190

8,305

1,996

63,835

646,827

9.9

3) Financial Data

Sales

			After applying revenue recognition
			(Our estimated value)		(Million Yen, %)
		Actual 2021	Actual 2020		Change
Ham/Sausage		136,024	135,679		344	0.3
Processed Foods		114,129	110,798		3,331	3.0
Meat		390,095	365,270		24,825	6.8
Others		15,458	11,428		4,029	35.3
Total		655,708	623,176		32,531	5.2
SG & A Expenses
			After applying revenue recognition
			(Our estimated value)		(Million Yen, %)
		Actual 2021	Actual 2020		Change
Labor Expenses		26,504	26,743		- 239	- 0.9
Logistics Expenses		34,309	33,687		622	1.8
Advertisement		3,615	3,396		219	6.4
Packing		3,229	3,255		- 26	- 0.8
Depreciation		1,313	1,367		- 54	- 4.0
Other Expenses		12,687	12,041		646	5.4
Total		81,660	80,492		1,167	1.5
Non-Operational G/L
						(Million Yen, %)
		Actual 2021	Actual 2020		Change
Equity Method		1,101	712		388	54.6
Financing		227	71		155	219.7
subsidy		1,335	606		729	120.3
Others		997	599		397	66.4
Total		3,660	1,989		1,671	84.0
*Major G/L( Equity in earnings of affiliates)
		Actual 2021	Actual 2020	Change
IPC (USA)	1,284	798		485
Kyushu Extract(JPN)	- 75	- 9		- 66
ABC (THA)	- 298	- 209		- 89

Impact of fluctuations in foreign exchange rates related to ANZCO

219

729

8,437

1,139

10,526

Extra-ordinary Gain/Loss

				(Million Yen, %)
	Actual 2021	Actual 2020	Change
Insurance income	134	3,003	- 2,869	- 95.5
Others	- 103	- 671	566
Total	31	2,333	- 2,302	- 98.7

(Note) From the beginning of the fiscal year, the "Accounting Standard for Revenue Recognition"

(Corporate Accounting Standard No. 29) has been applied to the business forecast for the current fiscal year. In the fiscal year ending March 2021, the Company's estimated values after the application of the

relevant accounting standards are used for comparison with the current fiscal year.

1. Forecast of Business Results and Dividends
   Business Results Forecast

							(Million Yen)
	1-3Q	4Q		Year
	Actual 2021	Change	F'cast 2021		Change	F'cast 2021	Change
Sales	655,708	32,531	164,292		- 24,072	820,000	8,460
Operating Income	23,135	1,119	865		- 1,137	24,000	- 18
Non-operating G/L	3,660	1,671	- 1,660		- 2,653	2,000	- 981
Ordinary Income	26,796	2,790	- 796		- 3,791	26,000	- 1,000
Extra-ordinary G/L	31	- 2,302	- 1,031		- 812	- 1,000	- 3,115
Income Before Taxes	26,827	488	- 1,827		- 4,603	25,000	- 4,115
Net Income	18,582	434	- 2,082		- 4,138	16,500	- 3,704
Dividends Forecasts
	End of Year	EPS F'cast	Payout Ratio
	Yen	Yen	％
Actual 2020	21.00	68.61	30.6
Forecast 2021	22.00	56.35	39.0
Operating Segment Information Forecast
							(Million Yen, %)
		First Half		Second Half	Year
		Actual 2021	Change		F'cast 2021	Change	F'cast 2021		Change
Processed Foods Division	Sales	234,787	1,908		60,213	- 6,272	295,000		- 4,364
	OP Margin	10,890	- 422		- 690	- 1,774	10,200		- 2,197
	% of Sales	4.6	- 0.2		－		3.5		- 0.7
Meat Division	Sales	417,705	30,482		103,295	- 17,606	521,000		12,877
	OP Margin	13,022	1,169		2,378	788	15,400		1,957
	% of Sales	3.1	0.1		2.3	1.0	3.0		0.3
Others/Adjustments	Sales	3,215	140		785	- 192	4,000		- 52
	OP Margin	- 777	372		- 823	- 150	- 1,600		222
Consolidated	Sales	655,708	32,532		164,292	- 24,072	820,000		8,460
	OP Margin	23,135	1,119		865	- 1,137	24,000		- 18
	% of Sales	3.5	- 0.0		0.5	- 0.5	2.9		- 0.0

(Note) From the beginning of the fiscal year, the "Accounting Standard for Revenue Recognition" (Corporate Accounting Standard No. 29) has been applied to the business forecast for the current fiscal year.

In the fiscal year ending March 2021, the Company's estimated values after the application of the relevant accounting standards are used for comparison with the current fiscal year.