[Delayed] Supplementary Materials: Financial Results for the Fiscal Year Ended December 31, 2021

Supplementary Materials:

Financial Results for the Fiscal Year Ended

December 31, 2021

February 10, 2022

(TSE: 2216)

Index

			Page
	(Supplementary Materials 1) 【Summary of Financial Results】	-	1
 (Supplementary Materials 2)【Non-consolidated Statements of Income】	-	2
	(Supplementary Materials 3)【Financial Indicators FY2017－FY2022/Plan】 -	3
	(Supplementary Materials 4)【Market Trends】	-	4
	(Supplementary Materials 5)	-	5
	【Hard Candy+ Gummy Markets Trends by Business Category】
	(Supplementary Materials 6)【IR News Jan. 2021 to Dec. 2021】	-	6

(Supplementary Materials 1) 【Summary of Financial Results】

Quarterly

												Unit: Million yen
			FY2020					FY2021			FY2020 vs. FY2021
	Q1	Q2	Q3	Q4	Full year	Q1	Q2	Q3		Q4	Full year	YoY	YoY%
Net sales	6,112	5,040	5,001	7,166	23,321	5,439	6,200	5,999		8,024	25,663	2,342	10.0%
Operating income	439	(95)	(173)	665	836	91	344	75		747	1,259	423	50.6%
Ordinary income	439	(88)	(161)	670	860	93	363	85		753	1,296	435	50.6%
Net income	333	(94)	(96)	467	610	109	258	67		446	882	271	44.5%
											*Quarterly results are simple differences.

1H/2H （New revenue recognition standard）

Unit: Million yen

		FY2021 (Results)				（	）		FY2021 vs. FY2022
				FY2022 Plan
	1H		2H	Full year	1H		2H		Full year	1H	2H
Net sales		9,784	11,805	21,589		10,600		12,000	22,600	8.3%	1.6%
Operating income		440	814	1,254		280		860	1,140	(36.4)%	5.6%
Ordinary income		461	830	1,291		290		870	1,160	(37.1)%	4.8%
Net income		370	508	879		170		650	820	(54.1)%	27.8%

*Results and plan for 2nd half are simple differences.The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29) and related guidance is applied from the fiscal year ending Dec. 31, 2022. Accordingly, certain items that were recorded as selling expenses, including agent fees, are deducted from net sales.

Composition of net sales

FY2020	4.7%	FY2021
	3.2%

32.3%				Hard candy					Hard candy
Net sales			40.8%	Net sales
	23,321			Gummies	25,663	56.0%		Gummies *
	million yen	63.0%			million yen
			Healthy snacks					Healthy snacks

				Unit: Mil. yen
[Net sales amount by type from Jan. to Dec. (YoY%)]
	FY2020	FY2021	YoY%
	Hard candy	14,692	14,382	(2.1)%
	Gummies			39.0%
	*	7,532	10,467
	Healthy snacks	1,096	814	(25.7)%
	Total	23,321	25,663	10.0%

* The data is included marshmallow products in FY2021

*The values displayed in these materials are truncated at the million-yen level, so the totals and ratios may not always match completely.

1

(Supplementary Materials 2) 【	Non-consolidated Statements of Income】
												【Unit: Million yen】
				FY2020			FY2021			FY2020 vs. FY2021
				Amount	%		Amount	%		YoY	YoY%
Net sales		23,321		100.0%		25,663		100.0%		2,342	10.0%
		Cost of sales		12,457		53.4%		13,241		51.6%		783	6.3%
Gross profit		10,863		46.6%		12,422		48.4%		1,558	14.3%
		Freight/warehousing costs		1,353		5.8%		1,504		5.9%		151	11.2%
		Sales promotion expenses		681		2.9%		830		3.2%		149	22.0%
		Advertising expenses		360		1.5%		471		1.8%		110	30.7%
		Agent fees		3,139		13.5%		3,440		13.4%		301	9.6%
	Selling expenses		5,534		23.7%		6,247		24.3%		712	12.9%
		Personnel expenses		3,076		13.2%		3,359		13.1%		282	9.2%
		General expenses		1,415		6.1%		1,556		6.1%		140	9.9%
	General and administrative expenses		4,492		19.3%		4,915		19.2%		423	9.4%
Selling, general and administrative expenses		10,027		43.0%		11,163		43.5%		1,135	11.3%
Operating income		836		3.6%		1,259		4.9%		423	50.6%
	Non-operating income		36		0.2%		46		0.2%		10	27.9%
	Non-operating expenses		11		0.1%		9		0.0%		(2)	(17.5)%
Non-operating income and expenses		24		0.1%		36		0.1%		12	50.1%
Ordinary income		860		3.7%		1,296		5.1%		435	50.6%
		Gain on sales of investment securities	74		0.3%		94		0.4%		19	26.6%
	Extraordinary income		74		0.3%		94		0.4%		19	26.6%
		Loss on sales of non-current assets		-		-		0		0.0%		0	-
		Loss on retirement of non-current assets	0		0.0%		5		0.0%		4	726.8%
		Impairment loss		25		0.1%		132		0.5%		107	425.9%
		Loss on sales of investment securities	0		0.0%		-		-		(0)	-
	Extraordinary losses		26		0.1%		138		0.5%		111	424.2%
Extraordinary income and losses		48		0.2%		(43)		-		(91)	-
Income before income taxes		909		3.9%		1,252		4.9%		343	37.8%
Total income taxes		298		1.3%		370		1.4%		71	23.9%
Net income		610		2.6%		882		3.4%		271	44.5%

*The values displayed in these materials are truncated at the million-yen level, so the totals and ratios may not always match completely.

2

(Supplementary Materials 3) 【Financial Indicators FY2017－FY2022/Plan】

Consolidated ←	→ Non-consolidated	(FY2022 figures planned; all others actual)

			Consolidated		Non-consolidated			Plan *７
Fiscal Year		Unit	FY2017	FY2017	FY2018	FY2019		FY2020	FY2021	FY2022
Net sales	*1◎	million yen	21,303	21,301	22,949	24,039		23,321	25,663	22,600
Net sales YoY		%	8.0	8.1	7.7	4.7		(3.0)	10.0	－
Gross profit	◎	million yen	9,791	9,719	10,934	11,358		10,863	12,422	－
Gross profit to net sales		%	46.0	45.6	47.6	47.3		46.6	48.4	－
Operating income	◎	million yen	935	947	1,003	923		836	1,259	1,140
Ordinary income	◎	million yen	999	1,001	1,045	1,007		860	1,296	1,160
Ordinary income YoY		%	63.4	49.9	4.4	(3.6)		(14.6)	50.6	－
Net income attributable to parent	*2◎	million yen	447	593	1,011	651		610	882	820
company
Net income YoY		%	(10.6)	8.1	70.3	(35.6)		(6.4)	44.5	－
Comprehensive income	◎	million yen	602	－	－	－		－	－	－
Net assets	◎	million yen	10,003	9,935	10,656	10,827		11,175	11,776	－
Total assets	◎	million yen	18,275	18,064	19,997	19,169		19,779	21,155	－
Net assets per share	*3,4	yen	1,395.97	1,386.56	1,487.26	1,535.52		1,584.80	1,670.21	－
Basic earnings per share	*3,4	yen	62.19	82.57	141.19	92.36		86.58	125.12	116.29
Equity ratio		%	54.7	55.0	53.3	56.5		56.5	55.7	－
ROE		%	4.5	6.1	9.8	6.1		5.5	7.7	－
PER		times	26.1	19.6	12.2	17.4		17.4	12.7	－
Cash flow from operating activities	◎	million yen	1,512	－	949	2,013		1,442	2,620	－
Cash flow from investing activities	◎	million yen	(830)	－	(1,743)	(971)		(1,572)	(1,002)	－
Cash flow from financing activities	◎	million yen	(855)	－	271	(1,411)		(48)	(770)	－
Cash and cash equivalents at end	◎	million yen	2,132	－	1,800	1,430		1,253	2,099	－
of period
Number of employees		persons	521	485	542	578		601	608	－
Average numbers of temporary
employees, excluded from the		persons	146	120	118	121		132	137	－
number of employees
Capital investment	◎	million yen	741	－	2,850	1,721		2,090	914	－
Depreciation	◎	million yen	962	－	933	1,102		1,182	1,115	－
R&D expenses	◎	million yen	527	－	603	664		629	710	－
Total number of issued shares at		number
the end of the period	*3,4,6	7,165,892	7,165,892	7,165,236	7,051,552		7,051,412	7,051,168	7,051,168
of shares
(not including treasury shares)
Dividends per share	*3,5	yen	30	30	32.5	30		32	40	40
Payout ratio		%	48.2	36.3	23.0	32.5		37.0	32.0	34.4

◎： *The values displayed in these materials are truncated at the million-yen level.

*1: Net sales do not include consumption taxes, etc.

*2: "Net income" in the non-consolidated financial statements

*3: Kanro conducted a share consolidation of common stock at a ratio of one share for five shares effective as of July 1, 2017 and a stock split of its common stock at a two-for-one ratio with the effective date of July 1, 2019. Dividends per share, net assets per share, basic earnings per share, and total number of issued shares at the end of the period (not including treasury shares) are calculated on the assumption that the share consolidation and the stock split were conducted at the beginning of FY2017.

*4: The Company's own shares remaining in the trust that were recorded as treasury shares in shareholders' equity from FY2017 onward are included in treasury shares that are deducted from the total number of issued shares at the end of the period when calculating net assets per share. In addition, these shares are included in treasury shares that are deducted when calculating the average number of shares during the period for the calculation of basic earnings per share.

*5: Dividends per share of FY2018 includes a special dividend of 2.5 yen per share.

*6: Total number of issued shares at the end of the period (not including treasury shares) is the number of shares at the end of the previous fiscal year.

*7: The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29) and related guidance is applied from the fiscal year ending Dec. 31, 2022. Accordingly, certain items that were recorded as selling expenses, including agent fees, are deducted from net sales.

3